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Minister of Finance and the Public Service, Audley Shaw, has said that although Jamaica is categorised as a heavily indebted, middle income country, it has been able to access nearly US$1 billion in funding, at low interest rates, from multilateral lending agencies since October 2007.
Mr. Shaw made the declaration on Wednesday (January 28), while addressing the Fourth Regional Conference on Investments and Capital Markets, at the Rose Hall Resort and Country Club, Montego Bay, St. James.
He said that it has been an established policy of the current Government to aggressively expand its engagement with the multilateral institutions, including the Inter-American Development Bank (IDB), the World Bank and the Caribbean Development Bank (CDB), and that the policy has been followed despite criticisms from some quarters.
“I am pleased to tell you that to the end of this fiscal year, we would have had approvals totalling US$951 million from the IDB, the World Bank and the Caribbean Development Bank. Almost one billion dollars (United States) in approved loans from the multilaterals since getting into office in September of 2007”, he announced.
Minister Shaw described the level of loan approval secured as a “remarkable achievement” by any standard of measurement or evaluation, unprecedented in Jamaican history.
He explained that the latest US$100 million loan agreement, signed between Jamaica and the World Bank, was at a 1.8 per cent interest rate with a five-year moratorium on payment. “We have demonstrated that we can access the money,” he stated.
He said that the US$100 million will be disbursed into the treasury some time this week.
Mr. Shaw said there is no shortage of foreign exchange in the island and the country is on track to fulfill its obligations on the 200 million Eurobond that matures in February. He said that the country’s demand for external financing should be considerably reduced for the next two fiscal years.
“In addition, the Bank of Jamaica was very responsive to the implosion and the margin calls that erupted as a result of the international situation. We have put aside $300 million, from the Bank of Jamaica, to assist the securities dealers, of which about $170 million was taken up. We have also negotiated successfully with the IDB, a US$300 million liquidity support programme for the commercial banks, for un-lending to the productive sector, to mitigate the problems of trade finance and other difficulties that we have had”, he said.
“We have also channelled funds into the Export/Import (EXIM) Bank, to assist in that regard, in terms of manufacturers whose lines of credit have dried up”, he stated.
The Fourth Regional Conference on Investments and Capital Markets ends on January 30. It is being staged by the Jamaica Stock Exchange under the theme, “Competition or Collaboration.”