Jamaica cuts ties with IMF
Kingston, Jamaica — Jamaica's economic dilemmas were heightened this week with Prime Minister Michael Manley's decision to sever the island's ties with the International Monetary Fund (IMF).
Monitor Latin America correspondent James Nelson Goodsell writes that the move ends the three-year IMF effort to help Jamaica out of its economic problems , which involve a staggering foreign deficit and an excess of expenses over income. The IMF offered standby credits in return for strict budgeting by the Manley government.
The relationship between the IMF and the Manley government was an uneasy one, but it seemed to work for a time. Fresh talks between the international agency and the government were begun in December on an additional $175 million IMF credit package. It looked as if Mr. Manley was about to embark on a broad budget-cutting effort, involving civil-service layoffs, to secure the IMF help
But as budget restraints became more severe, government employees and members of Mr. Manley's People's National Party began demanding that the prime minister end the talks with the IMF. At first, Mr. Manley seemed to resist, partly on the advice of Finance Minister Eric Bell, but finally he gave in.