Looking Beyond the IMF Extended Fund Facility

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The government is in discussions with the International Monetary Fund, IMF, for a new agreement after the current one ends in December.

Finance Minister, Audley Shaw, says they’re in talks for the IMF to begin a monitoring agreement, which will be different from the current Extended Fund Facility, EFF.

“Developing beyond the IMF” was the theme of the Private Sector Organization of Jamaica, PSOJ’s Annual Economic Forum, today.

But that theme may be a misnomer, because the government is not yet ready to move beyond the IMF.

According to Finance Minister Audley Shaw, who was one of the main speakers, the relationship will continue beyond the current arrangement.

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Jamaica completed its eleventh and twelfth IMF reviews earlier this year, which has allowed for the draw down of some 80 million US dollars from the fund.

The country still has three reviews to go under the EFF, with the last scheduled for next April.

Minister Shaw says the Government is not afraid to reengage the IMF in a monitoring capacity beyond this point.

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He says beyond the IMF, his administration will be committed to fostering growth led by the private sector.

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Meanwhile, members of the business community are saying that a staff monitoring arrangement with the IMF is not enough.

Executive Director of the Mona School of Business, Densil Williams, and Senior Economist at JMMB, Jermaine Burrell, say such a program would not have enough teeth to keep Jamaica on the path of fiscal responsibility.

According to the IMF, a staff-monitored program is an informal and flexible instrument for dialogue between them and a country on its economic policies.

Under the program, the IMF monitors a country’s targets and policies, but does not support them with the Fund’s financial resources, nor is it subject to the endorsement of the IMF’s Executive Board.

Executive Director of the Mona School of Business, Densil Williams, says Jamaica needs entrenched fiscal responsibility independent of the government of the day.

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He says until we have such an arrangement, the IMF must remain in place.

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He is backed by Senior Economist at Jamaica Money Market Brokers, JMMB, Jermaine Burrell.

Burrell says an intensified surveillance of Jamaica’s fiscal discipline is required with the IMF.

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He also argues for the maintenance of the Economic Programme Oversight Committee, EPOC, beyond the current IMF arrangement, as well continued monitoring by civil society.

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