IMF Loan to Help Jamaica Cope With Growth and Debt Challenges

Jamaica’s very high debt undermines confidence and investment

New program seeks to boost growth and jobs, lower debt, improve competitiveness

Challenge is to achieve agreed budget surplus target

During most of the past three decades, Jamaica has suffered from very low growth, high public debt, and serious social challenges. Repeated efforts to overcome these economic problems, often with Fund support, have failed to result in an enduring recovery.

The authorities’ new program, approved on May 1, seeks to address long-standing structural challenges by implementing an aggressive, front-loaded, and comprehensive reform agenda.

In this interview, the IMF’s mission chief for Jamaica, Jan Kees Martijn, discusses the key priorities for Jamaica and what it will take for the program to succeed.

IMF Survey: Jamaicans know they face significant economic challenges. We also know that we have to work together to resolve them. Give us a sense then of what the key priorities are in Jamaica for the Fund and the government. And what role do you envision for the Fund beyond financial support in promoting these measures?

Martijn: Building a more prosperous future for Jamaica hinges on the resolve of the authorities and other domestic stakeholders to adjust policies to lower debt to a sustainable level and establish the conditions for durable growth. The authorities’ program provides a realistic roadmap to achieve these goals. In this context, I am encouraged to see the creation of a broad-based, private sector-driven committee to provide oversight of policy implementation. This committee includes government creditors, labor unions, and representatives of civil society.

The Fund is a supporting partner in the authorities’ efforts to address their long-standing structural challenges. Fund support includes our policy dialogue, technical assistance, and, of course, formal support for the program, including financing. We will work closely with the Jamaican authorities, as well as with its domestic and foreign partners, over the four-year program period to help maintain the reform momentum and strengthen the program over time.

IMF Survey: Jamaica has undertaken many fiscal adjustment programs in the past. How confident are you that the country can deliver this time?

Martijn: The new government, which took office at the beginning of 2012, faces a unique opportunity to make a renewed effort to address the challenges of low growth, high debt, and...