Tue | Jul 17, 2018

Jamaica can pass IMF tests and achieve prosperity - Shaw

Published:Wednesday | March 30, 2016 | 12:00 AMMcPherse Thompson
Minister of Finance and Public Service Audley Shaw

Finance and Public Service Minister Audley Shaw said the outcome of the recent general election, which was won by the Jamaica Labour Party (JLP), was not a signal by voters that the economic support programme with the International Monetary Fund (IMF) should be ignored.

It is instead an endorsement of the Government's belief that the country can live within its means, pass IMF tests and achieve prosperity, he said.

Shaw also made it clear that the Government will not be abandoning the four-year programme, which comes to an end in March 2017.

Addressing a breakfast forum of the Private Sector Organisation of Jamaica at The Jamaica Pegasus hotel in New Kingston yesterday, the finance minister said that listening to the media in the build-up to the election, one could be forgiven for believing that Jamaicans faced the following decision: If they supported the IMF programme, they should vote for the People's National Party. If not, they should vote for the JLP.

"By this flawed logic, the message sent to the electorate is simple: 'Abandon the reform programme in exchange for populist economic policy'."

However, Shaw said that was a false choice.




He said the Government's economic policy is based on the fundamental premise that it is possible to continue the reform programme and accelerate economic growth at the same time.

"We believe that growth is not merely the outcome of austerity, but must come as a result of a comprehensive and coordinated set of policies that include, but are not restricted to fiscal discipline alone," the finance minister said.

"We believe that even in the midst of a programme of legitimate reform, we have the ability to make decisions that provide relief to Jamaican workers and businesses and make important investments in our future," he said.

"That was our message in the campaign," said Shaw, referring to canvassing for the general elections held on February 25 of this year.

"That was the message I repeated time and time again when I travelled the length and breadth of this country," the finance minister said.

"The outcome of the election is, therefore, not a signal sent by voters that we would reject the IMF," said Shaw.

"Instead, it is a ratification by the Jamaican people of our shared belief that we can live within our means and pass IMF tests and achieve prosperity," he added.

The finance minister said the Government was committed to continuing the economic reform programme with the IMF and other multilateral partners.

Shaw, contending that the reform programme started under his stewardship, said: "I personally championed the resumption of a borrowing relationship with the IMF the last time I was minister of finance."

The four-year IMF programme currently under way was signed in May 2013 by the PNP administration.

Shaw added that he was responsible for rebuilding the relationship with the IMF and others, including the World Bank and Inter-American Development Bank, "and I continue to believe wholeheartedly in its importance".

He said he implemented the first debt exchange, which at the time was an unprecedented step.

The downward trajectory of the fiscal deficit, interest rates and inflation all began under the JLP administration, he said.

Shaw said he made those points not to make a political point, but to reassure the audience, comprising mostly members of the private sector, that his credentials when it comes to fiscal responsibility are deep and unquestioned.