Jamaica needs a big brother to help reduce debt, says Byles
The Co-chair of the Economic Programme Oversight Committee, Richard Byles, says its time a big brother steps in to help Jamaica reduce its debt.
Byles says given Jamaica’s dedication to meeting the terms of its economic programme with the International Monetary Fund (IMF), it should be rewarded with help from countries such as the United States.
Byles was speaking against the background of a letter from five members of congress to US president Barack Obama, urging him to use his country’s influence to get the IMF to relax the terms of Jamaica’s economic programme.
Some US lawmakers want the IMF to lower the surplus target from the 7.5 per cent of GDP it has set as well as extend the maturity date for the IMF loan.
However, Byles says the debt is Jamaica’s own doing and changing the terms of the IMF programme is not the ideal solution.
He says what is needed now is external help to sustainably reduce the interest on the country’s debt.
Byles is suggesting that a way the US could help Jamaica is through a Brady Bond type of arrangement.
A Brady Bond is a US dollar-denominated bond issued by an emerging market, particularly those in Latin America, and collateralised by US.
Such bonds were attractive because they were backed by zero-coupon bonds and, therefore, repayment of the principal was insured.
Byles says against the background of happenings in Greece, Jamaica is a beacon for fiscal prudence and an arrangement like the Brady Bonds would help the country further reduce its debt.
Byles also says Jamaica needs exposure to investors in the United States in relation to local industries with potential for growth.