Byles: Jamaica will need continued IMF support
CO-CHAIRMAN OF the Economic Programme Oversight Committee (EPOC), Richard Byles, says Jamaica will, for a very long time, need the support of the International Monetary Fund (IMF) if the country is to achieve debt and financial sustainability.
Byles, in making his presentation at a recent symposium hosted by the Department of Economics at the University of the West, Mona Campus, said he was pleased that the Government has signalled its intent to remain with the IMF by way of a new staff-level agreement which it announced recently.
He said that his preference of Jamaica remaining with the IMF is not because he felt that the country’s financial technicians are incompetent, but because “they need the [support] of the International Monetary Fund to make sure that we do what we know we are supposed to do”.
In further defending his stance, Byles said politicians from both major political parties were susceptible to political pressure and could back down from making the tough decisions needed to advance the cause of the country.
“Often times when you look back in our history of decision making, we have taken the wrong road. Had we taken the right road back then, life would be easier. So we need to have an institution like the IMF that can — whether it is for them to be blamed, or for them to determine what we have to do — [help Jamaica] to do the right thing,” Byles said.
The Sagicor boss told his audience of university students, lecturers and financial practitioners that IMF would negate the pressures that are brought on by policymakers to defend special interests, as the institution brings an objective view.
“The special interests in the past, have prevailed and prevented us from doing the right thing, for example in taxation. The tax system we have has distortions that are born of special interest and it takes an international institution to say, ‘you [have] to fix this or that’,” Byles argued.
He emphasised the point that though Jamaica has made significant strides in bringing down its debt-to-GDP ratio to 120 per cent, the country is still at the edge of a financial precipice.
“The economy is still so fragile, still so small and open, a single weather event can throw us off track.
“A single world financial event will throw us off track. Rising oil prices will throw us off track.”
Declared Byles: “We need a very strict programme!”
In the meantime, Byles is of the view that paying down the debt should not be an excuse for not finding a creative project to drive economic growth.
“We cannot see debt as something that we can put aside and continue to build our wealth,” he said.
The EPOC co-chairman argued that reducing the country’s debt and using initiatives to grow the economy are parallel activities which are critical to achieving financial prosperity for the country. “I believe that this is what the current administration is articulating that it wants to do—put a little more emphasis on the growth side, but they are paying down the debt and we have no alternative to that,” Byles said.