Ross

A leading international financial analyst is expressing concern that Jamaica's delay in concluding an agreement with the International Monetary Fund (IMF) is hurting the country.

Dr Carl Ross of the international investment firm Oppenheimer says the length of time the Jamaican government is taking to complete the proposed US$1.2-billion agreement is unusual and worrying.

"From the international perspective, it is difficult for a lot of people outside the country, and even inside the country, to understand why is it taking so long," Ross said at a recent function staged by Sterling Asset Management in New Kingston.

"You look at a country like the Dominican Republic that decided back in September that it should, probably for precautionary reasons, have an IMF programme in place. It took them about two weeks to negotiate it," Ross added.

Jamaica has been in talks with the IMF for the better part of four months with the date for the signing of an agreement being a moving target.

no update

At the last announcement, Finance Minister Audley Shaw said he remained convinced that the deal would be done before the end of this month.

But Shaw has provided no update since last week when a four-member team left the island for Washington to continue the talks.

"There is an enormous amount of speculation right now and the government and the IMF are not able to give us an inside look into what's happening because that would maybe defeat the purpose," Ross said.

"The signal that it is giving people outside the country, including the rating agencies ... (is that) because it is taking so long, there must be a problem.

"There must be a discussion of the debt restructuring .... the IMF must be going back and forth unable to balance the budget, unable to square the numbers no matter what the policy options are," added Ross.

cheap money

He argued that given the conditions inherited by the Bruce Golding administration it had no option but to go after the cheap money from Washington.

According to Ross, while the country is not yet desperate to get the IMF agreement, the performance of its bonds and the confidence of the international financial community will remain shaky until the deal is signed.

"What I tell people outside the country is that there is no ticking time bomb here why you need this pot of gold from the IMF by next week ... . There is not a lot of pressure on your net international reserves, we don't see really any evidence of capital flight or panic," said Ross.

However, he noted that this was not the first time that Jamaica was entering into a relationship with the IMF, so there was no ready excuse for the delay.

Ross later told The Sunday Gleaner that Jamaica's bonds were trading down between five and 10 points since the latest downgrade by Standard & Poor's and this would remain a problem until the IMF deal is signed.