Mar 2016 Financial News

Outstanding commitments to the IMF... a work in progress

Mar 09, 2016

The Government of Jamaica is currently near the end of a four-year agreement with the International Monetary Fund (IMF) which contains a number of fiscal and monetary targets.

For each review period — there are five remaining — there are also other goals or structural benchmarks which are to be met. The new political administration is expected to discuss these with the IMF during the current week.

Here are some which are works in progress:

• Sharply reduce public debt, which is expected to decline to 96 per cent of GDP by March 2020. This is expected to be achieved by sustained fiscal efforts, policies to bolster growth, as well as additional measures.

• Strengthen efficiency in debt management through increased staffing, skills training, and improving securities operations and domestic market development.

• Put in place shared services within the central government starting with legal services.

• Wages and salaries: A commitment was given to reducing the wage bill to nine per cent of GDP in 2016/17 and maintaining the ratio of public debt to GDP on a downward path over the medium term.

• To meet the GOJ’s overall wage ceiling, the GOJ is expected to reduce the size of the public sector through the elimination of posts and an attrition programme, “subject to the need to preserve capacity in a limited number of priority areas”, according to the Letter of Intent.

• The new public pension system, is expected to be implemented at the start of FY 2016/17.

• Monetary policy aims to achieve single-digit inflation within a flexible exchange rate regime. Inflation in the range of 5.5 to 7.5 per cent in FY2015/16 is targeted.

• Complete arrangements for financial crisis preparedness and management. These include legislative provisions to support the national crisis management plan and a resolution framework for the banking and securities sectors that is expected to be tabled in June 2016.

• Complete the development of a new National Policy on Poverty and a new Poverty Reduction Programme and develop measures to strengthen current social protection plans.

• Complete public financial management reform including new procurement and reporting systems.

• Complete the merger of the commodity Boards (Cocoa, Coffee, the regulatory functions of the Coconut Industry Board) and the Export Division of the Ministry of Agriculture and Fisheries (now the Ministry of Industry, Comerce and Agriculture). The full merger is expected to be completed by June 2016.

• Complete the divestment the Petroleum Company of Jamaica Limited, Petcom.

• Complete the privatisation of Norman Manley International Airport (NMIA).

Source:
BY AVIA COLLINDER
collindera@jamaicaobserver.com
Business reporter
Jamaica Observer
Wednesday March 9, 2016    

http://www.jamaicaobserver.com/business/Outstanding-commitments-to-the-IMF----a-work-in-progress_53954