Jamaica Gets IDB Support

Jamaica will get $100m-$200m a year over the next 3 years, for a total $600m, from the IDB and could receive up to $1bn from the multilateral over 5 years, according to a local press report quoting finance minister Audley Shaw. “Let me remind you that this is 5% money; not 10%-12% money as it is on the international capital markets which is likely to get worse now because of the fallout that we are having,” says the minister, according to Sunday’s Jamaica Observer. JPMorgan notes that the cost is also significantly less than the 15%-16% alternatives in the domestic market. The shop adds that Jamaica needs to issue $250m in international debt markets to complete external financing needs for the current fiscal year. “Given the difficulty in raising external funds amid the global credit market seizure and steeply higher rates in the local debt market, increased multilateral funding should help alleviate some of the funding pressure on the sovereign,” says JPMorgan. Jamaica is one of the most highly indebted sovereigns in the region – and very vulnerable in the present environment – but it prides itself on not having restructured. The Observer report also suggests that Jamaica is working with the World Bank to obtain additional funds.