September 19, 2020

Jamaica urges region to continue with fiscal consolidation policies at CDB meeting in Cayman Islands


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Jamaica says Caribbean countries must continue with fiscal consolidation policies despite the sluggish economic growth. Temporary Alternate Governor for Jamaica, Ambassador Sharon Saunders, addressing the annual board of governors meeting of the Barbados-based Caribbean Development Bank (CDB) here on yesterday, said that the deliberations were taking place at a time when the region continues to face sluggish growth, particularly in the tourism-intensive countries, and stubborn fiscal imbalances.

“The conundrum that we face in the Caribbean is that fiscal consolidation needs to continue despite the sluggish growth environment. “For many of our countries the near-term imperative is to implement measures to achieve fiscal and debt sustainability, and looking further ahead we will need to pursue supply side initiatives and structural reforms to enhance competitiveness and growth and thus create an environment in which the private sector can flourish,” she said.

Saunders said Jamaica recognises the urgency that is required and has pursued the process of fiscal consolidation and strengthening of the fiscal policy framework which is critical to the attainment of fiscal and debt sustainability. “In this regard, we are undertaking comprehensive tax reforms, strengthening tax compliance, engaging the unions in discussions to contain expenditure on wages and pensions, implementing measures to improve public financial management and employing an effective public debt management strategy, among other things.”

She said that to address the competitiveness and growth issues, the Portia Simpson-Miller administration intends to introduce legislative and administrative reforms to address the bottlenecks to major private sector investment projects and to make the business environment more enabling by reducing the transactional costs of doing business.

She said that high energy costs have long been recognised as a major impediment to growth in Jamaica and that the government is already exploring ways to attain short-term efficiency gains while simultaneously pursuing medium-term policies to change the energy matrix to cheaper as well as renewable sources of energy.

“The necessity to curtail public expenditure dictates that countries in our region establish priorities in the investment envelope for public sector projects. The reduced outlay for capital expenditure does not only require targeted public investment but also forces authorities to place increased reliance on borrowing at concessional rates. In this respect, CDB has been an important and reliable partner in addressing our development needs.”

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