Officials from the International Monetary Fund said Monday that a deeply indebted Jamaica could get up to $958 million in loans to help turn around its sinking economy.
The Caribbean nation has been in protracted negotiations for months with the Washington-based financial institution. The two signed off on a preliminary agreement in February. Since then, the country has made “significant progress” in restructuring billions of dollars in debt, IMF officials said. The board could meet at the end of April to approve the four-year package.
Also, the World Bank and the Inter-American Development Bank announced that, pending approval by their respective boards, they have each allocated an additional $510 million in financing over the next four years to help Jamaica through its economic crisis.
Dubbed the Greece of the Caribbean, Jamaica has been struggling with high debt, low reserves and a contracting economy. More than half of the government’s spending goes toward paying its debt. IMF officials call Jamaica “a complicated case,” but note its “ambitious reform agenda” could help put the country on a path to economic growth.
“The program is about creating a growth-oriented environment in which employment can increase, in which Jamaicans can earn a living in their country and hopefully see less need to move outside. For that, macro-economic stability and debt sustainability are key because investors are very hesitant to invest in a country without such fundamentals,” an IMF official said in a Monday afternoon conference call.
But even as Jamaica works to strengthen public finances, improve debt management and institute tax reform, it’s also important to ensure that “there is a solid social safety net,” the IMF said.
The pending arrangement with the IMF has yielded mixed feelings among Jamaicans, who note that this is not the first time they have had to turn to the institution for a financial bailout.