Business
Jamaica moving to sign agreement with IMF
Jamaican Prime Minister Portia Simpson-Miller
Jamaica’s political and business community Tuesday gave a cautious response to the call by Prime Minister Portia Simpson-Miller for nationals to accept the stringent measures that will accompany a multi-million dollar Stand By Agreement (SBA) with the International Monetary Fund (IMF).
Prime Minister Simpson-Miller said that among the measures include increased taxes and the launch of a national debt exchange offer on Tuesday as her administration seeks to deal with a national debt that now stands at 140 percent of Gross Domestic Product (GDP).
Former finance minister Audley Shaw said the measures outlined by the government lacked specifics on the progress in negotiations for a new deal with the IMF.
However, he conceded that the debt exchange option had the potential to help revive the economy and result in a further reduction in interest rates in the financial sector.
Shaw was finance minister three years ago when the then ruling Jamaica Labor Party (JLP) introduced the first Jamaica debt exchange (JDX) aimed at achieving some of the same objectives outlined by Phillips.
(More: A Stellar Record of Failure: The IMF and Jamaica)
Financial analyst, David Wan said that while the choice of a debt exchange meant that it was the banks, bondholders and pensioners who would do “the heavy lifting” it was a less unpalatable option “than a straight tax package”.
He said overt tax package would have been much more painful than this interest rate reduction on the bonds”.
