The Government’s debt reduction programme, and the sugar industry have been boosted with $4 billion in budget support, from the European Union (EU).
Of the total, some $2.7 billion has been approved for the Debt Reduction and Growth Enhancement Programme (DRGEP), while $1.3 billion will go towards support for the sugar sector.
Speaking at the handing over ceremony, today (August 26), at Jamaica House, Minister of Finance and the Public Service, Hon. Audley Shaw noted that the DRGEP is part of the total package that has been entered into with all the country’s multi-lateral partners.
“But what is unique with the European Union, is that unlike getting low-cost loans, which we highly appreciate from other multi-lateral partners, from the EU it is not a loan, it’s a grant,” he pointed out. The EU is the largest source of grant funding to the Government, with the DRGEP getting over 107 million pound in support.
Prime Minister, the Hon. Bruce Golding (right), in discussion with Head of Delegation of the European Commission, Ambassador Dr. Marco Mazzochi-Alemanni, at the official handing over ceremony for $4 billion in budget support, for the Debt Reduction and Growth Enhancement Programme, and the sugar industry, at Jamaica House, today (August 26).
“We would not be able to get this money unless the EU was satisfied with the progress that is being made under the debt reduction programme – through budget preparation and execution, monitoring the fiscal responsibility framework, management of the public debt, legislation, the screening and divestment of public entities, and our medium term expenditure framework, which has been developed with the ministries and the International Monetary Fund, as well as the reforms to the tax system that are presently underway,” Minister Shaw outlined.
In his remarks, Head of Delegation of the European Commission, Ambassador Dr. Marco Mazzochi-Alemanni said budget support has become the major tool of co-operation between the EU and Jamaica.
He noted that the DRGEP disbursement was decided mainly in consideration of the government’s macro-economic policies, including the Stand-by Agreement with the International Monetary Fund (IMF), the success of the Jamaica Debt Exchange (JDX), tax reforms, and improved transparency in procurement.
“The general public does not know that an incredible amount of progress has been made in terms of procurement rules and implementation of procurement rules,” he remarked.
Meanwhile, he said the EU was pleased with the positive outcome of the first IMF review, and that the government must be commended for its resilience for honouring its pacts with the EU and the IMF, despite the many challenges. “We trust the government will continue to hold to its economic tenets, despite sectoral pressures,” he said.
As it relates to sugar, Ambassador Alemanni congratulated the government on the establishment of a domestic market for ethanol, the funding of the cane expansion fund, and the roll-out of social mitigation programmes.
The funding for sugar is aimed at supporting the government in implementing the Jamaica Country Strategy for the Adaptation of the Sugar Industry. This is with particular emphasis on improving the competitiveness of the sector, while assisting sugar dependent areas that have been affected by the changes in the sector.