IMF renews calls for leaner, better paid public sector

The International Monetary Fund (IMF) is suggesting reforms it says could help the Jamaican government achieve a smaller but better paid public service.

IMF Mission Chief Dr. Uma Ramakrishnan told a press briefing Friday that the government will have to go beyond wage freezes and adjustments to non-wage benefits to achieve the fiscal space to create growth.

She argues that while considerable progress has been achieved on macroeconomic policies, growth and social outcomes have been discouraging.

She says economic growth continues to disappoint, averaging only 0.9 per cent since the reforms began. 

Ramakrishnan says structurally, reducing the wage bill is critical for the government to reprioritise spending toward growth-enhancing projects. 

But she says creating the space for such spending will require more than wage freezes.

Yesterday, Ramakrishnan announced that Jamaica has satisfied all the benchmarks under the stand-by arrangement with the IMF.

Consideration by the IMF’s Executive Board is tentatively scheduled for April.

Upon approval, an additional US$233 million would be made available to Jamaica.

However, the government has already stated it expects the agreement to come to an end without making a draw down from the Fund.

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