BASSETERRE, St. Kitts – IN the wake of the international economic and financial crisis and the stark effects it has been having on the economies of the region, a number of countries have looked toward the International Monetary Fund (IMF) for relief, a move the federal government may consider in the near future.
In an interview with SKNVibes, Minister of Finance Hon. Dr. Timothy Harris explained that there are possibilities for the Federation to borrow from the IMF because it is among member countries that subscribe to the international body for financial assistance. He said that representatives from the IMF often visit the nation to assess its financial and economic situation and give recommendations in terms of fiscal performance and the way forward. Harris added that with such a close relationship, “there is the option for St. Kitts-Nevis to engage them [IMF] in terms of whether or not we want such assistance”.
“In the past we have shied away from borrowing from the IMF as it has been stringent and cumbersome for developing countries to receive such funds. However, I know some time ago, closer to home, Dominica has made successful strides in that regard and received some assistance. So, I think although the medicine may be harsh, it may be the right thing and so we must try to strike a balance.
“We have not gone that route [like Dominica] as we do not believe that it was ideal for us; we should develop our own self-imposed posterity plan to pursue fiscal discipline in a measure that the IMF would want. Of course, we have not always had that kind of success. What we must acknowledge though is that the IMF stands ready to help Member States and in this context of the financial downturn, the need for aid has grown even more.”
Dr. Harris informed that during the 18th Meeting of the IMF Committee the international body indicated that it was making funding facilities available by application to countries of the region noting that it is an opportunity that the government may consider to engage the IMF on.
“These are special funding facilities outside the usual loan context and they offer very concessional terms. The IMF has always been concerned about the levels of national debt, and so any programme that we engage in with the IMF would be such that it does not exacerbate an already bad debt situation,” Harris said.
The IMF is a global institution which focuses on monitoring economic and financial developments and the provision of policy advice and is aimed especially at crisis-prevention. It lends to countries with balance of payments difficulties, to provide temporary financing and to support policies aimed at correcting the underlying problems. The organization also provides countries with technical assistance and training in its areas of expertise.
