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IMF says wage constraints important to fiscal agenda

Published:Saturday | November 15, 2014 | 12:00 AM

International Monetary Fund (IMF) Mission Chief to Jamaica Jan Kees Marjtin has said the Government's strategy for

constraining the public sector wage bill is a very important part of the country's fiscal

policy agenda.

Responding to a query about the IMF's position on a wage increase to public-sector

workers, next year, following a period of wage freeze, Marjtin argued that the Government's strategy of constraining

public-sector remuneration would create more room for social spending and financing of infrastructure projects, which is critical for economic growth.

Sixth IMF review

"We see this as a very important part of the fiscal policy agenda and we welcome the Government's commitment

in this area," Marjtin told journalists yesterday at a press conference on the IMF's sixth review of Jamaica's extended fund facility at the Ministry of Finance in Kingston.

Meanwhile, Finance Minister Dr Peter Phillips said the Government incorporated increases for wages in its

projections for 2015.

He said the ministry was embarking on discussions with the unions representing public-sector workers but noted that the administration remained committed to its targets under the IMF programme.

"We have to find a meeting point that will allow their need for increased remuneration to be addressed by the various member groups (unions) and our need to maintain the path of fiscal consolidation and wage expenditures to be met also," he added.

No sleight of hand

Commenting on the impact of the public sector wage freeze on government workers, Phillips reminded the country that the unions representing public sector workers signed the agreement for wage constraints recognising that there would be a reduction in real wages. "There was no sleight of hand," Phillips asserted.

According to Phillips, the leadership of the unions had insisted that the Government should complete its economic reform programme, adding that out of that insistence

the Economic Programme Oversight Committee was formed.

"What we are about is a long-haul transformation, but at the same time we recognise that we can't call upon the workers to sign a blank cheque in relation to wage increases," Phillips added.

Public-sector workers have been under a wage freeze since 2009.