By Caribbean News Global contributor
WASHINGTON, USA – Jamaica will get a US$75 million loan from the Inter-American Development Bank (IDB) to strengthen the efficiency and effectiveness of public policy and fiscal management in response to the health and economic crisis caused by COVID-19, the IDB announced. The IDB loan has a 20-year maturity and 5.5-year grace period and its interest rate is LIBOR-based.
“The loan, the first of two policy-based loans, will promote the availability and timely execution of public resources to respond to the health crisis caused by COVID-19. It will strengthen the countercyclical effect of fiscal policy through the introduction of temporary measures to protect the income of vulnerable households and increase liquidity for businesses during the crisis” the bank added. “The loan will promote economic and fiscal recovery in the post-pandemic period.”
Jamaica, like other Caribbean countries, has been hit hard by the pandemic as nearly a third of its output and employment are linked to the tourism sector. The IDB loan will help finance cash transfers to employees, grants to low-income informal workers, vulnerable groups and the unemployed, and provide student loan relief. It will support small business grant programs, especially in the tourism sector.
“This loan comes at a crucial moment in Jamaica’s fight against COVID-19 as the country begins the process of vaccinating its population to save lives, but also as it prepares to ramp up economic activity in the face of the economic fallout in 2020,” said IDB country representative and manager of the Caribbean department, Therese Turner-Jones. “I am hopeful that these resources will help with both the health and recovery of the country.”
The IDB loan will also support measures to strengthen fiscal institutions to improve efficiency and transparency of public investment as well as the formulation of strategies and public policy responses to limit the economic fallout of the crisis and bolster subsequent economic and fiscal recovery efforts.