KINGSTON, Jamaica – President of the Inter-American Development Bank (IDB), Luis Moreno, arrived in Jamaica on January 18, to participate in the IDB’s Third Regional Forum on Violence Prevention and Citizen Security, as well as sign three loan agreements with the Government totaling US$329M, and engage officials of the administration in discussions regarding the Bank’s program in Jamaica.
The Third IDB Regional Forum on Violence Prevention and Citizen Security aims to strengthen the capacity among Caribbean nations, to design and implement violence prevention and citizen security programs.
The event, which will attract experts and policy makers from Latin America and the Caribbean, also seeks to promote a regional collaborative strategy among Caribbean countries in addressing insecurity more effectively through public policy, capacity building, and information sharing, among other approaches. Mr. Moreno will deliver opening remarks during the forum’s official opening ceremony, along with Prime Minister Bruce Golding, and National Security Minister for Trinidad and Tobago, Senator Martin Joseph, the Minister of National Security of Trinidad and Tobago.
In welcoming Mr. Moreno, Finance and Public Service Minister, Audley Shaw, who met the IDB official, on his arrival at the Norman Manley International Airport, said Jamaica was “gratified” at being the first Caribbean country with the “foresight” to engage the IDB and other multilaterals in providing credit to support the country’s economic reform and development programs.
“The IDB, through its current President has been most responsive, and this is a clear demonstration of the Bank’s confidence in the administration’s economic policies,” Mr. Shaw noted
Mr. Moreno, who is visiting the island for the second time in less than two years, noted that Jamaica’s request was timely, coming at a time when the global financial sector was in turmoil, with the credit market virtually frozen. This scenario, he pointed out, has resulted in large and small economies reeling from a credit crunch, depressed consumer demand, and a general slowdown of economic activity.
“The IDB, in response to Minister Shaw’s request is pleased to be of assistance. It has been a long time since the country has requested this level of intervention, and we have responded positively and will ensure the quick disbursement of the funds. In particular, we recognise the importance of liquidity during this period of intense volatility,” Mr. Moreno emphasized.
The US$329M loan agreements, which the IDB President will sign with the government, include: US$314.0 million is new funding, and US$15.0 million a re-allocation from an existing US$40M loan, which was made to the National Water Commission (NWC) for the Kingston Water and Sanitation Project
It also forms part of financing which the administration has negotiated with other multilateral funding agencies such as the Caribbean Development Bank (CDB), and the World Bank, to implement a number of programs.
In addition to US$329M, the government has secured a US$300 million agreement for the Liquidity Programme for Growth Sustainability, which represents part of the administration’s response to averting a serious fall-out in the productive sector as a result of the global financial meltdown. The loan aims to provide increased liquidity to the financial sector in order to maintain credit flows, which have been negatively impacted by the global financial crisis.
Finance and Public Service Minister, Audley Shaw, disclosed that the funds, which were negotiated on December 16, 2008, and were approved by the IDB’s Board on January 15, 2009, would be wholesaled through the Development Bank of Jamaica (DBJ) to Approved Financial Institutions (AFIs). “The Government appreciates the IDB’s successful efforts to prepare and approve the loan within a two-month period, thus ensuring that the resources can be made available as soon as possible,” he noted
A US$15M Social Protection Support loan, which the administration also secured for the Food Price Crisis Programme, is in response to a request made to the IDB in July 2008, for assistance in mitigating the adverse impact of food price increases on the poor.
These funds will be channelled via the Programme of Advancement through Health and Education (PATH), and will support of the Government’s decision to expand the PATH. The provision will also complement financing which the World Bank has committed for the PATH Programme.
The Finance Minister explained that the US$15 million was made available through a re-allocation from an existing loan with the National Water Commission (NWC). An Amendatory Contract to be signed by the IDB, Government, and the NWC, will effect the re-orientation of the funds to the Social Protection Programme. “The Bank must be congratulated for its creative approach in providing a loan to assist in widening the country’s social safety net, without increasing the debt stock,” Mr. Shaw said.
Finance and Public Service Minister, Audley Shaw (left), engages President of the Inter-American Development Bank (IDB), Luis Moreno, in brief discussions
A US$14.0 million Supplementary Loan has been provided for the Primary Education Support Project (PESP), and will bring total IDB financing for the initiative to US$43.0 million. Additional funding became necessary as a result of increases in attendant costs, and will ensure the completion of seven of the 12 schools identified for replacement, expansion, or construction under the project, thereby increasing the availability of student spaces and alleviating overcrowding.
The PESP has also been successful in improving the quality of the delivery of the revised primary school curriculum, through training of primary and tertiary level teachers. The project has also financed the development of a mentorship and literacy programme for Grades 1-3.
Multilateral loans negotiated during the 2008/09, which should amount to some US$963 million, include: US$501M secured late in 2008; US$100M to be signed in January; US$300M loan liquidity support for financial institutions, and a US$29M IDB Project loan, for which agreements will be signed during IDB President’s visit, and US$33M, to be signed with the Caribbean Development Bank (CDB) by February.
This unprecedented aggregate of funds represents a combination of project loans, policy-based; and development policy loans. It also reflects the growing confidence of the multilateral institutions in the government’s reform programmes.