IMF watch: Pressure to Meet Immediate Targets frustrates Long-Term Policy Agenda

While the Government is pre-occupied with resolving the differences with the IMF to smooth the way for the release of more funds under the Standby Agreement with the Fund, there are long run problems that are in need of far more policy attention. As with previous agreements with the IMF the “tyranny of the immediate” need to meet targets continues to place on the back burner long-term policy attention to social and economic development.

The Finance Minister, Audley Shaw announced back in mid-July that the overdue 4th and 5th  quarterly reviews of the standby agreement (SBA) that the government entered into in January 2010 await agreement with the IMF on a range of issues.  Normally, the review would be done at the end of each quarter but differences with the IMF led to the postponement, first of the review of the performance in the December quarter, and subsequently,the review of the March quarter’s performance. According to Shaw, these include ensuring sustainable public sector staffing costs, implementing tax reform, including reductions in discretionary tax waivers, and further improving tax administration. As a result the Government of Jamaica (GoJ) has not been able to draw-down the next tranche of the IMF loan of US$253 million. Nor will some of the flows from the complementary packages for budget support that were put together by other multilaterals and bilaterals be forthcoming until the GoJ and the IMF come to some agreement on going forward. The EU’s Head of Delegation has publicly confirmed the withholding of further disbursements from the EU’s support programme at this time. 

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