WASHINGTON, March 3, 2015- The World Bank Board of Directors approved today a US$ 75 million Development Policy Loan with Jamaica which aims to strengthen support for reforms aimed at improving the investment climate and competitiveness, and public financial management.
The reforms adopted by the government have started restoring confidence in the Jamaican economy: Jamaica jumped 27 places to 58 among 189 economies worldwide in the 2015 Doing Business indicator and the Government has started discussions with investors on a number of large infrastructure projects including the Logistic Hub Initiative. The World Bank is working with the Government to lay the foundation for economic growth.
This financing builds on the reforms supported under a previous Development Policy Loan to Jamaica and is part of a large package of financial support from the International Monetary Fund (IMF), the World Bank and the Inter-American Development Bank (IDB) of about US$ 2 billion over four years, which includes the IMF Extended Fund Facility of US$ 932 million and US$510 million each from the World Bank and the IDB. This large package of financial support was approved in 2013 to change Jamaica’s growth trajectory.
“We appreciate the continued technical and financial support of the World Bank for the successful achievement of our goals articulated in Vision 2030: Jamaica’s National Development Plan. This has facilitated a steady recovery from a precipitous edge in 2013. However the economic environment is still fragile. We therefore welcome the renewed vote of confidence on this continuing journey until we are truly out of the woods”, said Peter D. Phillips, Jamaica’s Minister of Finance and Planning.
The main results to be achieved through this DPL are:
- An improved investment climate and competitiveness by adopting new measures to reduce electricity cost, facilitate private sector investments and address infrastructure needs to support the Government’s Logistic Hub Initiative.
- Sound Public Financial Management through a pension reform, a more transparent tax regime and better planning and monitoring of all public investments.
“Jamaica is at a turning point when it can attract private sector investment and leverage opportunities to unleash economic growth. The country has embarked on a set of ambitious reforms to fill in the large infrastructure gap, reducing the high cost of electricity and dependence on oil, while putting its fiscal house in order. These efforts must continue,” 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 United Kingdom’s Department for International Development (DFID) and additional investments under preparation.
This loan, from the International Bank for Reconstruction and Development (IBRD) to Jamaica, has a final maturity of 30.5 years, with a 6.5 year grace period.