Dr. Uma Ramakrishnan, IMF Mission Chief to Jamaica
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Dr. Uma Ramakrishnan
The Board of the International Monetary Fund (IMF) is cautioning that the Jamaican Government could lose public support for its economic programme if it does not address discouraging economic growth and social outcomes.
The Board met on April 10 to review Jamaica's performance under the Stand-by Agreement and noted that the government met all quantitative performance criteria and structural benchmarks for the assessment period ending December 2017.
But it had some concerns.
The IMF Board noted that the economic reform programme that began in May 2013 has been a turning point for Jamaica.
But it said after five years of reforms and tenacious fiscal consolidation, risks from reform fatigue and loss of social support are high, especially as growth remains feeble and crime escalates.
The IMF said economic growth continues to disappoint, averaging only 0.9 per cent since the reforms began.
It pointed to crime, bureaucratic processes, insufficient labour force skills, and poor access to finance as the main obstacles to growth.
In addition, the IMF said the agricultural sector's vulnerability to weather shocks exacerbated rural poverty in 2015.
Dr. Uma Ramakrishnan, IMF Mission Chief to Jamaica, said structurally reducing the wage bill is critical for the government to reprioritise spending toward growth-enhancing projects.
"There has to be some standardisation of the pay structure... The allowances review was done in 2017 and that shows that there are 160 or 180 allowances; there's a plethora of allowances which are exacerbating the current inequalities in the pay structure," she asserted.
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