YESTERDAY, Inter-American Development Bank (IDB) President Luis Alberto Moreno arrived in Jamaica. The IDB has become Jamaica’s most important banker, so it is encouraging that this visit appears to be saying to us ‘job well done, keep up the good work’, rather than a crisis visit as has frequently occurred in the past.

The timing of Mr Moreno’s trip is, however, fortuitous. The day before he arrived, Cuba and the United States agreed to resume normal diplomatic relations after a 53-year suspension. Some older heads in Jamaica may even remember the Cuba of the 1950s, the then legendary playground of the Americas. They may also recall, and advise the younger folk, how in the 1960s the tourism industries of Jamaica and The Bahamas both benefited from the removal of Cuba as a competitor.

In a related development, just days before this rapprochement between the US and Cuba, investment bank Goldman Sachs was said by major international news organisations to have bought, and sold back to its owner, approximately US$4 billion of PetroCaribe debt owed to Venezuela by the Dominican Republic. Jamaica had apparently also “received proposals” for its US$3 billion.

International financial markets are now forecasting a Venezuela debt default within a couple of years, signalling the expected end of PetroCaribe if oil prices stay at their current lows over that period. The implied threat to one of Cuba’s key sources of financing and low-cost oil undoubtedly gave additional impetus to the Vatican-brokered US/Cuba negotiations.

When it was constructed, Jamaica’s current International Monetary Fund (IMF) programme assumed continued generous funding from PetroCaribe. Indeed, we would not be exaggerating to call it the IMF/PetroCaribe programme, as such was the scale of the planned external funding assumed from PetroCaribe.

The good news is that the dramatic fall in oil prices, if sustained, would offset the loss of PetroCaribe debt financing in terms of balance of payments support. It would also lower Jamaica’s future external debt accumulation on a consolidated basis.

The Caribbean, and particularly Jamaica, still have a little time to adjust themselves to the new reality, as the United States’ Cuban Liberty and Democratic Solidarity Act of 1996 requires progress in areas such as liberalising political activity, holding free elections and dissolving state security bodies.

However, the measures announced by President Obama allow Washington to deepen ties with Havana before Congress is asked to lift sanctions. The April summit of the Organisation of American States is likely to represent a key meeting point, and milestone, in assessing progress on the improvement of US/Cuba relations.

The IDB’s deep regional institutional knowledge, and Latin American roots give it a huge advantage in assessing the impact of the end of the embargo on the future development of the Caribbean. President Moreno is ideally placed to provide regional leadership on this issue — taking advantage of his extensive knowledge of the US Congress — to help the countries of the region put their houses in order.

A combination of the US Plan Colombia, tackling crime and security issues, and the Brady Plan, tackling debt, would help the region through increased investment and trade. Calling it the new Caribbean Basin Initiative, or Free Trade for the Americas, may even give it some traction with older House Republicans. If designed to include Cuba in the future, as would probably be necessary, on a conditional basis as an incentive for change, we would need to ensure the Caribbean gets a head start, and indeed massively accelerate its reform programme.