Financial institutions welcome IMF statement on Jamaica

The World Bank and the Inter-American Development Bank (IDB) have welcomed the decision by the International Monetary Fund (IMF) that it could approve an US$958 million External Fund Facility (RFF) for Jamaica by the end of this month.

“This is an important reflection of that institution's confidence in Jamaica's macroeconomic stabilization programme,” said the Washington-based financial institutions in a joint statement issued here on Monday.

“Jamaica has taken the bold decision to tackle the structural impediments to growth that have hindered its development for decades,” they added.

The IMF said Monday that the 48 month arrangement would be discussed at its executive board meeting expected to take place by the end of April.

It said that since the conclusion of a staff-level agreement with the Jamaican authorities in February on an economic programme, the Portia Simpson Miller administration has “submitted documentation to the IMF to confirm that all prior actions have been met”.

The IMF said it welcomed the progress that has been made in the implementation of the programme thus far including the authorities’ efforts to complete the prior actions and structural benchmarks, and on the assembling of a financing package.

“On the basis of this progress, Fund management will submit to its Executive Board a 48-month arrangement under the Extended Fund Facility (EFF) in the amount of SDR 615 million (about $958 million, or 225 percent of quota), with the recommendation that it be approved. It is expected that the Board meeting would take place by the end of April.”

In February, the IMF announced that it had reached a “staff-level agreement” with Jamaica on the key elements of an economic programme that can be supported by US$750 million four year arrangement under the EFF.

The World Bank and the IDB said, pending approval by their respective boards of directors, they have each preliminarily allocated US$510 million in financing over the next four years to Jamaica, supplementing the support provided by the IMF.

The World Bank said it has recently started a series of consultations with Jamaican authorities on a new Country Partnership Strategy (CPS), which will be launched later this year.

It said the new CPS will be designed to support the country as it looks to increase economic growth, create jobs and fight poverty.

Since the global financial crisis hit Jamaica in 2008/09, the World Bank said it and its private sector arm, the International Finance Corporation (IFC), have provided more than US$800 million to Jamaica for social, human development and fiscal management projects, as well as natural disasters risk management and private sector development.

The IDB also said that it has “long been committed to its partnership with Jamaica,” stating that since the onset of the international financial and economic downturn in 2008, it has approved US$1.6 billion in loans and US$10.4 million in non-reimbursable technical assistance to the Caribbean island.

In addition to social development, agriculture and infrastructure, the IDB said part of this envelope also contributed to a “coordinated, multilateral support program for macroeconomic stabilization” in Jamaica.

The IDB and the World Bank said they are “expediting implementation of important ongoing projects that will improve growth, protect Jamaica’s most vulnerable and increase fiscal stability.

“The IDB and the World Bank share the high priority assigned by the government to restoring macroeconomic stability and recognize the significant steps already taken to achieve this,” the statement said, adding “the two multilateral institutions stand ready to accompany the government?s efforts to bring about sustained growth to the benefit of all its citizens”.