“The IMF team has reached an interim agreement with the Jamaican authorities on a set of guidelines to complete the fifth review under the SBA. The IMF Executive Board`s review is tentatively scheduled for April 2019. Once approved, an additional amount of SDR 160.8 million (about $224 million) will be made available to Jamaica, bringing the total amount of the loan available to about $1.4 billion. The Jamaican authorities continue to view the SBA as a precautionary measure. The EFF allows a country to further develop its internal structural integrity in order to strengthen economic growth without being overburdened by reimbursement costs.  Jamaica joined the International Monetary Fund (IMF) in February 1963 under the leadership of the Right Honourable Sir Alexander Bustamante, a year after the country`s independence.  From 1963 to 1966, Rt. Hon. Sir Donald Sangster, Jamaica`s Governor at the IMF and World Bank, and represented Jamaica in delegations at IMF and World Bank headquarters in Washington D.C. In 1963, the IMF granted Jamaica its first loan of SDR 10 million.
In 1967, Sir Donald Sangster was elected the second Prime Minister of Jamaica, both as Minister of Finance and Minister of Defence at the same time. . “The IMF team reached a preliminary agreement with the Jamaican authorities on a series of measures to complete the fifth review under the SBA. The IMF Executive Board`s review is tentatively scheduled for April 2019. Once approved, an additional amount of SDR 160.8 million (about $224 million) will be made available to Jamaica, bringing the total amount of the available loan to about $1.4 billion. The Jamaican authorities continue to view the SBA as a precautionary measure. Jamaica has indeed made tremendous progress in stabilizing the economy since May 2013. Inflation is at historically low levels, international net reserves have almost tripled and, most importantly, public debt has been put on a solid downward path. These successes were possible because the responsibility for the program was unwavering despite a change of government after the February 2016 elections. However, the expected dividends from the growth and jobs reforms have not fully materialized, in part due to a two-year drought and a Chick-V outbreak.
For more information on emergency financing requests approved by the IMF Executive Board, see a link to imf Loan Tracking: www.imf.org/en/Topics/imf-and-covid19/COVID-Lending-Tracker “The team welcomes the proactive steps taken by the government to strengthen national institutions in preparation for the exit of IMF financial support later this year. The planned Budget Council, the policy framework for financing natural disaster risks, the strengthening of macro-financial capacities within the Ministry of Finance and the Civil Service, and the anchoring of the operational independence of the central bank are important pillars. The government also plans to review the entire social safety net to improve benefits and coverage for poor households, implement an effective strategy for households that turn these programs into productive employment, and introduce better monitoring and evaluation systems. “The swift and vigorous correction of gaps in the governance of public bodies – including those identified in the Court of Auditors` report on Petrojam – is crucial to improve transparency and accountability, reduce opportunities for corruption, strengthen trust in public institutions and protect public funds.” We also welcome the Bank of Japan`s innovative public commitment to the importance of stable and predictable inflation. Further monetary easing is warranted to bring inflation back into the target range of 4 to 6 per cent, including an improvement in monetary transmission, while monitoring developments in oil prices, global finances and domestic factors. Maintaining a market-oriented exchange rate where the Bank of Japan`s currency sales are limited to episodes of disorderly market conditions is necessary for the transition to a full-fledged inflation target. Quantitative conditions. Member States` progress will be monitored against the quantitative objectives of the Programme (quantitative performance criteria and indicative targets). Disbursements of funds shall be subject to quantitative performance criteria, unless the Board of Directors decides to waive them. These are, for example, targets for international reserves and government deficits or borrowing that are in line with the objectives of the programme.
The new program has a different level of success. Now that economic stability has been restored, the loan supports the government`s focus on higher growth and employment to reduce poverty and improve the living standards of the Jamaican people. IMF News: Can you tell us what is different in the new stand-by agreement? Duration. The duration of an SBA is flexible and usually covers a period of 12 to 24 months, but no more than 36 months. Under the 2013 Extended Credit Facility and then the 2016 Precautionary Stand-By Arrangement (signed with a new government), the Jamaican authorities have made significant progress over the past six years in stabilizing the economy and improving social outcomes, with strong support for capacity building of international financial institutions and other partners. In particular, commitment costs. Funds committed under all SLAs are subject to a commitment fee levied at the beginning of each 12-month period on amounts that could be used during that period (15 basis points for committed amounts up to 115 % of the quota, 30 basis points for committed amounts above 115 % and up to 575 % of the quota and 60 basis points for amounts, which exceed 575% of the quota). These costs shall be reimbursed on a pro rata basis if the amounts are used during the period concerned. If the country borrows the full amount committed under an SBA, the commitment costs will be reimbursed in full. However, there is no reimbursement under a precautionary SBA under which countries do not shoot. In the event of an economic crisis, countries often need financing to overcome their balance of payments problems. Since its creation in June 1952, the IMF`s Stand-By Arrangement (SBA) has been the workhorse of emerging and developed countries.
The SBA was improved in 2009, along with the Fund`s broader toolbox, to be more flexible and responsive to the needs of member countries. Conditions have been streamlined and simplified, and more funds have been made available in advance. .