Jamaica is being urged to take the lead in mobilising countries of the south to re-negotiate debt relief with the International Monetary Fund (IMF) and other lending agencies as part of a global response to fast-track recovery arising from the devastating effects of the coronavirus (COVID-19) pandemic on the labour market.
In making out a case of debt relief from these multilateral lending agencies, Senior Lecturer and Head of the Hugh Shearer Labour Studies Institute at the UWI Open Campus, Danny Roberts declared that such a move would prove to be a much better option for Jamaica than the withdrawal of the $57 billion from the National Housing Trust to help cushion the economic fallout from the coronavirus pandemic.
Speaking at the annual Labour Market Forum hosted last week by the Planning Institute of Jamaica, Roberts argued that Jamaica’s debt to the IMF, which now stands at over US$750 million could be forgiven in part. Roberts said this can be done under the criteria established by the IMF’s Catastrophe Containment and Relief Trust, noting that Jamaica would not qualify for debt relief based on the level of its per capita income.
Debt to GDP ratio should be used as the qualifying criterion
However, the veteran trade unionists now University lecturer, contended that the conditions should be different under the Covid pandemic, which Jamaica could draw on a country’s debt to Gross Domestic Product ratio, which should be used as the qualifying criterion.
According to Roberts, “Millions of dollars could be made available through debt relief for spending on social programmes and used to effect structural changes to assist the disadvantaged or redress distributional inequity in the economy.”
He added that with strong social measures the reform of Jamaica’s labour laws must be a top priority to provide for stronger employment policies and institutions, better resourced and comprehensive social protection systems, and the use of international labour standards to provide the framework for sustained and inclusive economic growth.
Roberts referred to a report of the International Labour Organisation, which shows, “Countries like Jamaica with its heavy dependency on the service sector, high levels of informality and weak safeguards against termination of employment, will find the post-Covid recovery period much more prolonged and in danger of widening the income inequality.”
In addition to labour reform and social programmes, Roberts pointed to the need to focus on productivity improvements, soft skills development and social dialogue, as they are important tools in preparing the country for full recovery.