Finance Minister Explains Visit to Europe

Minister of Finance and the Public Service, Audley Shaw, has explained that the purpose of his recent European tour was to introduce the new government to investors in the international capital markets, and not to seek funding.
Speaking on February 18, at the signing of a US$10 million agreement with the Kuwait Fund for Arab Economic Development, for the second phase of rehabilitation works for roadways, Mr. Shaw said he was taking the opportunity to “correct some of the mischief that is being made in that area.” “Basically, it (the tour) was to introduce ourselves as the new government to investors, and in this particular case to introduce ourselves to investors in the international capital markets,” he said. The tour included four countries, England, Germany, Switzerland, Austria, and five cities.
“We had very good meetings with over 30 institutional investors who have over the past 10 years been investing in Jamaican instruments on the international capital market. I have seen some cynical statements being made in the press that I went to the capital market for three per cent money. I did not go to the capital market for three per cent money and (it) is not available on the international capital market,” he rebutted, noting that he and his team would be visiting North America in the coming week, to again introduce the government.
Mr. Shaw said he stood by his position that wherever there was funding available with low interest rates, the government would seek it out. “To that extent, that will relieve the pressure and the need for us to be raising all of our needs on the relatively expensive markets, whether it is local or international capital markets,” he said. He added that there are certain types of projects, such as road infrastructure, education transformation and health care initiatives that the government cannot finance at 10 or 12 per cent or even the Bank of Jamaica rate of 15 per cent. “So, I have set as a target that wherever and whenever I can get cheaper money to bring into the system, I shall be relentless in seeking out those sources of funding,” the Minister said.
Mr. Shaw said he has re-engaged the multi-lateral organizations, such as the Inter-American Development Bank, the Caribbean Development Bank and the World Bank. He assured that as a result of these initiatives, “we are going to be able to access cheaper funding from the multi-lateral organizations, in addition to bilateral sources, like Kuwait, and those sources of funding will come in the region of between three and five per cent.” The Finance Minister noted that the multi-lateral agencies had indicated that they would lend money at 1.5 to 2 per cent above the Lincoln Independent Business Association (LIBA) rate, and for Jamaica, this is the right direction in which to go.
“The government has spoken explicitly and categorically, that wherever we are going to find cheaper money, we will find it. If it means we must exercise more fiscal discipline, then so be it. We have to cut out the waste, and we have to make sure that we deliver efficiently in terms of project implementation,” he stressed.