EPOC Co-Chair Supports Pay Down of Petro Caribe Debt

Co-Chairman of the Economic Programme Oversight Committee (EPOC) Richard Byles, is fully supporting the successful move by Government in raising US$ 2 billion on the international capital market, which will be used to pay down the country’s Petro-Caribe debt with Venezuela.

The money was raised through two bond issues.

Addressing the launch of the Montego Bay Chamber of Commerce and Industry’s ‘Mobay Expo’ at the Wexford Hotel in the city earlier on July 29, Mr. Byles said the move will enable the Government to make a major reduction in the country’s debt to Gross Domestic Product (GDP).

He said “what that will do is reduce our debt to GDP very considerably, by as much as 10 per cent or even a little bit more. So, we are going to drop from say 137 percent debt to GDP, which is ridiculous, to about 126 per cent and that will put us very firmly on the road to achieve  less than a 100 per cent debt to GDP by 2020”.

This, he said, would be a major achievement in the economic reform programme being pursued by the government.

The EPOC Co-Chairman scoffed at any view that the funds that have been raised should be seen as Jamaica borrowing more money.

He pointed out that the initiative will give the Government access to some US$500 million of what he describes as “back up funding,” which can be used for the implementation of major job creation projects.

“It is not that we are borrowing more money and digging a deeper hole for ourselves. We really borrowed those funds in order to pay off a much larger debt,” he stressed.

He proposed that the Government invest the funds in projects in areas such as agriculture and business processing outsourcing (BPO), which will create employment and wealth for Jamaicans and Jamaica.

“What’s the point of taking the money and employing people for six months and then the money is finished and the jobs are done. What we really need are economic activities that hire people, give them a job that is contributing to the GDP and give them a job that is there for as long as they want. That’s what this country wants; sustainable economic development and sustainable jobs,” he said.

Finance and Planning Minister, Hon. Dr. Phillips, announced earlier this week, that the Government was able to raise US$1.35 billion at a rate of 6.75 per cent and secured a 30-year issue for $650 million at 7.87 per cent,  which will enable the Government to buy back a substantial portion of the country’s debt to Venezuela.

The PetroCaribe Agreement was established under the leadership of the late President of Venezuela, His Excellency Hugo Chávez, in response to the sudden increase in international oil prices.