Jamaica Gleaner
Published: Wednesday | July 22, 2009
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Private sector, analysts react
Joseph M. Matalon, President, Private Sector Organisation of Jamaica

In the context of a projected severe contraction in local economic growth, recent large declines in foreign-exchange earnings and a lack of access to international capital markets, the PSOJ believes that pursuing a new borrowing relationship with the IMF is a prudent policy action.

Don Robotham, Cultural anthropologist

Although Minister (Audley) Shaw's statement was not very specific, it is clear that the primary IMF conditionality is the reduction of the Budget deficit. The IMF may well require that the Jamaican Government reduce the budget deficit to about four per cent by the end of the 2009-2010 financial year. To achieve this, the Government would probably have to restore user fees in education and health as well as delay the outstanding J$8 billion back-pay due to the teachers.

Omar Azan, President of the Jamaica Manufacturers' Association

Jamaica is actually at the last resort for funding, so it means that we need to increase our productive capacity, so that we can produce our way out of our problems rather than import our way into debt.

One of the things that could possible come out of it, which would be positive for business people, is the possibility of finding ways of lowering interest rates to allow businesses to prosper and foreign exchange to be earned through tourism and other activities.

Dennis Morrison, Economist

Many people felt that the 'failure' of IMF quarterly tests in the 1970s and 1980s that were followed by heavy doses of devaluations, painful Budget cuts and layoffs of thousands of public-sector workers deepened the country's economic and social problems.

The fact that Jamaica suffered massive losses in foreign-exchange earnings in those years, which could not be made up except by borrowing from the IMF, then the only available source, is much less recognised.

With the crisis sweeping international financial markets, the island again has no alternative source from which to make up the huge losses arising from closure of two-thirds of the bauxite industry, and the fallout in remittances and tourism receipts.

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