Jamaica Signs Multi-Million Dollar Loans with Inter-American Development Bank (IDB)

WASHINGTON, DC – Jamaica’s Minister of Finance and the Public Service, Audley Shaw, Friday(December 5), signed three loan agreements, totaling US$101 million, with the Inter-American Development Bank (IDB), in Washington.

Two of the loans are policy-based, amounting to some US$90 million, while the other is a direct loan of US$11 million.

The larger of the two policy-based loans amounts to US$60 million, and is dedicated to the Public Financial and Performance Management Program, which supports the Government’s reform efforts to increase efficiency in public expenditure, and improve performance management within the public sector. The Ministry of Finance and the Public Service will administer the Program.

The other policy-based loan facility of US$30 million will be used to support the education transformation process, including both the institutional and policy changes, deemed necessary to improve the quality of services provided and to increase the efficiency and accountability of the education system.

Minister of Finance and the Public Service, Audley Shaw (second left), exchanges loan documents with Executive Vice President of the Inter-American Development Bank (IDB), Doniel Zelikow, following the signing of three loan agreements. At left is Alternate Executive Director for the Caribbean at the IDB, Dr. Richard Bernal.
The US$11 million loan will fund the initial phase of the Government’s Youth Development Programme, to facilitate the transition of unattached youth to adulthood, and the world of work, through training, on-the-job experience and information dissemination.

Since September 2007, the Government has secured some US$401 million from the multilateral development banks, including the agreements signed today.

Minister Shaw disclosed that, “by February 2009, significant additional flows are expected from the World Bank and the Caribbean Development Bank which, when combined with a possible US$300 million liquidity support program for commercial banks, will see a total inflow of approximately US$950 million by the end of this fiscal year.”

Executive Vice President of the Inter-American Development Bank (IDB), Doniel Zelikow (left), engages Minister of Finance and the Public Service, Audley Shaw, in a discussion, prior to the signing of three loans with the IDB, valued at US$101 million, at the headquarters of the IDB, in Washington, D.C., on December 5. At right is Director General of the Planning Institute of Jamaica, Dr. Wesley Hughes.
He noted that this would represent an unprecedented level of inflows of foreign exchange loans, at low interest rates. “This development is due to the aggressive policy of re-engagement with the Multilaterals, which has been a hallmark of the thrust of this new administration. Significantly increased access to financing from the multi-laterals makes imminent sense, since their lending rates are considerably lower and more stable than the commercial markets,” the Minister said.

“Since loans from these agencies are largely policy-based, the challenge is to harmonize our domestic policies, especially dealing with fiscal and administrative reforms, with the lending policies of these agencies. This is not a difficult exercise, because there is a convergence of policies, given this Government’s commitment to good governance,” he explained. (JIS)