Jamaica and the International Monetary Fund

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Jamaica joined the International Monetary Fund (IMF) in February 1963 [1] under the leadership of The Rt. Hon. Sir Alexander Bustamante, [2] one year after the country's independence. [3] From 1963 to 1966, Rt. Hon. Sir Donald Sangster served as Jamaica's governor to the IMF and World Bank, and represented Jamaica during delegations held at the IMF and World Bank's Washington D.C. headquarters. [4] In 1963, the IMF made its first loan to Jamaica ever, in the amount of 10 million SDR's. [5] In 1967, Sir Donald Sangster was elected as Jamaica's second Prime Minister, simultaneously serving as Minister of Finance and Minister of Defense. [6]

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Moreover, Jamaica played a pivotal role in hosting the 1976 IMF Interim Committee in Jamaica, during the IMF's changing role within the Bretton Woods system that, in 1944, had previously been established after World War II. [7] In a letter to President Ford, William E. Simon highlighted the major revisions of the Bretton Woods system that took effect as a result of the ratification of the Jamaica Accords. [8] The Jamaica Accords focus was to abolishment of the Gold Standard that the Bretton Woods System had previously established. [9] In order to create a more stable international monetary system, the Jamaica Accords served to create a more versatile foreign exchange rate that focused on a floating foreign exchange rate. [10] In addition to the abolishment of the Bretton Woods system, a secondary meeting was held in Jamaica that helped the Development Committee to refocus on developing countries financial problems within the International Monetary System. In conclusion, this meeting established the implementation of expanded access to IMF resources through a Trust Fund in order to create more support for developing countries. [11]

IMF SBA's and EFF's with Jamaica

Since its membership with the IMF, Jamaica has used the IMF resources consistently, and taken advantage of the availability of loans provided in order to help improve the standard of living, and economic stability of the country. [12] Jamaica and the IMF have entered into a total of sixteen arrangements. [13] In 1963, the IMF approved the first Stand-By Arrangement with Jamaica. [14] The total amount disbursed by the IMF stand-by arrangement was 10 million SDR's, which Jamaica could use if necessary, however; Jamaica did not use any money provided by the loan, and it expired in 1964. [15] In the following years, Jamaica entered into two additional stand-by arrangements, the first in 1973, and the second in 1977. [16] Under the leadership of Prime Minister Michael Norman Manely, who served two terms as prime minister (1972-1980, and 1989-1992) on a platform of democratic socialism. [17] The stand-by arrangement of 1973 was approved in the amount of 26,000 SDR's, and the second was approved in the amount of 64 million SDR's, of which; Jamaica only withdrew a total of 13.25 million SDR's, and 19.2 million SDR's respectively. [18] In June of the following year (1978), June 1979, and April 1981, Jamaica entered into three separate Extended Fund Facility (EFF) agreements, [19] which permitted Jamaica to repay its outstanding loan over a longer period of time due to economic factors that prevented the country from following the originally planned repayment plan. [20] These factors might include balance of payments imbalances due to conflicting structural procedures, or slow economic growth due to internal balance of payments weaknesses. EFF's allow a country to continue developing its internal structural integrity in order to strengthen economic growth without being too burdened by the costs of repayment. [21]

In 1984, Jamaica began a new stand-by arrangement [22] under the leadership of The Most Hon. Edward Phillip George Seaga who ran as the leader the Jamaican Labour Party in 1980, and won the seat as Jamaica's Prime Minister. [23]

Current (2018) Relations with IMF

As of 2018, Jamaica is joined in a constituency with Antigua, Barbuda, The Bahamas, Barbados, Belize, Canada, Dominica, Grenada, Ireland, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines. [24] Together, this IMF constituency has a total of 170,118 Special Drawing Rights (SDR's) votes and the percent total of the constituency fund amounts to 3.38%. [25] This constituency has been headed by Executive Director Louise Levonian from Canada, and Alternate Executive Director Anne Marie McKiernan from Ireland since mid-2018. [26] Jamaica, on the other hand has a total quota of 382.9 million SDR's and has 5,294 total SDR votes equivalent to 0.11% of the total vote. Furthermore, Jamaica has a potential claim, also known as a Special Drawing Rights, of 155.55 million SDR's available for immediate withdrawal without conditionality. [27] Up until December 2018, Jamaica has increased its quota reserves eleven times throughout its membership with the IMF. Jamaica's initial quota was in the amount of US$20,000, which was allocated to the IMF in February 1963. Subsequently, Jamaica has increased its quota shares in 1966 (twice),and again in 1969, 1970, 1978, 1980, 1984, 1992, 1999, and in 2016. As of today, Jamaica has an outstanding (unpaid) loan in the amount of 528.78 million SDR's. [28]

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<span class="mw-page-title-main">International Monetary Fund</span> International financial institution

The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 190 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of last resort to national governments, and a leading supporter of exchange-rate stability. Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world." Established on December 27, 1945 at the Bretton Woods Conference, primarily according to the ideas of Harry Dexter White and John Maynard Keynes, it started with 29 member countries and the goal of reconstructing the international monetary system after World War II. It now plays a central role in the management of balance of payments difficulties and international financial crises. Through a quota system, countries contribute funds to a pool from which countries can borrow if they experience balance of payments problems. As of 2016, the fund had SDR 477 billion.

Special drawing rights are supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). SDRs are units of account for the IMF, and not a currency per se. They represent a claim to currency held by IMF member countries for which they may be exchanged. SDRs were created in 1969 to supplement a shortfall of preferred foreign exchange reserve assets, namely gold and U.S. dollars. The ISO 4217 currency code for special drawing rights is XDR and the numeric code is 960.

<span class="mw-page-title-main">Bretton Woods system</span> Financial-economic agreement reached in 1944

The Bretton Woods system of monetary management established the rules for commercial relations among the United States, Canada, Western European countries, and Australia among 44 other countries after the 1944 Bretton Woods Agreement. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent states. The Bretton Woods system required countries to guarantee convertibility of their currencies into U.S. dollars to within 1% of fixed parity rates, with the dollar convertible to gold bullion for foreign governments and central banks at US$35 per troy ounce of fine gold. It also envisioned greater cooperation among countries in order to prevent future competitive devaluations, and thus established the International Monetary Fund (IMF) to monitor exchange rates and lend reserve currencies to nations with balance of payments deficits.

In 1945, China cofounded the International Monetary Fund (IMF) with 34 other nations. China was initially represented by the Republic of China. In April 1980, representation transferred to the People's Republic of China. The Chinese-IMF relationship mainly operates around affairs associated with IMF governance and the IMF Special Drawing Rights (SDR).

Tanzania is a member of the International Monetary Fund (IMF) with a current quota of US$551.35 million, and is a part of the South Africa and Nigeria led constituency with a totaling voting share of 2.97%. The IMF has been involved in Tanzania's economy since the 1970s. Over the years, there have been roughly three stages of the IMF's involvement in Tanzania: the first round of reform lasted from 1986 to 1995, the second round of reform lasted from 1996 to 2006, and the third round focused mainly on consolidating the reforms made from previous stages.

El Salvador has been a member of the International Monetary Fund (IMF) since 1946. Their quota currently consists of 287.20 million SDR. The country has received loans from the IMF in the past, but most recently has received only standby loans and currently has no outstanding payments. As of June 2017, the standby arrangements total 1,442,300 SDR while the government has only drawn upon 132,250 SDR.

The International Monetary Fund (IMF) has operated in Malawi since 1965.

Vietnam joined the International Monetary Fund (IMF) on September 21, 1956, under the policy of Article VIII. Their quota contributes an estimated SDR of 1,153 millions and voting power of 0.24%. As of August 2016, the current IMF Resident Representative to Vietnam is Jonathan Dunn.

Iceland joined the International Monetary Fund on Dec 27th 1945, becoming one of the IMF's founding members. As a part of the IMF, Iceland has rights in accordance with its contributions, borrowing rights which help facilitate the stability of global financial markets. Iceland's quota is 321.8 million SDR, and its Special Drawing Rights are 112 million. This is a relatively small quota and its vote share comprises only 0.09% of all IMF vote shares, or 4,683 votes to be exact.

<span class="mw-page-title-main">Poland and the International Monetary Fund</span> Overview of the relationship between Poland and the International Monetary Fund

Poland was one of the founding members of the International Monetary Fund (IMF) in 1945. Under pressure from the Soviet Union, the country withdrew in 1950, believing that the organization had become a tool for the United States. Poland rejoined the IMF in 1986, following the end of martial law in Poland (1981–1983) and the withdrawal of the US veto against Polish membership.

<span class="mw-page-title-main">Democratic Republic of the Congo and the International Monetary Fund</span>

The Democratic Republic of Congo (DRC) joined the International Monetary Fund (IMF) on September 28, 1963.

<span class="mw-page-title-main">Belarus and the International Monetary Fund</span>

The Republic of Belarus became a member of the International Monetary Fund on July 10, 1992 and has since taken out a significant amount of loans to stabilize their economy, balance of payments and hyperinflation. Belarus IMF quota is 681.5 millions of special drawing rights (SDR), 0.14% of IMF total. They have 8,280 number of votes, which independently gives them a .16% voting share. Pavel Kallaur currently holds the board of Governor seat. When it comes to voting power Belarus is grouped in the constituency system consisting of Austria, Czech Republic, Hungary, Kosovo, Slovak Republic, Slovenia, and Turkey- together they have 162,344 total votes with 3.23% percent of fund total. Raci Kaya is currently the Board of Governor for the constituency system.

Greece is one of the original members of the International Monetary Fund, joining it on December 27, 1945. It has a quota of 2,428.90 million SDRs and 25,754 votes, 0.51% of the total IMF quota and votes. Greece has been represented on the IMF Board of Governors by Minister of Finance Christos Staikouras since 2019. Greece elects an Executive Director on the fund's Executive Board with Albania, Italy, Malta, Portugal and San Marino. Michail Psalidopoulos is the elected alternate director. Greece has signed two loan agreements with the IMF: a Stand-By Arrangement from 2010 to 2012 and an agreement under the Extended Fund Facility from 2012 to 2016, borrowing a total of 27,766.3 million SDR. Greece owes the IMF 6,735.64 million SDR, and is the fund's third-largest borrower. In 2018, the fund began conducting annual post-program monitoring of Greece in addition to its annual Article IV consultation.

<span class="mw-page-title-main">Bosnia and Herzegovina and the International Monetary Fund</span>

Bosnia and Herzegovina declared independence from the state formerly known as Yugoslavia in 1992 and joined the International Monetary Fund (IMF) on December 14, 1992. Bosnia and Herzegovina officially succeeded to the IMF membership of the former Yugoslavia on December 20, 1995, thereby giving the country access to the quota, as well as outstanding loans and payments, on behalf of Yugoslavia. Bosnia and Herzegovina, often synecdochically referred to as Bosnia, currently has an IMF quota of 265.20 million SDR. Bosnia is part of the constituency that contains primarily Eastern European countries but is led by the Netherlands and Belgium. Bosnia controls 4,117 votes of the constituencies 273,058 total votes, and the constituency overall accounts for 5.43% of the IMF's total votes. Since Bosnia joined the IMF in 1992, the country has utilized five borrowing arrangements, four of which were under the Stand-By Arrangements (SBA) and one of which was under the Extended Fund Facility (EFF). The first of the five arrangements was enacted in May 1998 and the most recent was enacted in September 2016. As of September 2019, Bosnia has 126.82 million SDR outstanding loans and/or purchases from the IMF.

Jamaica first joined The World Bank Group (WBG) on the 21st of February, 1963, when the island nation became a member of The International Bank for Reconstruction and Development (IBRD), which lends to middle and low income nations. This occurred the same month as Jamaica joining the International Monetary Fund (IMF), and one year after declaring political independence. Since joining The World Bank, Jamaica has received in excess of $3 billion US Dollars in loans and grants. Jamaican Minister of Finance, Donald Sangster, led the Jamaican delegations to World Bank and International monetary Fund meetings between 1963 and 1966, while also serving as Governor of the World Bank and IMF. Sangster would go on to serve briefly as the Prime Minister of Jamaica.

<span class="mw-page-title-main">Ivory Coast and the International Monetary Fund</span>

With the world’s largest production of cacao and cashew nuts, Ivory Coast is one of the leading economic powers in West Africa. It joined the IMF in 1963. Since then, Ivory Coast participated in 14 arrangements and purchased more than 1016 millions in procurement and loans. It now possesses 650.4 million SDR of quotas.

<span class="mw-page-title-main">Myanmar and the International Monetary Fund</span>

Myanmar, officially joined the International Monetary Fund (IMF) as of January 3, 1952; shortly before the end of term for the Union of Myanmar's first President, Sao Shwe Thaik, and the induction of Ba U. Since the induction of Myanmar as a member of the institution, they have made six arrangements with the IMF with its most recent arrangement made in 1981. As of 2019, they are currently led by Kyaw Kyaw Maung and Alternate U Soe Thein; their Special Drawing Rights (SDR) is at 0.79 million and quota consists of $516.8 million SDR which is 0.11% of the total IMF funds available. As of 2019, the country is under one of the twenty-four Executive Boards that facilitates the day-to-day operations of the IMF, led by Alisara Mahasandana and Alternate Keng Heng Tan; their co-board members consist of Brunei Darussalam, Cambodia, Republic of Fiji, Indonesia, Laos, Malaysia, Nepal, Philippines, Singapore, Thailand, Tonga, and Vietnam. The Executive Board accumulates around 218,545 total votes which account for 4.34% of the Fund's total, Myanmar allocates 6,633 of the votes.

Iran and the International Monetary Fund have been in partnership since 1945. Iran has gone to the IMF on only two occasions, both before the 1979 revolution of Iran.

<span class="mw-page-title-main">Iraq and the International Monetary Fund</span> Relation between Iraq and the International Monetary Fund, an international organisation

Iraq was one of the original members of the IMF, joining the IMF on December 27, 1945. Iraq provided $1663.89 million SDR, Special Drawing Rights, to the IMF, which is 0.35% of total SDR paid to the IMF. It also has 18,103 votes, which is 0.36% of the total votes distributed to the member countries of the IMF. The current Board of Governor of Iraq is Ali Muhsin Ismail with an alternative Board of Governor, Khaled Salah Alddin Mohammed Murad. Iraq is the part of the constituency with other countries such as Bahrain, Egypt, Jordan, Kuwait, Lebanon, Maldives, Oman, Qatar, United Arab Emirates, and Republic of Yemen. This constituency has 127,164 votes, 2.53% of total votes in the IMF. Since first joined, Iraq faced 4 official arrangements from the IMF: first arrangement on December 23, 2005, and the latest arrangement on July 7, 2016.

<span class="mw-page-title-main">Sri Lanka and the International Monetary Fund</span>

Sri Lanka joined the International Monetary Fund on August 29, 1950. Since June 1965, Sri Lanka has taken 16 loans from the IMF, with a total value of 3,586,000,000 SDR's. The most recent of these loans was agreed to in June 2016, with an agreed total of 1,070,780 SDR's, and 715,230,000 SDR's being withdrawn. Of this total, 715,230,000 SDR's remain outstanding. Notwithstanding the receipt of substantial soft loans from China, the island nation of Sri Lanka finds itself ensnared in a foreign currency crisis, prompting concerns among experts that it may be driven towards default. The current year places a heavy burden on Sri Lanka, with debt repayments amounting to approximately $4.5 billion, commencing with an initial payment of $500 million towards an international sovereign bond. It is worth noting that Sri Lanka holds a position of significant importance in China's ambitious Belt and Road Initiative.

References

  1. ↑ "Jamaica and the IMF". IMF.
  2. ↑ "Alexander bustamante - The National Library of Jamaica". The National Library of Jamaica.
  3. ↑ "Central America :: Jamaica — The World Factbook - Central Intelligence Agency". www.cia.gov. 20 July 2022.
  4. ↑ "The Rt. Hon. Sir Donald Sangster (1911 - 1967) - The National Library of Jamaica". The National Library of Jamaica. Retrieved 2018-12-01.
  5. ↑ "History of Lending Arrangements:Jamaica". www.imf.org.
  6. ↑ "The Rt. Hon. Sir Donald Sangster (1911 - 1967) - The National Library of Jamaica". The National Library of Jamaica.
  7. ↑ "Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976 - Office of the Historian". history.state.gov.
  8. ↑ "Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976 - Office of the Historian". history.state.gov.
  9. ↑ "Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976 - Office of the Historian". history.state.gov.
  10. ↑ Halm, George N. "Jamaica and the Par-Value System" (PDF). www.princeton.edu. Archived from the original (PDF) on 2017-06-18. Retrieved 2018-12-14.
  11. ↑ "Foreign Relations of the United States, 1969–1976, Volume XXXI, Foreign Economic Policy, 1973–1976 - Office of the Historian". history.state.gov.
  12. ↑ "IMF Videos - IMF Managing Director Christine Lagarde and Jamaica's Prime Minister Andrew Holness press conference". www.imf.org.
  13. ↑ "Jamaica and the IMF". IMF.
  14. ↑ "Jamaica And The IMF —". diGJamaica. 9 January 2013.
  15. ↑ "Jamaica And The IMF —". diGJamaica. 9 January 2013.
  16. ↑ "Jamaica And The IMF —". diGJamaica. 9 January 2013.
  17. ↑ "Michael Norman Manley Facts". biography.yourdictionary.com.
  18. ↑ "History of Lending Arrangements:Jamaica". www.imf.org.
  19. ↑ "History of Lending Arrangements:Jamaica". www.imf.org.
  20. ↑ "IMF Extended Fund Facility (EFF)". IMF.
  21. ↑ "IMF Extended Fund Facility (EFF)". IMF.
  22. ↑ "History of Lending Arrangements: Jamaica". www.imf.org.
  23. ↑ "The Most Hon. Edward Phillip George Seaga, ON, P.C., LL.D. (Hon.) (1930 - ) - The National Library of Jamaica". The National Library of Jamaica.
  24. ↑ "IMF Executive Directors and Voting Power". www.imf.org.
  25. ↑ "IMF Executive Directors and Voting Power". www.imf.org.
  26. ↑ "IMF Executive Directors and Voting Power". www.imf.org.
  27. ↑ "Jamaica and the IMF". IMF.
  28. ↑ "IMF Members' Quotas and Voting Power, and IMF Board of Governors". www.imf.org.
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