Wed | Jan 23, 2019

Is Jamaica the new IMF ‘poster child?'

Published:Wednesday | April 29, 2015 | 12:00 AM


I would be hard-pressed to find a country that has had the kind of attention from the leadership of international finance capital in the world for the last 10 months, as our country has received.

This fact is underscored by visits of the chief of the International Monetary Fund (IMF), Christine Lagarde, in June 2014; the Inter-American Development Bank's head, Luis Alberto Moreno, in December 2014; and that of United States President Barack Obama earlier this month, all singing from the same 'sankey' - staying the course.

It is a course which has resulted in a deeper pauperisation of ordinary Jamaicans, who have taken the bitter medicine applied by the Portia Simpson-Miller led People's National Party administration.

This dosage has resulted in high levels of unemployment, especially among the youth; wage freeze in the public sector; National Debt Exchange and lay-offs in the private sector; drastic compression of capital spending; a sliding dollar that has terrorised the pockets of our people, who are fixated on consumption of foreign goods; deep cuts in social services; and a woefully inadequate social-safety net designed to cauterise the inevitable fallout among the most vulnerable in society.

This Greek-style application of an austerity programme has seen us committing to a primary surplus of 7.5 per cent, which is almost twice of that beleaguered country. The magnitude of our sacrifices is clearly amplified by the fact that it's mainly oil-rich states that are able to maintain that kind of surplus.

Paradoxically, though, these sacrifices by the people provide Jamaica with a unique opportunity, as so desperate is the IMF for a success story in its long and sordid history among the peoples of the developing world, that we should use our newfound status to wrest concessions from it - concessions that would enable us to free up more capital to stimulate growth in the economy, while unleashing the creative energies of the Jamaican people, that could result in job creation and enhance development




One idea that comes to my mind is the implementation of a significant debt-swap arrangement that could be tied to our work in enhancing climate change resilience, better environmental stewardship, our work in renewable-energy resources and, in general, a greater 'greening' of the Jamaican economy.

This freeing up of more resources to grow our economy is of absolute necessity when taken against a background of our country's debt being approximately 140 per cent of what we earn (debt-to-GDP ratio), one of the most onerous in the world.

This is further underlined by the fact that even with an IMF agreement firmly in place, and consistent passing of quarterly tests, which is good for our international reputation, last year alone we paid out US$138 million more to them in debt repayment than we received.

Prime Minister Portia Simpson Miller and her administration have expended significant political capital in order that the IMF can look good, to the point where they have conceded political ground, albeit to a fractured Opposition. The Government has kept the peace as there is no burning and looting, which is par for the course whenever the IMF is in town.

Let's use our newfound status as a new poster child of the IMF - that is being sold to the rest of the world - to our advantage and as a leverage to improve the lot of our people. There is no better time than the present.

Trevor Brown