KINGSTON, Jamaica – Jamaica will receive $510 million under a new four-year lending program that is part of an economic reform initiative led by the struggling country’s government, the World Bank’s Caribbean director said Tuesday.
At a news conference in the capital of Kingston, Sophie Sirtaine said things were currently moving in the right direction on the island after many years of anemic growth. Jamaica has had one of the world’s slowest growing economies for four decades.
Sirtaine praised positive economic signs, including a recent return to growth and success in hitting fiscal targets. But she also pointed to Jamaica’s chronic weaknesses, such as its high vulnerability to economic shocks and punishing tropical storms.
“It’s not an easy walk, but I think that everybody is trying to do their best to make sure this works,” Sirtaine said.
Last year, Jamaica began a separate four-year loan package with the International Monetary Fund to stabilize its economy after a previous one forged in 2010 fizzled out. That deal was reached after the government launched a debt-swap program, its second in three years.
The World Bank says its new strategy with the tourism-dependent island of 2.7 million people focuses on creating the conditions for growth and “prosperity for all Jamaicans.” That goal is a long way off. Good jobs are scarce, poverty has increased in recent years and youth unemployment stands at roughly 30 per cent. The value of the Jamaican dollar is steadily eroding.
But Sirtaine said she was optimistic about an economic turnaround. “Unless there’s a huge disaster striking tomorrow, which will then change the context completely, I’m hopeful.”
Finance Minister Peter Phillips recently said the government is committed to the economic reforms and understands Jamaica needs to “grow our way out of the very precarious position we find ourselves in.”
Roughly half of the money from the World Bank’s new lending program will go into budget support to help the government’s reform efforts, such as chipping away at the island’s high public debt. The other half will go toward various projects.
David McFadden on Twitter: http://twitter.com/dmcfadd