A year after turning to international lenders for help with its sinking economy, Jamaica is getting some much needed assistance to boost business and investor confidence.
The World Bank Group’s Board of Executive Directors Tuesday agreed to provide $510 million in loans over the next four years to bring badly needed reforms to Jamaica —from decreasing the time it takes to register businesses or pay taxes, to modernizing customs collections — that the country’s cash-strapped government hopes will help to further strengthen the economy.
The loans are being provided as part of a reform package. Finance Minister Peter Phillips has championed economic reforms, saying the only way for Jamaica to dig itself out of its current financial troubles is to “grow our way out.”
“This agreement signifies our intention to stay the course, buoyed by the support from international development partners such as the World Bank Group,” Phillips said.
Phillips and other government officials are currently discussing the country’s budget, which is closely being eyed by the international community, which wants to see if Jamaica can make a comeback from decades of low growth and high debt.
The latest help comes as Jamaica, one of the world’s most indebted countries, holds ongoing discussions about its $5 billion budget, and a year after officials signed an agreement with the International Monetary Fund after the global financial crisis, rising food and energy costs wreck havoc on the country’s already struggling economy. Between 2007 and 2010, for instance, poverty rose from less than 10 percent to more than 17 percent, while unemployment soared to more than 15 percent, the World Bank said.
“This new strategy is about changing the growth trajectory of Jamaica and boosting competitiveness and private sector development,” World Bank Country Director for the Caribbean Sophie Sirtaine said. “It also comes with support in scaling up successful programs in social protection, early childhood development and community development.”
Sirtaine said reforms adopted by the government so far have started to restore confidence in the Jamaican economy. The country also has successfully passed its quarterly reviews of a debt restructuring program under the International Monetary Fund.
According to the Bank, the loan will be available for three key areas of support: modernizing the public sector by strengthening the government capacity and effectiveness; fostering investments in high potential sectors such as logistics and agriculture; and strengthening the government’s ability to respond to natural disasters and social protection programs.
Over the next few years, Jamaicans are expected to see changes to the public pension system, improved customs administration and standardization of the Kingston port; reduction in the time needed to register a new business, obtain a construction permit or pay taxes; and an increase in 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.