## Press Release: IMF Mission and Jamaican Authorities Reach Staff-Level Agreement on Key Elements for EFF-Supported Program

_IMF News, February 15, 2013_

## Source details

**Canonical URL:** [Press Release: IMF Mission and Jamaican Authorities Reach Staff-Level Agreement on Key Elements for EFF-Supported Program](https://www.imf.org/en/news/articles/2015/09/14/01/49/pr1351)

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## Bibliographic details
- Published: February 15, 2013

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### Overview of the staff-level agreement
- The mission reached a staff-level agreement with the Jamaican authorities on key elements of an economic program to be supported by a 48-month arrangement under the Extended Fund Facility (EFF).
- Arrangement amount: SDR479 million (about US$750 million or 175 percent of quota).
- The understandings are reflected in the authorities’ economic program as stated in the Letter of Intent to be reviewed by IMF Management and finalized before approval.
- IMF staff envisages that the IMF’s Executive Board would consider the proposed arrangement under the EFF by the end of March, subject to:
  - the timely completion of prior actions to be taken by the Jamaican government; and
  - obtaining necessary financing assurances.

### Financing, debt exchange, and participation requirements
- The authorities have announced a debt exchange intended to reduce Jamaica’s medium-term financing needs and contribute to debt sustainability.
- Success of the program depends critically on a high rate of participation of private creditors in the debt exchange.
- Continued support is expected from international financial institutions and other official creditors; securing financing assurances is necessary for a Fund-supported program.

### Economic challenges identified
- Over the last three decades, Jamaica has experienced:
  - very low economic growth;
  - declining productivity; and
  - reduced international competitiveness.
- A core factor: Jamaica’s unsustainable debt burden, which has:
  - undermined confidence; and
  - elevated risks to economic stability.
- High debt service has limited the government’s ability to provide services needed for sustained growth and improved welfare.

### Main objectives of the economic reform program
- Contain rising economic and external vulnerabilities and address economic imbalances.
- Put Jamaica on a path of sustainable growth.
- Promote macroeconomic and financial stability, including achieving and sustaining higher primary fiscal surpluses to underpin debt sustainability.
- Pave the way for private-sector-led growth through a comprehensive set of structural reforms.
- Promote social stability through enhanced social protection for the most vulnerable.

### Policy measures and structural reforms envisaged
- Strengthen public finances through:
  - comprehensive tax reform;
  - expenditure rationalization; and
  - improved public debt management and public financial management.
- Enhance resilience of the financial sector by strengthening:
  - supervisory frameworks;
  - regulatory frameworks; and
  - crisis management frameworks.
- Improve growth-generating efficiency by:
  - enhancing the business environment;
  - increasing competitiveness; and
  - strengthening institutional capacity and governance (including through a broad legislative agenda).

### Social protection measures
- Protect the most vulnerable and promote economic self-reliance through:
  - establishment of a floor on social spending;
  - maintaining the real value of PATH (Program of Advancement through Health and Education) benefits;
  - expanding re-certification; and
  - expanding the Steps-to-Work program.

### Key statistics and timeline
- EFF arrangement duration: 48-month arrangement.
- Proposed EFF amount: SDR479 million (about US$750 million or 175 percent of quota).
- Jamaica’s IMF quota: SDR273.5 million (about US$434 million).
- Timeline for IMF Executive Board consideration: by the end of March (subject to prior actions and financing assurances).
- Jamaica’s IMF membership date: February 21, 1963.

*Press Release No. 13/51 — February 15, 2013*

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## References

- [Jamaica and the IMF](http://www.imf.org/external/country/JAM/index.htm)
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_Source: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr1351_