Kingston.
Dr Gene Leon the International Monetary Fund's outgoing senior resident representative in Jamaica, has warned that whether the island pull its way out of the massive debt it faces will depends on the policis that are put in place.
According to Leon, wishing away" the debt stock was not an option, as that would still not solve the problem.
"Supposing tomorrow God would give us a wish and that one wish was to get rid of the entire Jamaica debt, [so] you wake up tomorrow morning and you have zero debt," he said, as he sought to illustrate his point. "What guarantee would you have that in five years' time, in 10 years' time, the debt is not exactly back where it was? Ultimately, it is the policies that you are going to put in place," he asserted.
Seeking to put the IMF deal into perspective, Leon, who demits office at the end of next month, pointed out that Jamaica is now faced with a 150 per cent debt-to-GDP ratio, as well as accumulated net indebtedness to other nations of about 125 per cent, or one and a quarter times what is produced annually.
According to him, this is compounded by 40 years of less than one per cent economic growth, caused by low productivity, lack of competitiveness, rising energy costs, and inhibiting bureaucracy.
"You are starting from that position … . Your creditors and lenders of first resort are not comfortable in wanting to extend more financing to you," Leon reasoned.
"That initial position says you have to do something about it because, going forward, you are not sustainable," he argued.
However, rather than question how realistic the programme is, Leon suggested that Jamaica examines its resolve to meet the target agreed to in the standby deal.
He was speaking at a editor's forum held by the Gleaner Newspaper.
You must be logged in to post a comment.