Phillips remains upbeat on IMF talks

McPherse Thompson, Assistant Editor - Business

Port-of-Spain, Trinidad:

An upbeat Finance Minister Dr Peter Phillips has sought to put to rest suggestions that a new agreement with the International Monetary Fund (IMF) is in limbo, saying that Jamaica is expected to conclude negotiations by October 5 and seal the deal by the end of December.

The agreement is subject to approval by the IMF board.

Phillips said there was no delay in the negotiations.

"A team is coming on the 24th of September to have discussions with us" as part of the negotiations "and we are hopeful that we will get something to the board before the end of this calendar year," he said.

The Finance Minister, speaking with the Financial Gleaner at the end of a forum organised by the IMF, said: "We have had very good discussions with the deputy managing director (Min Zhu) here, and we expect that on a totally separate matter, in terms of mobilising some resources around a gross agenda, we will have a further set of discussions in between those two events.

"We expect to conclude the negotiations with the mission that will be (in Jamaica) between September 24 and October 5," he said.

Phillips said Jamaica has made a significant fiscal adjustment in the budget for fiscal year 2012-2013, has moved on the tax reform agenda having completed the parliamentary discussions, and have concluded negotiations with public-sector trade unions for fiscal years 2010-2012.

"All these things are moving, including pension reform. But we are not going to negotiate with the Fund in public," he said.

Asked if the IMF was satisfied with the Government's action on those matters, the finance minister said IMF officials have not raised any concerns about those areas. "It's not an issue between us," he said.

The Fund wants to see a clear fiscal programme that reduces Jamaica's debt-to-GDP ratio and put the debt and fiscal operation on a sustainable path "so that we can resume growth," the finance minister said.

Insofar as reducing the size of the public sector is concerned, the finance minister said the number of public-sector posts to be made redundant before the end of the calendar year would exceed the 3,000 originally announced for culling in September.

"It's not jobs" that will be cut in the public sector, said Phillips. "There are vacancies now that we say we will not fill, that gives the programme fiscal sustainability down the line. It covers all elements of the public sector. Nobody now in a job will be let go."

Asked if he envisions cutting individuals going forward, the finance minister said: "At this point, no. But there are some people who seem to believe that unless you have blood running, so to speak, figuratively, that you are not doing enough. That's not the view of this administration. What is important is that we reduce the operational costs of Government, which we are doing. It is a difficult situation, but we are trying to do this in a sensible, astute, wise way which minimises social disruption."

At the end of the meeting, the IMF and CDB issued a communiqué which suggested that ambitious reforms were needed for robust growth to return in the Caribbean.

They also concluded that countries with high debt ratios would benefit from pursuing fiscal adjustment steadfastly, but protecting the poor and vulnerable groups should be central to reforms.

mcpherse.thompson@gleanerjm.com