Government to seek IMF extension

THE GOVERNMENT could remain in the straightjacket of the International Monetary Fund (IMF) for an additional two years.

Finance Minister Audley Shaw yesterday said the Government is seeking to secure a 24-month extension to its current standby arrangement with the IMF.

Jamaica's current arrangement with the multilateral institution expires in May 2012.

In his opening contribution to the Budget Debate in Gordon House yesterday, Shaw said Cabinet had given authorisation for him to seek an extension with the multilateral body.

"This is a commitment by this Government to staying the course of fiscal discipline. We are fully aware that next year an election is due, but election or no election, the people of Jamaica can be assured ... we are not going to run with it into another election," Shaw declared.

He told the House that an extension of the standby agreement was a preferred alternative to an extended fund facility.

"We believe that it is in the best interest of the country to continue its relationship with the IMF," Shaw declared.

He said a continuation of the programme would send a positive signal that would maintain stability, reinforce confidence and "provide the important factor of certainty to stakeholders".

Shaw added that the local business community has called for an extension of the standby agreement with the IMF.

In February 2010, the executive board of the IMF approved a 27-month standby arrangement with Jamaica in the sum of US$1.27 billion.

The Jamaican Government had entered into the agreement with the IMF to support the country's economic reforms and help it cushion the effects of the global economic meltdown.