Category: Top stories: Local

THE GOVERNMENT has started talks with key stakeholders in an effort to get buy-in to its medium-term economic programme and a planned debt-management scheme. The debt-management scheme will be a key component of any deal which the Government strikes with the International Monetary Fund (IMF) and will involve domestic debt holders taking a cut in their interest rates.

GOVERNMENT says that the proposed US$1.3 billion standby loan facility with the International Monetary Fund (IMF) is dependent on total backing from the financial sector for its $736-billion domestic debt exchange programme, which is projected to save Jamaica $40 billion during the next fiscal year.

THE decision by the Jamaican Government to go back to the International Monetary Fund (IMF) underscores the fact that the economic and financial management of the country for the last two decades has by and large been unsuccessful.

PRIME MINISTER Bruce Golding has said that his administration was in the process of crafting a new policy to reduce interest rates. Golding was responding to a question about the Government obtaining advances from the Bank of Jamaica (BOJ) and former finance minister Dr Omar Davies’ sharp criticism of that move.

Jamaica’s central bank Governor Brian Wynter is confident the economic doubts that caused the domestic financial market to reject recent government bond offers will be lifted, removing the need for continued Bank of Jamaica (BOJ) lending, except in the most extreme circumstances.

Dr Omar Davies’ charge that a $3 billion advance to government by the Bank of Jamaica (BOJ) in November was unsecured funds that amounted to the printing of money, has been followed by an admission from the central bank that its support to the Golding administration reached $23.1 billion in the past two months.

GOVERNMENT cannot repay the International Monetary Fund (IMF) standby arrangement without increased productivity to offset its declining revenues, say analysts.

FINANCIAL analyst Dennis Chung says that Jamaicans have been taxed an additional $115 billion over six years to grow the debt and not the economy.

While the country enters 2010 with many economic challenges, most analysts agree that reducing the fiscal deficit should be priority number one.

Except engaged in as mere ritual or mindless custom, happy New Year wishes are just that – wishful thinking, in light of the harsh and punishing economic conditions which are likely to be experienced in Jamaica this year.