(Jamaica Gleaner) Finance minister Dr Peter Phillips says the Government and the International Monetary Fund (IMF) are now in discussion to craft a draft letter of intent.
At the same time, Jan Kees Martijn, the head of the IMF mission which held talks with Jamaican officials over the last two weeks, said his team had identified policies that both the Fund and Jamaica agreed could underpin a letter of intent.
A letter of intent is a precursor to the signing of an agreement with the multilateral entity.
“We have made successful progress in identifying policies that could underpin a fund-supported programme,” the mission chief said.
Dr Phillips, who was giving an update on the administration’s talks with the IMF mission, said the Government and the Fund had made significant progress.
“We are at the point where we are sufficiently advanced that we have started to discuss a draft outline of a letter of intent and memorandum of economic and financial policies which will be the embodiment of the programme,” Phillips told journalists at a wrap-up press conference at the ministry’s Heroes Circle headquarters yesterday.
“The fund team will now need to make reference to their staff and principals in Washington, but there are some areas where technical works are still to be undertaken by both sides over the next couple of weeks,” he said.
Intense discussions
The IMF team, led by Martijn, arrived in Jamaica on September 24, and has since been engaged in intense discussions with the Government on Jamaica’s medium-term economic programme. The team also met with other stakeholders, including civil-society groups, trade unions and private-sector organisations.
Phillips reported that the fund mission has broadly accepted Jamaica’s medium-term economic programme that was signed off on by Cabinet as a viable starting point for the negotiations.
One of the main pillars of the economic programme is to increase the primary surplus, which Phillips said forms the basis of a difficult task towards reducing the stock of debt as a percentage of GDP.
This, he said, was a part of the strategy for creating the conditions for faster and more sustainable growth, an objective which stood at the centre of the overall economic reform programme.
“We have made substantial and significant progress over the two weeks with advancing the work in critical areas of structural reform including taxation policy, tax administration, pension and wages, among other things,” said Phillips.
Despite making significant progress, the finance minister said there was still a lot more work to be done.
“Overall, there has been substantial agreement on the basic framework of the programme that is to be agreed on and is considered to be a matter of high priority for the Government of Jamaica,” said Phillips.
A team from Jamaica will leave the island today to visit with their counterpart in Washington to continue discussions with the Fund in the various areas.
Still, both the IMF team and Phillips said that they are fully committed to working towards concluding an agreement as soon as possible.
“We are still working to arrive at an agreement for submission to the IMF board by end of year,” said Phillips.
Meanwhile, the mission chief Martijn, said: “We have reached understanding on an economic growth agenda on some important structural reforms, as well as other areas and we have also discussed the preliminary timetable for the specific targets and objectives of the programme.
“We are not done yet, there is more work to be done and we are fully committed to working expeditiously so we can reach an agreement on a programme,” he stressed.
