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Inter-American Development Bank (IDB) President Luis Moreno arrived in the island this afternoon, Sunday January 18 2009 to participate in the IDB’s III Regional Forum on Violence Prevention and Citizen Security; sign three loan contracts with the Government valued at US$329 million and hold talks with the Government on the Bank’s programme in Jamaica.
In welcoming the President, Minister of Finance and the Public Service, Audley Shaw explained, “Jamaica is gratified at being the first Caribbean country with the foresight to engage the IDB and other multilaterals in providing credit in support of the country’s economic reform and development programmes. The IDB, through its current president has been most responsive and this is a clear demonstration of the Bank’s confidence in the administration’s economic policies.”
The IDB President who is visiting the island for the second time in less than two years, noted that Jamaica’s request has been very timely as it came at a time of international financial turmoil when the international credit market was virtually frozen and economies large and small were reeling from the credit crunch, depressed consumer demand and the general slowdown of economic activity.
“The IDB, in response to Minister Shaw’s request is pleased to be of assistance. It has been a long time since the country has requested this level of intervention and we have responded positively and will ensure the quick disbursement of the funds, in particular we recognise the importance of liquidity during this period of intense volatility.” Mr. Moreno emphasized.
The three contracts to be signed represent a total of US$329.0 million in loan funding of which US$314.0 million is new loan funding. US$15.0 million is a reallocation from an existing loan of US$40 million, which was made to the National Water Commission for the Kingston Water and Sanitation Project. With respect to the contract of US$300 million for the Liquidity Programme for Growth Sustainability, the loan facility represents a part of Government’s response to avert serious fall-out in the productive sector as a result of the global financial meltdown. The Loan is aimed at providing increased liquidity to the financial sector in order to maintain credit flows, which have been negatively impacted by the global financial crisis.
Minister Shaw disclosed that resources, which were negotiated on December 16, 2008 and was approved by the board of the IDB on January 15, 2009, would be wholesaled through the Development Bank of Jamaica (DBJ) to Approved Financial Institutions. “The Government appreciates the IDB’s successful efforts to prepare and approve the loan within a two-month period thus ensuring that the resources can be made available as soon as possible,” he noted The Social Protection Support loan of US$15 million to the Food Price Crisis Programme was developed in response to a GOJ’s request to the IDB in July 2008 for assistance to mitigate the adverse impact of food price increases on the poor.
These resources will be channelled through the Programme for Advancement Through Health and Education (PATH) Programme, in support of the Government’s decision to expand the PATH. IDB assistance will also complement financing which the World Bank has committed for the PATH Programme.
The Minister explained that the US$15 million to finance the Programme was made available through a re-allocation from an existing loan with the National Water Commission. The Amendatory Contract to be signed by the IDB, Government and the National Water Commission, would effect the re-orientation of the funds to the Social Protection Programme. “The Bank must be congratulated for its creative approach in providing a loan to assist in widening the country’s social safety net, without increasing the debt stock,” he said.
The US$14.0 million Supplementary Loan to the Primary Education Support Project (PESP) will provide financing to the on-going PESP and bring total IDB financing for the Project to US$43.0 million.
Additional loan resources became necessary due to increases in building costs. The financing will ensure the completion of seven (7) of the twelve (12) schools identified for replacement, expansion or construction under the Project, thereby increasing availability of student spaces and alleviating overcrowding.
The PESP has also been successful in improving the quality of delivery of the revised primary school curriculum through training of primary and tertiary level teachers. The project has also financed the development of a mentorship and literacy programme for grades 1-3.
The President’s major public event is the IDB’s Third Regional Forum on Violence Prevention and Citizen Security on Monday, January 19 at the Jamaica Conference Centre in Kingston. The aim of the Forum is to strengthen the capacity among Caribbean nations to design and implement violence prevention and citizen security programmes.
The event, which will attract experts and policy makers from Latin America and the Caribbean, is also seeking to promote a regional collaborative strategy among Caribbean countries to address insecurity more effectively through public policy, capacity building and information sharing, among others. President Moreno will deliver the opening remarks, along with Prime Minister Bruce Golding and Senator Martin Joseph, the Minister of National Security of Trinidad and Tobago.
The IDB President’s visit is the second in less than a year, having visited the island in June 2008 for discussions with the Government and the signing of a US$1.6 million grant agreement under the IDB’s PRODEV initiative used for the “Programme to Support the Implementation of the Government of Jamaica’s Medium Term Action Plan to Manage for Results”.