Address by The Most Honourable Andrew Holness
Joint GOJ/IMF Press Conference
October 13, 2016 OPM Lobby
Thank you very much Ambassador Clarke. I want to associate myself with the salutations you gave earlier and get straight down to business. I’m very pleased to announce that we have reached a staff level agreement on a new economic program with the IMF that would be supported by a three year IMF stand-by agreement with potential support equivalent to US1.7 billion dollars, which upon approval will replace the existing program.
Given the Bank of Jamaica’s comfortable foreign reserves position the government has indicated Jamaica’s intention to treat the stand-by agreement as precautionary that is effectively an insurance policy against unforeseen economic shocks that are beyond the control of Jamaica. Let me emphasize that Jamaica by its policy credibility and discipline has reaped a 1.7billion dollars insurance dividend which gives confidence to any investor that Jamaica is serious about reform and will be able to withstand any exogenous shocks whether by way of natural disaster, commodity priced volatility or otherwise.
The new proposed program and the large and important commitment of IMF resources that it entails is a firm vote of confidence in Jamaica. Our request to move to a precautionary arrangement is a sign of strength and reflects the policy credibility and strong macroeconomic management of the Jamaican government.
Under the previous programs Jamaica made strides in fiscal and monetary management. In building on what we have achieved this new program emphasizes the need for a reorientation and transformation of the Jamaican public sector to an efficient, effective, performance focused facilitator of growth, social well-being and rule of law. As such the government’s goal under this new program which the IMF mission team will recommend that the IMF’s management and executive board will support and pass it sometime in November. The government’s new program, our direction, our goals would be to:
- Reorient public resource allocation towards infrastructure, social protection and security related spending while transforming the public sector to be more efficient and delivery focused.
- To modernize the monetary policy framework and build the foundation for an eventual move to inflation targeting.
- To bolster the resilience of our financial system and to implement initiatives that unlocks Jamaica’s growth potential and promotes private sector job creation.
The Jamaican governments request for this new program to be approved is tentatively scheduled for consideration by the IMF’s executive board in November as I said before, at which point the arrangement under the new extended fund facility would be replaced by this precautionary standby arrangement.
As you know the existing program was scheduled to come to an end in March 2017. As Ambassador Clarke has pointed out, we’ve seen questions in the public domain indicating uncertainty as to what the future will look like. Uncertainty about the future can dampen the investment climate and limit bold investment decisions. The government has taken a strategic decision to bring policy certainty to the economy. Further, it is important to bring forward the outstanding structural reforms required to secure economic growth rather than to keep avoiding them and pushing them further and further into the future. This shows the willingness of the government to own the program and grapple with the fundamental challenges that have held us back; that we have been able to accomplish this in seamless order and timely fashion working in partnership with the IMF shows our resolve is strong and demonstrates the confidence of the IMF in Jamaica and its government.
I would like to thank the IMF staff represented here today by Alejandro Werner, Uma Ramakrishnan and Constant Lonkeng for their belief in Jamaica and our potential and for their hard work in getting us to this point. Equally I would like to thank Minister “Man-a-yard” Shaw. To get to this point was a long tedious journey and Minister Shaw was there at every step of the way.
I would also like to thank Ambassador Clarke who played a critical role in ensuring the technical design; in ensuring that the program was well structured and anchored. I want to thank also the team from the Office of the Prime Minister. I want to thank Minister Fayval Williams and the other advisors, I see Senator Hill somewhere here, the Financial Secretary and the entire team at the Ministry of Finance. You can say that all the long hours paid off because it was indeed as Uma described it, we did a sprint for a marathon but we’re here to make this wonderful announcement.
The government of Jamaica looks forward to a continued productive collaborative relationship with the fund and we understand that it will not be an easy program; it is not a lesser program. The challenges are still there and the challenges are still great but with the resolve of the Jamaican people, with the resolve of the government and with the evolving relationship to a higher level with the IMF. I know that we will be able to complete this new program successfully.
In closing I would also want to thank- I left him specially- the governor of the Bank of Jamaica, our new rockstar. I see where he has been voted the best governor in the region, in the Caribbean and that is a significant acknowledgement of your work and we’re very proud of your accomplishment and Jamaica is proud.
With those very few words I want to say how very happy I am that we’ve been able to reach this stage. This is merely the beginning of the journey but an important milestone to mark.
Thank you ladies and gentlemen.