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IMF to bring 'good news' today

Published:Wednesday | January 27, 2010 | 12:00 AM

Jamaica should hear the good news, today, that the International Monetary Fund (IMF) has approved its request for a US$1.25-billion standby arrangement.

This should open the doors for the country to get a further US$1.1 billion in loans from multilateral agencies.

The IMF executive board is slated to meet this morning to decide on Jamaica's request, but with the success of yesterday's $700-billion debt swap and the Government's agreement to meet the many demands of the fund, it is expected that the standby loan will be approved.

Agreement in principle

The IMF had previously announced that it had an agreement in principle with Jamaica on the loan.

Two weeks ago, Dominique Strauss-Kahn, managing director of the IMF, announced that, subject to final approval by the executive board, the loan would be approved under a 27-month standby arrangement.

"Jamaica has been hit hard by the global financial crisis, and has been suffering from years of sub-par growth. Strong policies and an ambitious reform agenda are necessary now to start a process of transformation in the Jamaican economy," he had said.

"By streamlining public expenditure and reducing interest payments, Jamaica will have more resources available for investments in education and infrastructure. This will increase growth potential, reduce the vulnerability to external shocks, and put the country in a position to reap the benefits of a recovery in global growth," Strauss-Kahn had added.

The IMF managing director had said at the time that protecting the most vulnerable Jamaicans was a key concern of this programme.

"To help soften the impact on the poor, the programme allows for at least a 25 per cent expansion of the social safety-net spending, in particular the Programme of Advancement Through Health and Education, and the school feeding programme."