Tue | May 30, 2023

Opposition not fully with debt-exchange programme

Published:Thursday | January 28, 2010 | 12:00 AM

THE OPPOSITION People's National Party (PNP) says it cannot give unconditional support to the the Government's debt-exchange programme.

In her contribution to the debate on the Government's letter of intent to the International Monetary Fund on Tuesday, Opposition Leader Portia Simpson Miller said the programme involved "clear and present" risks.

While not being able to identify those risks, Simpson Miller said their impact would be revealed over time.

Speaking in Gordon House, the opposition leader indicated that the Government's approach to getting investors to participate in its debt-exchange programme was intimidatory.

Specific concern

"Of specific concern are the insinuations of persecution and the threats of repercussions directed at anyone who might elect not to participate in the programme," she said.

Under the Jamaica Debt Exchange (JDX) programme, the Government is expected to save some $40 billion per annum on its domestic debt-servicing costs.

Simpson Miller argued that not all investors could accept the terms of the programme, adding that the Government's threatening posture only served to undermine confidence in the financial market.

The investment that the National Insurance Fund (NIF) made in government bonds was discussed by the opposition leader. Last year, the Government said the viability of the NIF could be threatened because the fund was paying out more than it was collecting.

Interest rates

Simpson Miller also raised questions about the impact of the reduction in interest rates on the thousands of pensioners who had invested in pension funds.

"Already, local actuaries have sounded a warning that these funds will be significantly depleted as a result of the debt-exchange programme."

Simpson Miller called on the Government to provide more details on the JDX, as many investors were very unclear and anxious about the future of their investments.

She also demanded answers on the role of the Financial Services Commission in relation to the JDX.

"In the interest of equity and fairness, does everyone get the same treatment when their bonds are exchanged?" she queried.

"In the interest of accountability, whom do we ask questions? The Ministry of Finance, the Bank of Jamaica, or private institutions?"