THE WORLD Bank last week Thursday approved three loans totalling US$129.8 million (J$6.4 billion) to support financial sector reform, secondary education and community-based infrastructure improvements in Jamaica.
These projects will assist the Jamaican Government as it seeks to generate new social and economic opportunities while protecting poor and vulnerable groups, the bank stated in a release. All three projects address priorities identified in the Bank's Country Assistance Strategy (CAS) for Jamaica, which focuses on restoring economic growth, protecting vulnerable groups and supporting sustainable development. As part of the CAS, the Bank is undertaking analytical work on the constraints to growth and will also begin work towards the development of a rural strategy for Jamaica.
"The Government of Jamaica has made great strides in addressing poverty and in tackling deprivation with a variety of social, employment and development programs," said Orsalia Kalantzopoulos, the Bank's Country Director for Jamaica. "The challenge now is to continue that momentum in key sectors such as education and infrastructure."
After four years of recession, Jamaica's GDP has returned to a growth path since 2000. Still, the island's economy continues to face the impact of external shocks such as the effects of September 11, particularly a decline in tourism earnings, and low global demand for Jamaica's exports. The country is also weakened by domestic challenges, including floods, unemployment of about 15 per cen - which is much higher among young people and women, violent crime, and high infant mortality.
To address these challenges, Jamaica has committed to a program of macroeconomic stability, generating large primary surpluses by mobilising revenues and restraining public spending. In addition, the Government has been implementing a program to put the financial sector on a sound footing, so as to restore economic growth and reduce poverty.
In support of the Govern-ment's programme, the Bank today approved a $75 million Second Bank Restructuring and Debt Management Program Adjustment Loan (BRDP II) to help Jamaica complete the resolution of the financial sector crisis of the mid-1990s. The loan supports the divestment of the Government's equity stakes in National Commercial Bank and Life of Jamaica - the country's largest domestic bank and largest insurance company, respectively. In addition, this assistance supports completion of the new legal, regulatory and supervisory framework for the financial sector.
Under this loan, the Government has also converted all remaining liabilities at FINSAC (Financial Sector Adjustment Company), the crisis management agency created in the mid-1990s, into tradable government bonds and FINSAC's operations have been closed. BRDP I, approved in November 2000 and also for US$75 million, supported earlier stages of the financial sector restructuring process.
This fixed-spread US dollar loan is repayable in 16 years, including six years of grace.
The Reform of Secondary Education Project II provides $39.8 million to support the Government's 15-year program to improve the quality and equity of secondary education. Jamaica has made impressive progress by enrolling 93 per cent of 3-5 year olds in early childhood education programmes, and almost all children aged 5-13 in primary and lower secondary schools.
The current challenge is to provide high-quality teaching and adequate facilities in all secondary schools, to help students who fall behind, and ensure that those from disadvantaged families have an equal opportunity to benefit from secondary schooling.
This fixed-spread loan, repayable in 17 years, includes a grace period of five years and will be disbursed between 2003 and 2007.
The $15 million National Community Development Project will help disadvantaged communities by providing basic infrastructure, and temporary jobs during the construction phase. The poor people in areas most affected by the decline in tourism will be among the key beneficiaries.
The sub-projects will be selected from the pool of requests received from local communities by the Jamaican Social Investment Fund (JSIF). They will likely include construction of schools, health centres and shelter homes for children, elderly and disabled people; provision of water supply and sanitation, upgrading of roads, as well as training in career guidance, job placement, and family counselling.
This fixed-spread loan is to be disbursed between 2003 and 2008. It matures in 17 years, including five years of grace.
