The strategy lays the foundation for growth and shared prosperity
KINGSTON, Jamaica, April 29, 2014 – The World Bank Group’s Board of Executive Directors endorsed today the new Country Partnership Strategy (CPS) for Jamaica for 2014-2017. It focuses on creating the conditions for growth and prosperity for all Jamaicans.
The strategy proposes a lending program of $510 million over the next four years, which is part of a comprehensive and ambitious package of reforms led by the Government of Jamaica with the support of the international community including the International Monetary Fund’s (IMF) Extended Fund Facility and the Inter-American Development Bank’s (IDB) program.
As the Government is discussing the budget, Minister of Finance, Dr. Peter Phillips said, “We must grow our way out of the very precarious position we find ourselves in. The first requirement of the growth agenda is commitment to the current economic reforms. This agreement signifies our intention to stay the course, buoyed by the support from international development partners such as the World Bank Group.”
Jamaica was hit hard by the global crisis and rise of food and energy prices. Poverty has increased from under 10 percent in 2007 to more than 17 percent in 2010, and unemployment is around 15 percent, with 30 percent youth unemployment.
“For the past two decades, Jamaica has been trapped in a cycle of low growth, high debt, and limited fiscal space”, said Sophie Sirtaine, World Bank Country Director for the Caribbean. “The reforms adopted by the government have started restoring confidence in the Jamaican economy. This new strategy is about changing the growth trajectory of Jamaica and boosting competitiveness and private sector development. It also comes with support in scaling up successful programs in social protection, early childhood development and community development,” she added.
Guided by the priorities of the government’s National Development Plan “Vision 2030 Jamaica”, the World Bank Group’s three key areas of support are:
- Modernizing the public sector by strengthening the government capacity and effectiveness. New activities will focus on the implementation of a new Debt Law and will support the reform of the public pension system and the Public Sector Investment Program. It will improve customs administration and standardization of the Kingston port and continue to support Public Private Partnerships in energy, transport, waste water treatment and education.
- Creating an enabling environment for private sector growth by fostering investments in high potential sectors, such as logistics and agriculture. The strategy is expected to help reduce the time needed for an entrepreneur to register a new business, obtain a construction permit and pay taxes. It will also provide digital training opportunities for the youth and establish regional incubators for mobile and climate innovations.
- Building social and climate resilience by strengthening the government’s social protection programs and supporting the development of a comprehensive framework for disaster and climate risk management. It also aims to increase the number of Jamaicans benefiting from social assistance programs, as well as the number of households with access to water, electricity and regular solid waste collection.
About half of the resources to implement the CPS will be provided as Development Policy Loans that largely fund policy reform through rapidly-disbursed budgetary support. The remainder will be provided through Investment Project Financing in line with the goals of ending extreme poverty and promoting shared prosperity. The CPS defines the action plan jointly prepared by the Government of Jamaica and the World Bank Group, comprised by the World Bank, the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).
A critical part in the strategy will be played by IFC, the largest global development institution focused exclusively on the private sector. IFC will invest in infrastructure, financial sector, small and medium enterprises (SMEs) and growth related sectors.
“Jamaica is at a turning point when it can truly leverage the power of the private sector to create new jobs and growth opportunities, strengthen the country’s infrastructure and logistics, and promote competitiveness,” said Jun Zhang, IFC Senior Manager for the Caribbean. “IFC looks forward to deepening its engagement particularly in key sectors such as energy, transport, access to finance, agribusiness, and education.”
MIGA will continue to facilitate foreign direct investment and private sector development by offering its traditional political risk insurance products on infrastructure, energy, agribusiness and other growth related sectors.