Nov 2012 Financial News

Phillips puts doubt on December IMF deal

Nov 21, 2012

FINANCE and Planning Minister Dr Peter Phillips admitted yesterday that an agreement with the International Monetary Fund (IMF) might not be possible before January.

Dr Phillips made the admission under tremendous pressure from Opposition Spokesman on Finance Audley Shaw, in the House of Representatives, following the minister’s statement on his tabling of the tax reform White Paper and a couple of fiscal framework ministry papers.

Asked by Shaw whether he still thinks that a deal will be completed by year-end, Dr Phillips admitted that there was “a set of technical issues” surrounding the question of “buffers” against the current global economic outlook.

He said that the issue involves an extensive set of discussions — which are continuing with a visit to Washington, DC, currently by a Jamaican delegation — and there was no formal decision on those “buffers”.

“Until the Letter of Intent is finalised and any prior actions additional to what are now being discussed, I cannot say to you nor to the country, definitively, that a board meeting (in) December or January is the particular date. But we are working to ink the agreement this side of the calendar year,” Dr Phillips said.

However, Shaw was not convinced by the minister’s response and reacted, “It appears to me, quite frankly, and I speak from my own experience, that you might be better off simply admitting that a December agreement is not on the cards”.

“I am not trying to draw your tongue or anything, but I speak from my vantage point and my experience. I think that it might be better minister if you remove the debate and the uncertainty about a December decision because it appears to me manifestly clear that, in relation to the number of hanging issues that remain, the date will clearly have to be pushed back,” Shaw added.

Phillips responded that as much as he was committed to transparency and to speak full to the House, he could not “speak about something that is not settled”.

He said that the IMF had not raised the prior actions issues yet, and he had referred to them on the basis of his assessment of the discussions.

“The fact of the matter is that I have every expectation, as I said, that we will conclude the agreement to the point of a Letter of Intent being issued this calendar year. That remains my expectation and it also remains my hope... Both are possible, but I am more certain about the Letter of Intent being settled this side of the year. When that is settled, you can be assured that we will report to this House fully and with the utmost transparency,” Dr Phillips said.

Shaw noted that there was distinction between the agreement on a Letter of Intent and a decision by the IMF board.

Phillips insisted that when the IMF management takes a decision to go to the board with a Letter of Intent, “it is based upon their belief, usually, that the programme that they have is likely to be supported by the board”.


Source:
BY BALFORD HENRY Observer senior reporter balfordh@jamaicaobserver.com
Jamaica Observer
Wednesday November 21, 2012

http://www.jamaicaobserver.com/news/Phillips-puts-doubt-on-December-IMF-deal#ixzz2CsylS0nb