May 2013 Financial News

IMF deal approved (Jamaica)

May 02, 2013

With the International Monetary Fund (IMF) yesterday approving Jamaica's application for a four-year extended fund facility, Finance Minister Dr Peter Phillips has urged all Jamaicans to read the agreement carefully "to understand fully what will be required of each of us to advance the economic reform and allow the nation to successfully complete its obligations under the programme".

Speaking in Parliament yesterday, Phillips said the agreement would unlock more than US$1 billion of loan support from the World Bank and the Inter-American Development Bank and that the first drawdown from the IMF of more than US$200 million should be completed in the next few days.

Here are some of the key deliverables and targets in the programme, which will allow Jamaica to draw down special drawing rights of 615.4 million or approximately US$932.3 million.

A logistics master plan to be prepared by the middle of 2013-2014 and will incorporate a commodity port, dry dock, and Vernamfield air cargo and passenger facility.

Broader tax reform to be prepared with assistance from the IMF and IDB will become effective at the start of 2014-2015.

Yielding permanent growth dividends by raising growth to at least two per cent by 2016-2017.

Debt-to-GDP ratio of no more than 100 per cent by 2015-2016.

Improve overall public-sector deficit from 4.3 per cent of GDP 2012-2013 to a surplus of above one per cent by end of 2016-2017.

Reform of various laws to enable the Bank of Jamaica and the Financial Services Commission to investigate and impose administrative and civil remedies on unlawful financial organisations such as Ponzi schemes that engage in fraudulent activities.

Balanced Budget by 2015-2016

Establish flexible work framework arrangements by end of 2013-2014.

A floor for social spending which is measured at the total amount in this year's Budget.

Inflation eight per cent by 2016-2017.

Legislative amendment for pension reform by end of 2013-2014.

Doubling of the funding available to micro, small and medium-size enterprises by 2016-2017 relative to 2013-2014.

Wage-to-GDP ratio of no more than nine per cent by 2015-2016.

A timetable for implementation of new pension system by 2015-2016.

Reduce public debt-to-GDP ratio by 2020.


Source:
Jamaica Gleaner
Thursday May 2, 2013

http://jamaica-gleaner.com/gleaner/20130502/lead/lead5.html