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Zacca: Jamaica risks failure without the IMF

Published:Friday | January 11, 2013 | 12:00 AM

Jamaica has no alternative to a bailout agreement with the International Monetary Fund (IMF), according to the head of Jamaica's top business lobby, who says the country is too close to crisis point to search for a different saviour.

It either secures a deal or fails on its own, president of the Private Sector Organisation of Jamaica, Christopher Zacca, said Wednesday while laying out a laundry list of must-dos for this week's Cabinet retreat, with the agreement as priority one.

"There is no Plan B other than the IMF," said Zacca in a speech at the luncheon meeting of the Lions Club of Kingston.

"They have no choice but to get that agreement signed. Any person that suggests that a Plan B without the IMF at this point is a viable alternative is not thinking straight. Such train of thought risks plunging us into the abyss and significantly hurting all of us."

bailout necessary

Jamaica, he said, needs to have a bailout agreement in place before the next budget presentation.

"If we don't get (the agreement), there is going to be further deterioration, the currency will devalue even more and faster, we can expect an automatic downgrade, it will be even more difficult to attract foreign investment and interest rates would go up and all of that spirals and we have less production and more taxes," he said.

Jamaica is already one of the three most indebted countries in the world and is part of a trading block, CARICOM, which has five of the top six most indebted countries worldwide, he said.

His list of fallouts also covered dramatic fall in business and consumer confidence, significant deterioration of local and international sentiments, rapid and significant depreciation of the Jamaican dollar accompanied by higher inflation, continued delay in the disbursement of funds "or even worse", a significant loss of financing.

"Without an IMF agreement, we would have a strong risk of economic failure. There is no Plan B because we can't start talking about something new now; we just don't have time," he said.

Sticking points

Zacca said while the minister of finance has been talking about the details and issues surrounding the potential agreement, he is looking forward to hearing contributions from the prime minister, the rest of the Government and members of the Cabinet.

The private-sector spokesman said the business community is feeling helpless because the details of the "sticking points" in the negotiations and how far away the parties are on these points are not very clear to the public.

"If we are to continue to support the Government negotiating team, then it is full time that they share these details with us so that we ourselves can provide our input and, as a result, increase the buy in from ourselves and the rest of civil society," said the PSOJ president.

"The Jamaican private sector stands united and is ready to be part of the solution, starting with getting an IMF agreement - the crucial first step."

His laundry list for Cabinet discussion included modernising tax policies, incentives and collections; creating a business friendly environment for growth; and facilitating the protection of the society's most vulnerable.

"Only the agreement can help us to pull back from the fiscal cliff. But if we don't get an agreement, we won't die as a country ... . Will we build back ourselves one day? Yes, of course. But why throw it all away to build back?" he said.