PM Holness welcomes $1 trillion package for post-Melissa recovery

 

Prime Minister Dr. Andrew Holness has said the J$1 trillion financial package announced on Monday by five major international financial institutions will be a major boost to the country's reconstruction and recovery efforts following Hurricane Melissa. 

 

Speaking in the House of Representatives on Tuesday afternoon, Prime Minister Holness said the support, which will be over three years, has several components to it. 

 

He said it will provide liquidity and the fiscal space to Jamaica to recover from the ravages of the storm.

 

Dr. Holness argued that the financial package is also a vote of confidence in Jamaica by the international financial community. 

 

"Madam Speaker, the US$6.7 billion financing announced yesterday has three main components: US$3.6 billion in sovereign debt financing. This is for the government to execute the National Recovery and Reconstruction Programme over the next three years and includes up to $1 billion each from the World Bank, IDB and CAF; US$415 million from the IMF under the large natural disaster window of the RFI; and US$200 million from the CDB, the Caribbean Development Bank."

 

Another component of the funding would be US$2.4 billion in private capital mobilisation, he said, calling the offering "the single largest and most comprehensive development financing package ever assembled for Jamaica".

 

"It gives us the liquidity, the fiscal space and the multi-year investment framework required to rebuild stronger and more secure for our future," he stressed. 

 

Still, Opposition Leader Mark Golding pointed out that the financial package will be a major debt burden on Jamaica. 

 

"These debts that we are now going to be incurring to finance our attempts at recovery are like lending money to a business that suffered losses through some kind of crisis that it's trying to dig itself out of a hole from. Taking on additional debt to do that is going to be a challenging road for any country. Therefore, I don't think it's appropriate to treat these announcements in a triumphant way," he argued. 

 

"We are going to be incurring the costs of paying back this massive additional borrowing in the years to come. We are in a country which has spent the last 15 years seeking to get ourselves out of a debt trap where we've had to run massive primary surplusses every year consistently to reduce our debt-to-GDP ratio with a target that's written into our law - written into our law incidentally by a government from this side - which we were anticipating would have been met this year before Melissa struck us. And now we are facing a new era of massive incremental borrowing," the Opposition Leader cautioned.