Tue | Oct 17, 2017

When will we see real gains from IMF programme?

Published:Wednesday | March 18, 2015 | 12:00 AM

THE EDITOR, Sir:

Jamaica is one of the most taxed countries in the world. When all is said and done, after Jamaica has complied with all the policies and programmes set out by the Ministry of Finance and IMF, and met most or all of the targets and passed all the IMF tests (and the economy grows, inflation remains at an acceptable rate, the national debt falls, employment increases and the exchange rate falls) will government taxes and the cost of living decrease, accordingly?

It seems to me, that, given that the country has passed seven IMF tests to date, the positive effects of this, on an incremental basis, ought be trickling down and benefiting Jamaicans. When will we begin to feel the concrete effects of all the successes, to date, that have been achieved, under the IMF programme? Until there is a trickle-down effect, that results in increasing the spending power of Jamaican consumers and visitors alike, then, passing one IMF test after another will have little or no value, in real terms. The more money Jamaicans spend, the more the economy will benefit, and vice versa. For every one per cent fall in prices, spending will increase by more than one per cent. The goal of reducing the debt to GDP ratio has been and is being achieved, but, until Jamaicans feel the effects of all the success, passing IMF tests will be seen as nothing more than an academic exercise which has little or no practical value.

Patrick A. Gallimore