Business View Caribbean - Dec 2014 69
Talking Business:
Peter Phillips
30 minutes with Jamaica’s Minister of Finance and Planning
BUSINESS VIEW: I’ve gathered that the economy in
Jamaica is tumultuous, but can you give me a sense,
from your position, how you feel things are going?
Where you are now, where you are going and where
are you on your way to?
PETER PHILLIPS:
First of all, I think that is in recovery
– that’s the term that I would use, that an economic re-
covery is underway as part of a major economic reform
program. Where we were in 2012, when the adminis-
tration took office, was that the relations with the Inter-
national Monetary Fund had been ruptured, because
the standby agreement had gone off the rails, so to
speak. There was no access to multilateral sources
of finance from the World Bank and IDP. And, in fact,
many bilateral sources, such as from the European
Union, were also blocked because of the breakdown in
the relationship with the International Monetary Fund.
Our debt was in excess of 146 percent of GDP, mea-
sured by the debt to GDP ratio. The economy was stag-
nating, our reserves were falling, as a consequence
of not having access to multilateral sources, and not
having access either to global capital markets.
All of that has been reversed, as a consequence of the
economic reform program and as a consequence of us
securing an extended four-year fund facility agreement
with the International Monetary Fund. It has involved
major effort. We are in a substantial depreciation of
the currency vis-à-vis the U.S. dollar, all is part of an
effort to create greater levels of competitiveness in the
economy. We have had to have wage restraint, exer-
cised by the public workers, but those sacrifices have
resulted in a reduction of the debt that now stands be-
low 139 percent of the GDP and is trending downward.
We have an overall target of getting to 97 percent debt
to GDP by 2020 and we are on track for that. Growth
has returned – we have been able to return to global
capital markets. We have completed successfully five
reviews and are undergoing the sixth. We are confident
we will successfully complete the sixth review. And, our
inflation is within target range. So, all told, there is a
certain rebalancing of the economy to make it more
competitive.
Our global competitiveness ranking following mid-tax
reform efforts, following a lot of administrative reform
