Economic forum in Jamaica a success, says IMF director
Director of the International Monetary Fund’s (IMF) Western Hemisphere Department, Alejandro Werner, has declared a high level forum held last week in Jamaica a success in facilitating frank discussion on economic challenges in the region and ways to improve growth, employment and social development goals.
The event, held in collaboration with the government of Jamaica under the theme: ‘Unlocking Economic Growth,’ involved representatives of the IMF, World Bank, Inter-American Development Bank (IDB), the Caribbean Development Bank (CDB), public and private sector policymakers, financial institutions and experts in global economics, finance and academia.
Finance ministers and other government officials from Jamaica, Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Grenada, St Lucia, Suriname, and Trinidad and Tobago were in attendance.
Speaking at a press conference at the conclusion of the two-day event in Montego Bay on Friday, Werner praised the high level of participation and open discussion that took place.
Focus, he said, was placed on three key areas identified at last year’s forum, as providing the greatest challenges to unlocking growth in the region. These are: energy provision, tax incentives, and financial sector resilience.
In the discussion on energy provision, participants called for a comprehensive energy strategy for the Caribbean. Highlighted was the high cost of electricity, which is on average four times as high as in the United States, providing a major obstacle to competitiveness, economic growth and employment creation.
Participants also underscored the need to encourage the development of energy from renewable sources, as a means of reducing costs and dependence on fossil fuel.
Werner said there was recognition that oil- and gas-based electricity generation will continue to dominate for some time, and therefore, there is urgent need to re-examine strategies to reduce transmission losses and improve production efficiency with the support of the private sector, multi-lateral institutions and other players.
Moreover, energy subsidies, where they exist, should be gradually scaled down and substituted by targeted regimes to support the poorer segment of the population.
On reforming tax regime for investment, participants agreed that private sector investment is key for economic growth and that finding the right balance between attracting foreign and local investment and raising revenues, should be the guiding principle in determining tax regimes.
Regarding the building of a more resilient financial sector in the region, Werner said participants stressed the need for a more robust financial sector that safeguards financial stability and provides the strong institutional role that these economies need to support growth, employment creation, and financial inclusion.
There was also widespread agreement that priority should be placed on strengthening the framework for bank regulation and supervision.
The regime to identify unviable banks and facilitate their orderly exist from the market without undue disruption or unfair cost to taxpayers, and the provision of the tools to restructure weak banks and rebuild capital buffers, also found favour among participants.
The provision of affordable and accessible credit to micro, small and medium-sized businesses provided robust discussion, Werner stated.
Perhaps one of the salient outcomes of the discussions was the agreement that there is need for cross border collaborations to limit spill-over when financial problems arise in one country, therefore limiting the impact on the region.
The main challenge, the IMF official said, was that of moving the discussions from being an intellectual activity to becoming the basis of action plans formulated by individual countries in the region.
Jamaica’s financial secretary, Devon Rowe, in endorsing Werner’s assessment, said the forum was timely and the topics discussed were relevant to the shaping of the island’s economic programme.
“It was gratifying to see that there are many activities that Jamaica is undertaking in relation to its fiscal consolidation efforts that were reaffirmed in the meeting,” Rowe stated.