Prime Minister Bruce Golding speaks during the Budget Debate on yesterday. - Rudolph Brown/Chief Photographer

AN ASSESSMENT yesterday by Prime Minister Bruce Golding of the probability of Jamaica returning to a borrowing relationship with the International Monetary Fund (IMF) suggested that the question Jamaicans should be asking is, how soon?

Declaring that his administration was willing to have dialogue with the parliamentary Opposition to consider the country's options, Golding said the country was facing a crisis.

Making his presentation to the 2009/2010 Budget Debate, the prime minister pointed to the "freezing" of the capital markets, the significant fallout in the bauxite/alumina sector, which accounts for almost 60 per cent of exports, as well as the shrinking size of remittances.

Draw on reserves

In the context of these challenges, he said the country might have to draw on the reserves beyond the margin of safety.

"We are prepared to discuss all these issues with the Opposition. The country's interests are at stake. I suggest respectfully that it is not in the country's interest to make this a political cause célèbre," Golding warned.

Finance Minister Audley Shaw, central bank Governor Derick Latibeaudiere and other technical officers have been instructed by the prime minister to make themselves available to have dialogue with the Opposition.

Last week, Shaw and Latibeaudiere went to Washington and held talks with IMF officials to explore the type of assistance that might be available, if needed.

In a comprehensive presentation, Golding found favour with a recommendation by Opposition Spokesman on Finance Dr Omar Davies to source funds from the Tourism Enhancement Fund (TEF) to assist with housing in tourist resort areas.

He said the board of the TEF had approved the allocation of $1 billion over the next two years to upgrade and regularise squatter settlements in Montego Bay and Ocho Rios.

Proposal discarded

However, Dr Davies' second proposal to divert funds from the Universal Access Fund for infrastructure projects was discarded.

According to Golding, money from the Universal Access Fund was to be used exclusively to expand the use of the Internet locally. He said the United States authorities would raise a red flag against the move, arguing that "we were staying in Jamaica and taxing US citizens in the US".

On another matter, the prime minister told his parliamentary colleagues that the National Insurance Scheme (NIS), which provides pension benefits to thousands of Jamaicans, faced a serious problem.

He said a review of the fund suggested that it could be severely eroded within the next 13 to 17 years. Golding explained that pension beneficiaries were increasing rapidly and the fund was paying out more than it was collecting.

In this regard, an increase in the amount paid for NIS will take effect in July.

Commenting on plans to consolidate statutory deductions, Golding said a public education programme would be launched shortly to prepare employers and employees for the change that would take effect on July 1.

edmond.campbell@gleanerjm.com