AUDLEY Shaw’s strategy couldn’t be clearer.

He is trying to flush the Jamaican economy with cheap US dollar funds to stop the dizzying 13 per cent drop in the local currency since last January, by putting the speculators out of business.

With just under US$1 billion between what he got last year and what is all but in his pocket for this financial year – at ridiculously low rates such as three per cent – Shaw has comprehensively transformed his image from his self-professed “Seaga’s water boy” to Golding’s money boy.

The finance minister was on cloud nine last week after picking up his latest US$100-million cheque from the World Bank, light years from the time he was roundly ridiculed for promising he could get rock bottom rates from the multilateral financial institutions and drag down Jamaica’s crippling debt mountain.

“This loan supports Jamaica’s efforts to reduce the country’s high level of debt and improve fiscal sustainability, which have constrained the country’s growth potential,” Shaw said at the signing. “These priorities have become even more relevant in the context of the current global financial market crisis and economic slowdown.”

Today, the Government is expected to ink three loan agreements with the Inter-American Development Bank (IDB) totalling US$329 million. IDB President Luis Alberto Moreno, Shaw’s best friend these days, arrived in Jamaica yesterday for the signing of the package.

The loan pacts comprise a US$300-million Liquidity Support Programme for the Commercial Banks; a US$14-million Supplementary Loan for the Primary Education Support Project (PESP) and a US$15-million loan for the enhancement of the PATH Programme that provides a safety net for the island’s poorest.

Shaw has been making a believer of the cynics and rarely misses an opportunity to remind former finance minister, Dr Omar Davies and others that they had poured cold water on his (then opposition finance spokesman’s) insistence that such low interest funds were available.

At the end of the 2007 election debate with Davies, analyst Don Robotham, who is known for an acid tongue, said of Shaw: “His answers on the financing of the JLP’s spending plans were unpersuasive, to put it mildly”.

At the weekend, Shaw’s World Bank achievement drew kudos from the leaders of Jamaica’s most powerful business organisations, who generally saw the concentration of multilateral loans as reflecting the growing confidence of these institutions in the government’s reform programme. Chris Zacca, the head of the umbrella Private Sector Organisation of Jamaica (PSOJ) called Shaw’s efforts “extremely timely and positive”, saying the US dollar funds were “desperately needed” at this time.

Zacca who had earlier expressed concern that the central bank had adjusted interest rates upward, against the slide of the dollar, said the money would “go a far way in reducing speculation in the foreign exchange market and help stop the slippage caused by an undersupply of US dollars.

The PSOJ president noted that the inflow was pay off for the “hard and visionary” work put in by Shaw and his team. “Nobody would have guessed that the world credit crisis would have been what it is, at the time Shaw began advocating cheap multilateral funds,” he said.

The World Bank itself put the crisis in context in its report on the Prospects for The Global Economy in 2009.

“Much tighter credit conditions, weaker capital inflows to middle-income countries, and a sharp reduction in global import demand are expected to be the main factors driving the slowdown in developing countries,” the Washington-based bank said.

The report predicted that import demand would decline by 3.4 per cent in high-income countries during 2009, while net private debt and equity flows to developing countries were projected to decline from US$1 trillion in 2007 to about US$530 billion in 2009, or from 7.7 to three per cent of developing countries’ Gross Domestic Product.

Inevitably, investment growth in developing countries would slow dramatically, and overall, growth in developing countries was projected to slow to 4.5 in 2009, down from 6.3 per cent in 2008. Low-income countries would have less access to international capital markets, as demand for exported goods and services decrease, commodity prices fall and remittance inflows take a dive.

The World Bank also predicted that real GDP growth for Latin America and the Caribbean would decline from 4.4 per cent in 2008 to 2.1 per cent in 2009. This situation could worsen if the global credit markets continued to contract and constrict as domestic financial sectors find themselves unable to borrow or lend.

Shaw’s answer is more multilateral funds.

Milton Samuda, president of the Jamaica Chamber of Commerce (JCC) seemed to agree. He said the government’s engagement of the multilateral agencies and its ability to secure the type of funding that they had, was “a step in the right direction and we commend Minister Shaw and his team in that regard”

“The funds are needed for a wide variety of matters. I think what is fundamental is regardless of what it is that the Government does in trying to set the macroeconomic framework and the business environment in which the private sector can conduct its business, at the end of the day the real solution is for us to produce and grow our way out of debt,” Samuda said.

“We can’t borrow our way out of debt and we can’t restrict and cut expenses indefinitely. The private sector needs to do its part and insist that Government create an environment in which investors feel that they can put down hard-earned cash in productive endeavours rather than paper,” he said.

Jamaica Manufacturers Association (JMA) president, Omar Azan, congratulated the Government for being able to access the funds at lower rates at this time of crisis worldwide.

“I am very supportive of any measures that the Government will use and hopefully implement in a timely manner to increase the efficiencies of Government ministries, especially when it comes to curbing expenditures and controlling debt to get us more efficient as a country,” Azan stressed.

Michael Lumsden, the Jamaica Exporters Association (JEA) leader, said that if the funds received by the Government were used productively and “gets the results that are intended, then it’s obviously good that we got it”.

“The (finance) minister had said that he had intended to source low cost funding and that is what he has done and he has a schedule of more funds to come in. Whether it will work out entirely, that’s another question, but the future will tell. Personally, I am very satisfied with what the minister is doing.”