Written by JamaicaObserver Posted On: Sunday, 05 August 2012 Last Updated: Sunday, 05 August 2012
FORMER Prime Minister PJ Patterson says the failure of the Golding administration to respond in a timely manner to the global economic recession, was the main factor that caused Jamaica to return to the International Monetary Fund (IMF).
In 1995, Patterson received much accolades when he announced that Jamaica was ending its borrowing relationship with the IMF.
"Goodbye, ta-ta, au revoir," Patterson said as he made the announcement to thousands of supporters attending a conference of the Peoples National Party (PNP).
In the 1970s, the PNP administration, then led by Michael Manley entered into a borrowing relationship with the IMF in a bid to rebound from the ravaging effects of the world oil crisis.
However, the imposition of strict loan conditionalities forced successive administrations to effect cost cutting measures which had devastating social consequences, including massive public sector job losses, wage freezes, the closure of some public institutions and a significant reduction in Government spending.
For many, the IMF's structural adjustment programme represented an albatross around the necks of Jamaicans.
However, in 2008 Jamaicans were stunned when they were informed that the Golding administration was engaged in efforts to resume a borrowing relationship with the fund. Through much public relations, the then administration sought to allay the fears of Jamaicans by suggesting that the IMF had changed its posture and was no longer a harsh institution.
The following year, then Finance Minister Audley Shaw completed negotiations which resulted in a 27-month standby agreement between Jamaica and the IMF.
But speaking at the weekly Jamaica Observer Monday Exchange, Patterson said he was disappointed with the move to return to the IMF.
"I believe when the signs were emerging of trouble in the international economy, which would have an adverse impact on Jamaica, we hesitated too long before taking appropriate action on the domestic scene, and as a consequence, by the time the size and the nature of the problems, and its impact on the Jamaican economy became evident we really had no recourse," said Patterson, who was providing an overview of Jamaica's progress and development since 1962.
"I can only say that I was disappointed in the extreme that we reached that point where the return of the IMF became inevitable," said Patterson.
Former Finance Minister, Shaw has previously been criticised as a result of his slow response to the global economic crisis.
In the early days of the recession, Shaw stated that Jamaica would not be hit by the recession, but could instead benefit from its effects.
However, in subsequent attempts at clarifying his position, Shaw said he had to take such a stance, as anything else would have created panic.