IMF Facility to Provide Needed Imports and Support Social Safety Net

 


The Jamaican government has launched an ambitious program of economic structural reform aimed at increasing production, employment and foreign investment and ensuring political and social stability, Jamaican Ambassador Stephen Vasciannie told Qorvis Focus Washington.

Jamaica recently received an IMF loan of $932 million, funds that “are being used for balance of payments support and also to shore up the Jamaican dollar,” the ambassador told interviewer Chuck Conconi.

“The loans have been helpful to bring stability, but now we are looking towards enhancing production,” he said.

Increasing Production and Foreign Investment

“Our economic problems stem largely from the fact that there is a high unemployment rate and from the fact also that the country tends to consume more than it produces, so what we are trying to do in government is raise the employment level and also open up the country to foreign investment so that we can raise production and productivity.”

Ambassador Vasciannie pointed to areas Jamaica is working to develop, including “the Logistics Hub Project,” which stands to take advantage of the expansion of the nearby Panama Canal by allowing “ships coming through the Panama Canal [to] be able to use Jamaica as a significant transshipment port.”

The addition of a new airport, also to facilitate transshipment, and the construction of a dry-dock harbor to repair ships are also options the government is exploring under the project.

Jamaica is already experiencing success in attracting foreign investment from a number of countries. “For instance, a number of Spanish hotels that have set up chains on the north coast to facilitate tourism,” the ambassador explained. Beyond tourism, Ambassador Vasciannie points out that Jamaica has “had Chinese investment in infrastructure and we have had United States investment in telecommunications.”

Social and Political Stability

The IMF funds will also help Jamaica deal with the problem of crime and poverty.

“The government will be able to spend money to ensure that there is a social safety net,” Ambassador Vasciannie said. “Very few people will fall below that safety net; it’s a way of keeping the democracy alive.”

Despite its social problems, Jamaica has been a stable democracy since it achieved its independence from Britain in 1958.

“We have had a long history of social challenges but at the same time, the democracy has sought to embrace everyone so that people don’t feel alienated,” the ambassador said. “Even though times are hard, the people very often live in hope.”

Jamaica has a population of about 2.6 million, and about that same number live outside the country. This huge diaspora has been an important economic and social factor for the country. Emigration, particularly to the United Kingdom, the United States and Canada, has been a safety valve, releasing pressure on the Jamaican economy to provide jobs. But many of those émigrés are returning with money to invest.

“Jamaica benefits from the fact that there are so many of our nationals in the diaspora because they send money home in the form of remittances, and some also take part in the investment projects,” he explained. “As a matter of fact, over the last month or so, there was a Diaspora Conference, which attracted at least 600 Jamaicans living overseas, and many of them came to talk business opportunities.”

Are visitors who never leave Jamaica’s large resorts missing something? Without a doubt, Ambassador Vasciannie believes.

“Jamaica is a place of remarkable cultural diversity,” he said. “We will surprise you with Shakespeare, we will give you the best beaches in the world, and we will give you the most exciting mountains in the world. As we say, once you go, you know.”

 

transcript

 

Chuck Conconi: Welcome to Focus Washington, I’m Chuck Conconi. My guest today is Ambassador Stephen Vasciannie. Ambassador, thank you for being here

Ambassador Vasciannie: Thank you for having me

Conconi: You come from a wonderful island in the Caribbean that’s had a long democracy, but you’ve had a number of serious economic problems and social problems. What are you doing to cure those?

Ambassador Vasciannie: Well, first of all, I should say that our economic problems stem largely from the fact that there is a high unemployment rate and from the fact also that the country tends to consume more than it produces, so what we are trying to do in government is raise the employment level and also open up the country to foreign investment so that we can raise production and productivity.

Conconi: Have you had any success in bringing in foreign investment?

Ambassador Vasciannie: Yes, we have had quite a bit of success. In recent years we have had, for instance, a number of Spanish hotels that have set up chains on the north coast to facilitate tourism; we have had Chinese investment in infrastructure and we have had United States investment in telecommunications. So we are trying to enhance all of those investment projects.

Conconi: Now, you received recently a significant amount of money from the International Monetary Fund. How is that being used?

Ambassador Vasciannie: Yes, that’s right. The IMF lent us $932 million, and we have also received assistance from Inter-American [Development] Bank and the World Bank. And these funds are being used for balance of payments support and also to shore up the Jamaican dollar. We anticipate that we will seek further loans and investments in order to get our growth sector going because these loans have been helpful to bring stability, but now we are looking towards enhancing production.

Conconi: Well, is there any area beyond tourism that you’re developing?

Ambassador Vasciannie: Yes, there are a number of other areas. One of them is what the government is calling “the logistics hub project”- and this is an idea that’s meant to take advantage of the expansion of the Panama Canal. Ships coming through the Panama Canal will be able to use Jamaica as a significant trans-shipment port. There are also possibilities in relation to the construction of a new airport, again to facilitate trans-shipment, and also the construction of a dry-dock harbor to repair ships. So this is one of the large, transformative projects that we have in mind.

Conconi: Now you have, obviously, some serious unemployment problems there, but also, the question of the diaspora always comes up in that there are more Jamaicans living outside the country than live in Jamaica. How is that affecting things?

Ambassador Vasciannie: Well, if you go back to the third generation, it’s roughly equal: 2.6 million within, 2.6 million without. Jamaica benefits from the fact that there are so many of our nationals in the diaspora because they send money home in the form of remittances, and some also take part in the investment projects. As a matter of fact, over the last month or so, there was a Diaspora Conference, which attracted at least 600 Jamaicans living overseas, and many of them came to talk business opportunities.

Conconi: So you’re not concerned about it. You have a very stable democracy; how does it stay so stable, why?

Ambassador Vasciannie: That is an important question. We have had a long history of social challenges, but at the same time, the democracy has sought to embrace everyone so that people don’t feel alienated. Even though times are hard, the people very often live in hope. Now, the fact of being able to migrate to Britain, the United States, and Canada has also helped because some of the pressures are exported, so to speak. We should say, though, that the country does have challenges with crime, and one of the things that the IMF arrangement safeguards is that the government will be able to spend money to ensure that there is a social safety net. Very few people will fall below that safety net; it’s a way of keeping the democracy alive.

Conconi: And a way of keeping the crime down.

Ambassador Vasciannie: Absolutely.

Conconi: Now, we’re sort of running out of time, but one of the questions I’d like to ask, which is the most obvious one, is tourism: Has there been a slump in tourism during the economic turndown?

Ambassador Vasciannie: No, there hasn’t been. It’s important to emphasize that we get tourists from a diverse range of places. And so while the there is pressure in North America, there might be less pressure in particular parts of Europe, and conversely, when there is pressure in particular parts of Europe, there is less pressure in North America. So we have been able to pull from many places and have, therefore, been able to keep tourism up.

Conconi: But most of the tourists who go there generally don’t get away from any of the resort areas. How do you encourage them to know the island and to know more about Jamaica?

Ambassador Vasciannie: Jamaica is a place of remarkable cultural diversity. We will surprise you with Shakespeare, we will give you the best beaches in the world, and we will give you the most exciting mountains in the world. So if you come, you can stay at a resort if you want, but you can also meet the Jamaican people and you will receive a very warm welcome. As we say, once you go, you know.

Conconi: I think with that, we’ll end. Thank you very much for being here.

Ambassador Vasciannie: Thank you.

Conconi: I’m Chuck Conconi, and this has been Focus Washington

 

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