IMF no one-shot answer - PM - Says horrendous debt burden crippling Jamaica
Published: Monday | November 9, 2009
Though offering only very limited details on discussions with the International Monetary Fund (IMF), Prime Minister Bruce Golding yesterday attempted to alleviate the nation's concerns about the sluggish pace of the negotiations.
Addressing members of Generation 2000 at its annual general meeting at the Jamaica Labour Party's Belmont Road, New Kingston, headquarters, Golding said it was critical for Jamaicans to bear in mind that the negotiations with the multilateral body could not be hastened.
"It's not a simple thing. It's not a matter of signing on the dotted line and going about your business," the prime minister explained. "We have to be very, very careful and very meticulous in terms of what kind of approach we are embarking on, what sort of understandings we are arriving at with the fund."
He said though the recently concluded 11-day visit by the IMF team was fruitful, there were still a number of issues to be worked out.
"We have managed to get over some of the ticklish problems that we had been wrestling with, but it's not over yet," he added.
He said a team would be leaving the island today for Washington to continue discussions with the body.
Own solutions needed
The prime minister hastened to point out that Jamaicans should not view the IMF agreement as a one-shot answer to Jamaica's economic problems but that the Government needed to find its own solutions to stimulate economic growth and development.
"The IMF may provide the support that we need now to stay afloat but, if we don't make use of (this), we could be in very serious trouble," he said.
"It does provide us with a respite, it does provide us with an opportunity to sustain the economy at a certain level, but it is we and it is other things that we are going to have to do that are going to give us the strength and the muscle to begin to start growing again."
Golding further pointed to the country's enormous debt burden, exacerbated by the global recession, as a major obstacle in the current discussions. He said the size of Jamaica's debt and the debt-servicing cost are two of the main issues on which the IMF discussions are centred.
"I would go as far as to say the size of the debt is the lesser of the two problems that relate to the debt. The bigger problem is the cost of the debt, because we are paying some horrendous interest rates on our money. We are paying higher interest rates on our money than any country in the world," he said.
Golding added: "The interest alone on our debt amounts to 16 per cent of our gross domestic product. There is no country in the world that is in that sort of ballpark."