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The Economic Programme Oversight Committee, EPOC will continue to operate after Jamaica’s programme with the International Monetary Fund (IMF) ends in November 2019. That is the word from the Minister of Finance and the Public Service, Dr. Nigel Clarke recently. The work of EPOC was supposed to end at the same time the three-year Precautionary Stand-By Arrangement (PSBA) with the IMF terminates in November.
The Finance Minister and the Chairman of EPOC, Keith Duncan, on August 22, 2019, signed a Memorandum of Understanding (MOU) at the Finance Ministry that will see EPOC operating beyond 2019. The President of the Private Sector Organisation of Jamaica, Howard Mitchell was among other signatories to this MOU.
Under this MOU, EPOC will continue to monitor Jamaica’s economic reforms after the current arrangement with the IMF expires. EPOC’s work will continue until the Government of Jamaica establishes the Fiscal Council and puts in place the institutional framework that enables the Bank of Jamaica to become an independent monetary entity. The Cabinet already approved the creation of the independent Fiscal Council.
The independent Fiscal Council will be a permanent institution established by law to promote fiscal policies that are economically sustainable. Such policies would transcend partisan considerations. Government’s extension of EPOC is also part of its agreement with the IMF to keep its office operating for another two years once the Precautionary Stand-By Arrangement ends in November.
Legal Arrangements to be made for Fiscal Council and BOJ
In his address to the audience at the signing ceremony, Minister Clarke stated that “the government is far advanced in enacting legislation to modernise the Bank of Jamaica, inclusive of the institutionalising independence in the implementation of monetary policy. We are working to table legislation by April 2020 to implement the Fiscal Council that will strengthen Jamaica’s fiscal responsible framework and be an independent arbiter of Jamaica’s fiscal rules.”
He further emphasised that the government is “committed to empowering EPOC to continue in a monitoring role until our central bank and Fiscal Council policy commitments are operationalised.” Jamaica is far advanced in its steps to complete the Precautionary Stand-By Arrangement with the IMF. This achievement marks another success as the country had brought the previous IMF Extended Fund Facility arrangement to a successful early end in November 2016.
Legislation to be tabled, April 2020
Jamaica’s approximately six-and-a-half-years of collaborating with the IMF has been described as successful. The Finance Minister indicated that Jamaica’s macroeconomic achievements have been recognised around the world as a success story. He attributed the success to the effort and sacrifice that the people of Jamaica made throughout the six and a half years. “..we owe it to the Jamaican people to preserve and build on these gains even as we work to address the other important challenges.” He said.
While the Finance Minister was not able to indicate the expected duration of EPOC’s extension, he explained that the duration depends on Parliament approval of the legislative arrangements for the fiscal council and enabling the independence of the central bank. He indicated, however, that the tabling of the legislative arrangements will occur by April 2020.
EPOC Monitoring Continues
Meanwhile, Keith Duncan expressed his pleasure in serving in this interim period. He promised to keep the public abreast on the government’s economic reform programme. He declared that EPOC will communicate any concerns with the economic reform programme to the Jamaican public, as it has been doing since it was established in 2013.
Among the items on EPOC’s agenda is its focus on Jamaica achieving its fiscal rules including a 60 percent debt to Gross Domestic Product (GDP) ratio by 2025/2026. Jamaica is already seeing the benefits of the GoJ’s fiscal responsibility programme and EPOC’s chairman expressed confidence that the country will continue along this fiscal discipline path.
EPOC is made up of 11 representatives from the private and public sectors and civil society. This group receives and assesses information from the Government of Jamaica (GOJ) to track Jamaica’s progress against the agreed targets outlined in the 2016 PSBA with the IMF.
It monitors the monetary, fiscal, and financial sector indicators agreed under the standby agreement. Through these targets, the GOJ expects to maintain the macroeconomic stability that was achieved under the previous agreement with the IMF. Jamaica’s renewed focus is on growth and job creation as well as the maintenance of fiscal responsibility.
The EPOC committee meets quarterly for monitoring based on the quarterly targets and the semi-annual IMF reviews. A technical sub-committee also meets monthly to carry out ongoing analysis of the Precautionary Stand-By Arrangement.