THE CONVERGENCE of policies mooted by the International Monetary Fund (IMF) and those advocated by local technocrats was thrown into sharp focus last week. At a session aimed at strengthening relationships with the IMF and member countries in the region, the IMF's Western Hemisphere representative gave a sneak preview of the outlook for the local economy in 2006.
Concerning the outlook for 2006, the IMF argues that economic growth should pick up and inflation decline to single digit. For these changes to occur, however, the IMF recommends that the authorities should enhance Jamaica's growth prospects by improving the productivity of foreign investments, sticking to fiscal targets and improving the business climate by confronting crime.
What was most significant about these latest IMF recommendations is that they occurred in a context that lacked the traditional economic policy prescriptions and dogma that dogged Jamaica/IMF relations in previous decades.
In fact, there was a noticeable level of consensus with the IMF's position and that of our local technocrats on strategies that could improve economic performance.
Secondly, the IMF contends that Jamaica's economic performance could be understated because of the economy's inability to assess more accurately the contribution of the informal economy.
A third area of convergence of an IMF position and that of the local technocrats has to do with the establishment of a Regional Disaster Mitigation Fund. The IMF has given the assurance that it is willing to collaborate with the World Bank and USAID agencies to work on this project. Some months ago, Finance Minister Dr. Omar Davies said that a study was under way on the feasibility of establishing a Regional Disaster Mitigation fund.
An additional point of tremendous significance is that the IMF has given qualified support for the establishment of the CARICOM Single Market and Economy (CSME). Actually, the IMF contends that Jamaica could benefit from the economies associated with the regional market. However, the IMF was quick to point out that the rules governing the CSME should be consistent with broader realities of globalisation.
What the above-mentioned presentation suggests is that the new realities of the global economy have caused the IMF to re-evaluate its image and opt for greater transparency. Hopefully, smaller regional economies like Jamaica can convert this new reality to facilitate a speedier transformation of the local economy. Of course, this couldn't happen too soon!
THE OPINIONS ON THIS PAGE, EXCEPT FOR THE ABOVE, DO NOT NECESSARILY REFLECT THE VIEWS OF THE GLEANER.
