WASHINGTON (CMC) – Jamaica will strengthen public policy and the efficiency and effectiveness of fiscal management to address the health and economic crisis caused by COVID-19, with a US$100 million loan approved by the Inter-American Development Bank (IDB), the financial institution announced on Thursday.

This is the second operation under the Programmatic Policy-Based Loan (PBP) modality, which consists of two technically related, but financially and contractually independent operations. The first one was approved by the IDB in March 2021.

“The new loan will ensure the availability and timely execution of public resources to address the health crisis caused by the pandemic. It will also strengthen the counter-cyclical effect of fiscal policy with the temporary introduction of measures to protect the income of vulnerable households and increase business liquidity,” the IDB said.

Some of the measures include improvements in the targeting of social programmes and the implementation of a tax credit programme for micro, small and medium-sized enterprises (MSMEs).

“The IDB financing will also support reforms to boost economic and fiscal recovery in the post-pandemic period, including the creation of an independent fiscal commission to oversee government spending and improvements in governance and gender representation in all boards of public bodies and the tracking of climate-related government spending, among other measures,” the Bank added.

The operation is in line with Vision 2025 – Reinvesting in the Americas: A Decade of Opportunities, created by the IDB to achieve recovery and inclusive growth in Latin America and the Caribbean, in the areas of small and medium-sized enterprises, gender and inclusion, and climate change.

The IDB US$100 million loan has a 20-year maturity, a 5.5-year grace period, and an interest rate based on Secured Overnight Financing Rate.