Approaching the International Monetary Fund (IMF) for emergency funding could result in stringent policy measures including widespread layoffs and cuts in government subsidies.
This is according to Finance Minister Colm Imbert, who made the comment in The Upper House on Friday, as he made his presentation during debate for government to receive an addition $3 billion in funding for the current financial year ending September.
Responding to senior economists who suggest the IMF as a suitable source of international funding during the pandemic, Minister Imbert said those making such recommendations to government, fail to mention the drastic policy measures that would follow.
“If we were to do that (go to the IMF), we would have to generate a fiscal surplus of about $5billion…That would mean that the government would be spending somewhere in the vicinity of $35billion, at most,” Imbert said in the Parliament.
He continued: “If we were to spend $35 billion, we would have to retrench about 30,000 people in the public service, we would have to remove all subsidies on water and electricity…We would have to devalue the currency.”
Imbert reaffired that government was unprepared to agree to such measures.
“We in this government have sought to do our own restructuring without the imposition of IMF conditionalities. All of the countries int he region that have gone to the IMF have had to reduce the size of the public service, remove all subsidies on government supplied goods and services and allow their exchange rate to float… So we are not going to do that- and it is irresponsible of people to say that is what we should do,” he said.