US economist: Obama visit may reduce impact of IMF fallout
A US economist says President Barack Obama’s visit to Jamaica appears to be aimed at reducing fallout from a difficult International Monetary Fund (IMF) programme.
Economist, Jake Johnston, notes that Obama’s arrival is one in a series of high-profile visits by international officials in recent months.
Yesterday, an official in the Obama administration said the visit provides the opportunity for the President to talk with his Jamaican counterpart about what he calls the strong US support for Jamaica's efforts to deal with its debt crisis.
However, Johnston believes it shows the difficulty of Jamaica’s economic reform programme under the IMF.
He notes that Jamaica has been receiving a series of high-profile visits from international leaders because of the recognition that the fallout from the IMF programme could be significant.
Last year, the IMF managing director Christine Lagarde and the president of the Inter-American Development Bank, Luis Alberto Moreno visited Jamaica.
Meanwhile, Johnston says it is important for the IMF and other multilateral organisations that Jamaica's economic reforms succeed as this would improve their record of intervention in poor and indebted countries like Jamaica.
Yesterday, the Washington-based Center for Economic and Policy Research released a paper done by Johnston which asserted that Jamaica is running the most austere budget in the world due to conditions under the IMF agreement.
The paper noted that since the May 2013 signing of the current IMF deal, Jamaica has paid back $138 million more than it received last year.
And it says Jamaica still owes the World Bank and the Inter-American Development Bank over $650 million through to 2018.
Johnston says multilateral debt relief including, debt cancellation would work better to help Jamaica emerge from its debt trap.