World Bank gives US$14.85-m grant to reinforce Jamaica's resilience to natural disasters

World Bank gives US$14.85-m grant to reinforce Jamaica's resilience to natural disasters

Tuesday, October 22, 2019

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KINGSTON, Jamaica — The World Bank recently announced a US$14.85 million grant from theGlobal Risk Financing Facility (GRiF)to support Jamaica in expanding its financial protection against natural disaster risks.

The GRiF isa multi-donor trust fund housed at the World Bank,supported by Germany and the United Kingdom, and according to the World Bank, thisgrant represents the largest made by GRiF to a middle-income country.

The announcement was made by World Bank Country Director for the Caribbean, Tahseen Sayed at the 'Learning from Jamaica's Economic Turnaround' event during the World Bank-IMF Annual Meetings.

The event featured a presentation from Minister of Finance, Nigel Clarke on the lessons from Jamaica's success in reducing public debt by almost 50 per cent of GDP in six-and-a-half years while reducing unemployment and inflation to historically low levels.

The World Bank said that despite Jamaica's fiscal achievements, the country remains vulnerable to natural disasters and extreme weather events that could threaten the macroeconomic outlook and fiscal gains.

“Approximately 18 months ago we set out our policy to take a multi-layered and strategic approach to protect Jamaica against the potential fiscal shocks that can be caused by natural disasters,” Clarke said.

“In March we began the capitalization of a Natural Disaster Fund with a historic allocation even as we finalized our application, with World Bank assistance, to the GRiF. Assistance from the GRiF is crucial as the most significant of the layers involve low frequency, high severity events that can be covered, in part, by risk transfer instruments such as a catastrophe bond, which require premiums to be paid and hence fiscal space. This GRiF Grant is therefore highly appreciated as it makes the goal of multi-layered coverage more realizable by assisting Jamaica in covering the premium cost of a risk transfer instrument.”

Recognizing the risk of natural disasters, the World Bank said the government has embarked on an ambitious reform program, combining expanded financial protection against disasters with fiscal and public financial management reforms designed to enhance resilience.

“This GRiF grant bears testimony to Jamaica's strong progress in building fiscal and financial resilience,”Sayed agreed.

“The World Bank remains committed to deepening its partnership to help the country in its efforts to sustain these hard-won gains. We are pleased that the GRiF grant is one part of a package of new support provided by the World Bank, which includes US$140 million for fiscal resilience, growth, and enhancing social safety nets,” she added.

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