In support of Jamaica’s recent application to return to the International Monetary Fund (IMF) to gain relief support, Dr Karim Youssef, resident representative for the IMF in the country, described the move taken as warranted given the unprecedented nature of the COVID-19 pandemic.
“Economies around the globe are being stopped in their tracks — so these are exceptional times that require exceptional actions,” he said while speaking to the Jamaica Observer last Thursday.
In agreeing with the sentiments of his managing director, Youssef said that the crisis caused by this virus with which the world is currently grappling with knows no bounds.
“This pandemic is a crisis like no other; figures from the world economic outlook for member countries put forward a forecast of the global economy contracting three per cent this year as a baseline scenario. This is a reflection of the level of uncertainty and the potential of the risk that lies ahead,” he told Sunday Finance.
In justifying the need for Jamaica to return to the fund for assistance under the Rapid Financing Instrument (RFI), he noted that the fund facility, which was designed for emergencies, will allow the country to access funding without the usual conditionalities such as those under stand-by agreements (SBA) and extended fund facilities.
“The actions taken now will determine the speed and the strength of the recovery and the gross implications for everyday people. The COVID crisis is causing a tragic loss of life, the policies that countries need to use must be sufficient to fight. This has turned the world upside down, with Jamaica, of course, being one of those countries.”
The IMF representative further said that with Jamaica’s decision to keep its offices open following the end of its programme last November, this had allowed close contact and cooperation. He disclosed that while there is a pipeline of countries seeking support — “the team is working to make sure that they are providing Jamaica with the best level of support”.
Mentioning that the organisation’s board, just last week, decided to increase the access limit of the RFI from 50 per cent of quota to 100 per cent of quota, Jamaica stands to benefit from more funding.
“Jamaica’s quota in the IMF is around 382 million special drawing rights (SDR), which is roughly a little over US$500 million,” Youssef said.
Finance Minister Dr Nigel Clarke, announcing the return to the fund for support last week, said that the decision was taken to safeguard the gains made by the country over the past years — gains which are now threatened by the uncertain nature of the pandemic.
“The RFI will assist Jamaica to endure this period and emerge stronger while preserving the macroeconomic stability that all Jamaicans have worked and sacrificed to achieve,” he said.
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