The Prime Minister of Jamaica is going to the International Monetary Fund (IMF) for assistance to deal with the island's economic problems. But Bruce Golding has promised Jamaicans that his administration will only enter into an agreement with the institution if the terms are beneficial to Jamaica."We are not going to go back into any IMF agreement unless we are satisfied that that agreement is good for Jamaica, that it has the provisions in it to help Jamaica to move forward, and not to help Jamaica to go into any reverse gear. We are not into that," he said.
During his budget presentation last month, Golding said that Jamaica is looking at possible assistance from the IMF in light of the global financial crisis and continued concerns about the country's balance of payments.
The country's shortfall in foreign exchange is due to the impact of the global financial crisis on the island’s main sources of foreign exchange, particularly bauxite, remittances and tourism.
Its Net International Reserves (NIR) is looking a little better now at US$1.67 billion at the end of May following more than six consecutive months of decline.
On Thursday, Golding and his finance minister met with the social partnership group that includes the private sector, trade unions and the opposition to discuss the terms under which the country should enter into a funding arrangement with the IMF.
Golding promised to continue discussions with the groups as negotiations with the IMF, which begin in Washington next week, progresses. However he warned that the IMF intervention would not solve Jamaica's problems. The solution, he said, is to produce more and import less.
"We all recognise that while you may need an IMF agreement to help you through this immediate storm that we are facing, an IMF agreement is not going to solve the problems of Jamaica. No World Bank, no IDB (Inter American Development Bank), is going to be able to solve the problems of Jamaica...You could simplify it in one statement, we import too much and we do not produce enough for ourselves.
“It is only through increased production that Jamaicans would be able to build the economy, create jobs and build prosperity for the country.
"Whether the problem is unemployment, or crime, driven by a lack of opportunity, or it is bad roads because we are not deriving enough revenue to fix the roads as fast as we want...it comes down to one equation, we need to produce more, to depend on foreign producers less, and that is the way in which we are going to build the economy, create jobs and prosperity for Jamaica,” Golding added.
The IMF was Jamaica's worst nightmare during the 1970s when Michael Manley was forced to go to the institution for financial support for his People's National Party's (PNP) government's socialist polices. The IMF was less than sympathetic to Manley's "revolution", which did not suit Washington's agenda, and the courtship with the institution led to Manley's dramtic fall from power in 1980.
In that election a popular slogan of the opposition Jamaica Labour Party led by Edward Seaga was "IMF - Is Manley Fault". The PNP, despite Manley's personal charisma, was swept out of office with Seaga's JLP winning 51 of the 60 seats in Parliament in one of the most violent election campaigns the island has ever seen.
Manley eventually returned to power in 1989 with a revised economic plan and a toned down political philosophy.
Read the Jamaica Gleaner's column on Manley's social revolution
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