Phillips gave the assurance in Parliament, but did so only after Opposition spokesman on finance Audley Shaw insisted that he “make an unambiguous statement” in response to Prime Minister Portia Simpson Miller’s statement in an interview with Bloomberg news service.
Bloomberg had reported Simpson Miller as saying that if Jamaica could get a bailout like Greece, the island would prosper.
“If they could give a bailout like Greece, lord have mercy, you would see Jamaica grow and flourish,” Simpson Miller was quoted as saying. “The European countries got together and tried to do something so that they can give some serious aid to Greece. We know we would never be able to get the same level as Greece, but if we could get some consideration from countries or the IMF, we would be on our way.”
Her reference was to last month’s agreement by Eurozone finance ministers for a euro130-billion (US$172-billion) rescue package for Greece to ward off impending financial doom. The intricate deal bought much-needed time for the 17-nation currency bloc to be stabilised and strengthen its financial systems.
Bloomberg had interviewed Simpson Miller at the Jamaica Investment Forum in Montego Bay last week. The story created controversy for the Government, especially for the fact that the headline stated: ‘Jamaica seeks Greek-style bailout to boost growth’.
However, with reports swirling that the statement could trigger panic in the bond market, Information Minister Sandrea Falconer denied that the prime minister had said that Jamaica was seeking a Greekstyle bailout. Falconer also denied that Simpson Miller had — as was reported by Bloomberg — stated that the Jamaica Debt Exchange (JDX), implemented by the previous Government, was not successful.
Bloomberg has since corrected the portion about the JDX, but has kept the original headline of the story.
Yesterday, Shaw, during a debate on the Second Supplementary Estimates of Expenditure, said it was interesting that Phillips had not commented on the controversy although it was announced by the information minister that a statement would be made by the finance minister.
He said in that context “it would be very important for the minister of finance to disassociate himself from the suggestion that Jamaica is looking at a Greek-style bailout”.
Added Shaw: “While I am very grateful that Bloomberg has in fact corrected the misinformation concerning the success of the Jamaica Debt Exchange, at the same time, while it has made that correction it has been strident on the issue of the statement by the leader. I think that for purposes of stability, it is important that the minister of finance, in his capacity, must make a statement concerning the utterances of the prime minister”.
Phillips, in responding, emphasised that the country had no leanings in that direction.
“We intend to honour our debt, both internal and external,” he said. “We will maintain our obligations that we have entered into with respect to all our creditors.”
Shaw, in prefacing his remarks, had urged the Government to craft a management programme for the external debt using the principle of the successfully concluded JDX which, he said, will remove any talk of need for a Greek-style bailout. According to the former finance minister, his administration had left the country a legacy from the JDX which significantly reduced interest rates.
“While we have had a successful debt exchange in terms of the stock of domestic debt in Jamaica, which has been the significant driver behind the lowering of interest rates… the truth also is we eventually must look to a liability management programme on the external side, which is frightening, and if we do that the truth is that we will never have to have any speculation from any quarter about a Greek-style bailout,” Shaw said.