WASHINGTON, December 12, 2013- The World Bank Board of Directors approved today a $130 million Development Policy Loan with Jamaica which aims to promote economic stability, debt sustainability and improve competitiveness in Jamaica.
The global financial crisis exposed the fragility of the growth model in some Caribbean countries. Jamaica's progress on poverty and shared prosperity has been seriously undermined due in large part to economic shocks that are amplified by structural weaknesses in the economy.
The main results to be achieved are:
- An improved investment climate and competitiveness, facilitating higher and more productive private sector investment.
- Sound Public Financial Management through a pension reform, a more transparent tax regime and better planning and monitoring of all public investments.
“For over three decades, Jamaica’s economy has faced serious challenges to achieve sustained levels of economic growth. This has resulted in a continuing fragile economic environment with considerable underlying vulnerabilities and a high public debt level that imposes an enormous fiscal burden, said Peter D. Phillips, Jamaica Minister of Finance and Planning.
This Development Policy Loan is part of a package provided by the World Bank (WB), the International Monetary Fund (IMF) and Inter American Development Bank (IDB) to support a wide range of reforms initiated by the Government to build the foundations for growth and resilience.
"Through fundamental changes in fiscal and public sector management and competitiveness, Jamaica is taking critical steps to catalyze large investments and positive economic spillovers. These reforms are key to lay the foundations for higher growth in Jamaica, which is needed to achieve fiscal and debt sustainability, and create jobs and shared prosperity for its people,” said Sophie Sirtaine, Country Director for the Caribbean.
It will be followed by a series of programs under the new Country Partnership Strategy (CPS) with Jamaica and complemented by technical assistance provided by the Bank managed trust fund of the Department for International Development (DFID) from the United Kingdom and additional investments under preparation.
This loan, from the International Bank for Reconstruction and Development (IBRD) to Jamaica, has a final maturity of 29 years, with a 6 year grace period.