In the shadow of the 48th. Independence , Hon. Audley Shaw, Minister of Finance and Public Service was in Washington DC for a key signing event. He was in DC to sign a consolidation loan that will provide some additional breathing room to support an economic growth game plan for Jamaica.
“Private sector investment, earning our way, earning foreign exchange, producing runaway wealth, creating jobs, and creating prosperity in Jamaica must ultimately be the substitute for borrowing,” Minister of Finance and the Public Service Hon. Audley Shaw has argued.
He made the remarks on Tuesday, August 3, while signing an agreement in Washington, D.C., for the Jamaican government to receive a US$200 million loan from the Inter-American Development Bank (IDB) for its fiscal consolidation programme. President Luis Alberto Moreno signed for the hemispheric Bank, during a brief ceremony at the IDB’s headquarters.
Explaining the government’s emphasis on this fiscal consolidation programme, Minister Shaw said it “will contribute to:
The strengthening of fiscal discipline and accountability, Reduction of the public debt/GDP ratio, and
Stimulation of economic growth and development in the Jamaican economy.
He went on to stress that Jamaica will “have to get significant increments of new private sector investment into our economy,” in order to realize this substitution for borrowing.
The Finance and Public Service Minister, who was accompanied by Jamaica’s Ambassador to the United States Her Excellency Audrey Marks, acknowledged the tremendous support of the IDB along with the other multilateral partners such as the International Monetary Fund. This agreement represents the second of three that are planned, and will, at the end of the calendar year “represent an unprecedented level of support for a country of our size as measured in terms of support per capital GDP and per capita income.
“We want you to know we fully recognize the commitment that you have made, the statement of confidence that the IDB has made in the approach and work of the government of Jamaica,” the Minister told the IDB President.
For his part, Mr. Moreno noted that with this approval today, the IDB is sending “a signal not only that the Bank is there but also that we really think that the success of this programme is the success of the Jamaican people.” He emphasised: “This is about the future of the Jamaican people and this is what we have been working towards.”
The IDB President added that Jamaica has been a good fiscal track, and he used the opportunity of the signing to urge international investors to look at Jamaica as a good place in which to invest.
The funds from this latest IDB package brings loan approvals this year to more than US$400 million, in line with expected total approvals of around US$600 million in 2010. The IDB previously approved more than US$200 million to Jamaica this year in programs to support, among other areas, reforms in education, protection of human capital and competitiveness.
Disbursement of this fiscal policy loan, the first in a series of as many as three operations, is based upon fiscal measures taken by the government since the end of 2009 and during the first semester of 2010 to restructure public debt, increase revenue and control spending to meet the targets set out in its reform agenda, also supported by a stand-by agreement with the International Monetary Fund.
The second and third operations would aim to support the government’s efforts to undertake deeper, structural fiscal policy reforms in order to reduce the country’s debt burden and financing needs in the medium-term.
Under the fiscal consolidation program, the government of Jamaica will receive support in its efforts to achieve stable, sustained growth in a context of sound macroeconomic policy, and a consolidated fiscal balance, focusing on increasing tax revenue, streamlining expenditure and reforming the public sector. It will include a comprehensive debt management strategy that addresses the debt overhang, a strengthened fiscal responsibility framework, and increased customs efficiency.
We are indebted to Derrick Scott for this story content.
Contact: Derrick A. Scott
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