HE executive board of the International Monetary Fund (IMF) says that, while Jamaica’s economic programme remains strong, a number of issues are challenging the country’s growth performance.
Chief among these issues, according to IMF deputy managing director and Acting Chairman Tao Zhang, are: Vulnerability to weather-related shocks; prolonged wage negotiations with public sector trade unions, and the need to overhaul the pay structure and review the complex system of allowances in the public sector; reforming the Bank of Jamaica Act; implementation of the resolution framework for financial institutions; and the divestment of underutilised public assets.
According to Tao, who issued the statement after the IMF executive board completed its second review of Jamaica’s performance under the economic programme supported by the Stand-By Arrangement (SBA) on Monday, vulnerability to weather-related shocks continues to pose important challenges to Jamaica’s growth performance.
“Against this backdrop, supply-side reforms, including enhancing resilience to weather swings, must be accelerated to deliver better growth and job outcomes, reduce poverty, and improve living standards, while sustaining macroeconomic stability,” he said.
He stated that concluding the ongoing wage negotiations involving the Ministry of Finance and the public sector trade unions is necessary for budget certainty.
“More, generally, fiscal sustainability requires a continued reduction in the public wage bill, particularly as the Government rethinks its role, responsibilities, and size of its workforce,” the IMF boss said.
“Overhauling the pay structure and reviewing the complex system of allowances are vital foundations to a modern public sector that can attract and retain talent. In addition, a smaller public sector remains essential to create space for much-needed spending on health, education, social safety nets, public safety, and growth-enhancing capital projects,” he stated.
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