Wed | May 24, 2017

JLP spokesman says a Labour Government would work well with multilaterals despite disagreements

Published:Sunday | September 6, 2015 | 9:00 AMArthur Hall
Audley Shaw

Opposition spokesman on Finance Audley Shaw is seeking to allay fears that recent public disagreements with the International Monetary Fund (IMF) could mar relationships with multilateral agencies if the Jamaica Labour Party (JLP) is elected to form the next government.

Recently, the JLP voiced strong disagreement with the Government's buy-back of US$3.2 billion in PetroCaribe debt, despite the strong endorsement of the move by the IMF and other multilaterals.

This has sparked claims that a future JLP government would have trouble relating to the multilateral agencies, particularly in light of the premature abandonment of the last borrowing agreement which that administration had inked with the IMF.

But last week, Shaw argued that any disagreement with the IMF, or other multilaterals, would not indicate a breakdown in the relationship or an inability to work together.

"There would be no difficulty to work with them at all, as this would not be the first time we would have disagreements with the IMF," Shaw told The Sunday Gleaner.

"But what I find is that the present finance minister follows the IMF far too slavishly and does not show any real initiative in putting in place growth-inducing policies," added Shaw.

The former finance minister charged that Dr Peter Phillips, the man who replaced him in that portfolio following the 2011 general election, does not understand that while passing IMF tests is important, this is not sufficient to guarantee the ultimate success of the country's economic programme.

PROACTIVE PROGRAMME

"This is why the finance ministry must adopt a proactive programme of fiscal inducements to drive aggressive growth, job and wealth creation," said Shaw, as he argued that over the past four years the economy has barely grown by just over zero per cent.

"In our dispensation, the minister of finance can't just be a slave to the IMF, he must use creative means to inspire confidence among the investment community. He must be able to walk and chew gum at the same time."

Shaw charged that the governing People's National Party is trying to give a wrong impression that it is responsible for the current good relations with the multilateral agencies.

He said when he became finance minister after the 2007 general election he initiated the renewed relationship with the Inter-American Development Bank (IDB), the IMF and other agencies.

"We were told by Omar (former finance minister Dr Omar Davies) that Jamaica does not qualify for low-cost funds ... but by the time I left office, we had borrowed over US$3 billion from the World Bank, the IMF and the IDB.

"Incidentally, most of that money came at between two and three per cent, some at one per cent, and in one celebrated loan with the World Bank, that came at 0.63 per cent.

"I brought the Jamaican Government back into a close relationship with the multilateral institutions at every level, but it does not mean that you will not have disagreements from time to time," said Shaw.

MAIN ISSUE WITH IMF

According to the former finance minister, his main issue with the IMF during his time at the wicket was the pace at which it wanted him to implement tax reforms, public-sector reform and pension reform.

Shaw said the speed at which the multilaterals wanted these reforms done was too fast and would negatively impact the economy.

"And that is why we had a suspension of the reviews. Ironically, we have this situation now where we have this appearance of a sweetheart relationship with the present minister, and look at the pace at which the reforms are now not happening.

"I was hauled over the coals over it and reviews suspended because they wanted pension reform by 2011. Now we are told it will not come by 2017," said Shaw, as he urged Phillips to balance his obligation to the IMF with his ultimate obligation to create an environment of confidence will lead to significant economic growth.

arthur.hall@gleanerjm.com