THE arrival of Inter-American Development Bank (IDB) President Luis Alberto Moreno in Jamaica yesterday is huge news, on par with the visit of International Monetary Fund (IMF) Managing Director Christine Lagarde in July of this year.

In some practical ways, it is even bigger news for Jamaica than Lagarde’s arrival, viewed from the perspective of the IDB’s enormous and continuing commitment to Jamaica over the past 45 years. This commitment has numbered around 360 individual projects and programmes, with roughly one-sixth of them being current projects undertaken by the IDB today.

The IDB’s commitment has spanned just about every area of Jamaican economic and social life, including education, crime, poverty alleviation, as well as physical and institutional infrastructure (such as information technology and justice reform, to name only a few in this area), and the environment.

Under the leadership of President Moreno, who was elected as head of the IDB in 2006 with the support of the Government of Prime Minister Portia Simpson Miller, the IDB’s engagement with Jamaica has dramatically accelerated. Indeed, it has led the way in the recent heavy multilateral re-engagement with Jamaica over the past six years, once again playing a critical initial role in our surviving a financial crisis, this time global.

The IDB also played critical roles in both IMF programme negotiations, and as a key funder became Jamaica’s largest multilateral debtor, and, by extension, the largest single external financier of Jamaica. More importantly, unlike the IMF’s similar-sized commitments, the money is not short term, with repayment terms of up to 20 years or more.

A key area of focus of the economic reforms promoted by the IDB is to break Jamaica out of its high-debt, low-growth trap, through improvements in our competitiveness. The IDB’s funding, being a key part of the front-loading of the multilateral support for the 2010 IMF programme, was of a sufficient level that it actually reduced Jamaica’s country risk sufficiently to allow domestic interest rates to fall after the Jamaica Debt Exchange.

This allowed actual capital gains on the restructured local bonds, created the conditions for our then Eurobond rally, and allowed the reopening of capital market access for Jamaica, all facilitated by a modest currency revaluation in 2010.

After Jamaica’s IMF programme went off track in 2011, following three IMF programme reviews, the IDB again helped Jamaica to get a new programme with the IMF, once again as a key player in the very tough negotiations.

Indeed, not coincidentally, Moreno’s last trip here was to attend the ‘Second Annual Meeting of Governors of the Caribbean Country Department’ of the IDB, which on January 17 and 18, 2013, preceded Jamaica’s new IMF programme by a matter of weeks. Even at that time, before our latest IMF programme, the IDB was Jamaica’s largest multilateral creditor, with a loan portfolio of just under US$1.3 billion.

This made it the Government’s largest individual lender on a net basis, as the lending of our large Jamaican banks is funded by locally based deposits. At that time, the undisbursed portion of its loan and grant portfolio exceeded US$340 million. All of this does not include the new, very substantial commitments and lending that have occurred as part of Jamaica’s new IMF programme, that should over time push the IDB loan portfolio above US$2 billion in actual loans extended (it is already above that if one includes the conditional commitments already given as part of the current IMF programme).

The IDB’s persistence in supporting Jamaica has been rewarded, in that Jamaica has now passed five, and should have passed six IMF reviews after the IMF board meets next week. This has occurred due to what can only be described as the courageous and extraordinarily determined leadership of Finance Minister Dr Peter Phillips, his Cabinet colleagues (particularly the prime minister and Justice Minister Mark Golding) and Dr Phillips’ team at the Ministry of Finance in meeting the demands of a very tough IMF programme to the letter.

Other than Minister Phillips, Minister Golding particularly deserves credit for driving through Parliament some of the most complex and detailed pieces of financial and business legislation, in probably the most intense legislative effort Parliament has ever seen, to meet the demands of the IMF agreement.

Much of this legislation has been outstanding for one or more decades. In the case of the recently passed insolvency bill, the draft Caricom legislation of which my father and others worked on in the late ’80s to early ’90s, Jamaica has been waiting for well over 20 years. It is reasonable to conclude, therefore, that Mr Moreno’s arrival here, like Ms Lagarde’s before him, is in part, recognition and encouragement of this leadership.

On his previous trip to Jamaica on June 5, 2008, Mr Moreno addressed the Private Sector Organisation of Jamaica’s Annual Economic Forum on the theme ‘Managing Realistic Expectations for the Jamaican Economy: Going for Growth’.

Somewhat presciently in view of the events of May 2010, Mr Moreno emphasised the issue of crime and security, citing his own experience as a Colombian national. He rightly noted that people need to feel secure to have optimism and confidence in the future of the country, and called for greater co-operation with the security forces.

Interestingly, in view of the importance of the US-supported Plan Colombia — a military and diplomatic aid initiative aimed at combating Colombian drug cartels and left-wing insurgent groups in Colombia and which turned Colombia around — the new US ambassador to Jamaica is also called Luis Moreno.

In his 2008 speech, Mr Moreno advised the private sector that the IDB’s support could take the form of testing new ideas, developing designs, and funding projects in general, including funding small- and medium-sized enterprises in the private sector.

In my article on his last trip here for the governor’s meeting, I suggested that the ideas in my paper, ‘A new approach to development banking in Jamaica’, written for the Economic Commission for Latin America and the Caribbean in 2006, were still awaiting implementation. However, a good example of Jamaica’s recent progress in private sector development (it being only one example), is that over the past two years there has been huge progress in the IDB-supported Jamaica Venture Capital Programme of the Development Bank of Jamaica. Next year should see several funds being launched under this initiative.

There are also many other business environment reforms that have taken place over the past two years, having their genesis in the IDB’s business environment analysis of nearly a decade ago, but these will require another article to document.