Tue | Aug 30, 2016

No new debt exchange, says finance minister

Published:Thursday | February 9, 2012 | 12:00 AM
Dr Peter Phillips (centre), minister of finance, planning and public service, in discussion with Brian Wynter (right), governor of the Bank of Jamaica, and Financial Secretary Dr Wesley Hughes after a Jamaica House press briefing in St Andrew yesterday. - Norman Grindley/Chief Photographer

Finance Minister Dr Peter Phillips yesterday underscored the Government's determination not to enter another debt exchange, despite the debilitating impact the debt burden is having on the country.

Phillips also reaffirmed his party's pre-election promise that there would be no wholesale job cuts in the public sector.

"The country and the various elements of the community - pensioners, investors, ordinary citizens - ... have already undertaken great sacrifice in the initial debt swap," Phillips told journalists yesterday. "We don't think, at this point, that there is any basis for going and asking further sacrifice from the same people."

He was responding to questions about whether the Government would consider a debt swap similar to the Jamaica Debt Exchange (JDX), which was entered into by the Bruce Golding administration in 2010.

That JDX extended the maturity of some domestic instruments and returned lower interest rates.

"I think what we really need to do is to examine ... ways in which we can eliminate waste (and) ways in which we can structure reductions in the Budget which would ... help induce greater levels of growth," said Phillips as he ruled out a JDX2.

Economic growth necessary

He noted that one way to reduce the debt-to-GDP ratio would be to grow the economy, and added that this was one strategy of the Government.

In the meantime, Phillips said any widespread layoff of public-sector workers would not be feasible.

The finance minister pointed to the fact that close to 80 per cent of the public-sector employees are in the critical areas of education, health and national security, with no scope for mass dismissals.

"These sectors are essential to the maintenance and, indeed, the improvement of the quality of life of the Jamaican people, and any sharp reduction in employment would involve cutting in those sectors which already have service-delivery deficits," said Phillips.

The finance minister said the Government was discussing options with the public-sector workers and their unions to address the problem of the high wage bill.