Since Independence, Jamaica has never faced a physical and financial challenge of the magnitude created by Hurricane Melissa, and it will take time and unprecedented amounts of money to build back better.

The damage is similar to that which results from warfare and calls for nothing less than a massive Marshall Plan. As such, the announcement on Monday by the combined development community of support up to US$6.7 billion, a previously unimagined level, is welcome.

Now that the funding is assured, all eyes are on the medium-term development plan that it will finance. It should not be delayed, but it should be formulated and implemented with ample consultation and strong transparency and efficiency safeguards.

Importantly, the raw scale and scope of the financing pledge is directly linked to Jamaica’s new reputation for fiscal discipline. Let’s be clear: If we still had the disgraced “run wid it” policy this offer would simply not have been made. Despite strident calls for slower debt reduction, the Government kept a laser focus on fiscal discipline. This not only preserved vital fiscal and monetary buffers against exogenous shocks, it also preserved Jamaica’s ability to access extraordinary support when facing a massive challenge.

While we acknowledge the massive pledge of loans and grants over the next three years, there are three things that we must keep in mind: First, the majority of the amounts are loans from six different international finance institutions (IFIs) which must be repaid. Also, they are pledges and not commitments, so all the usual requirements apply.

Before taking on new debt the Government should consider repurposing the existing loan portfolios that could be about US$500 million. The remarkable news is the unexpected US$1 billion from CAF — The Development Bank of Latin America and the Caribbean. Jamaica joined CAF in 1999, but has yet to activate a lending programme.

CAF has been spearheading a successful drive to increase its presence in the Caribbean. In Trinidad & Tobago, Barbados, Antigua & Barbuda, and The Bahamas it has overtaken the traditional IFIs. The size of CAF’s pledge, its more agile process for project preparation, lower transaction costs, and independence from the Washington Consensus make it an intriguing option to be included in Jamaica’s menu of options.

While we are grateful for all pledges, we salute the realisation that the benefits to be derived from competition apply not only to the private sector, but also to the development community.

Second, the estimate of losses by households and companies represents about 65 per cent of the total loss of US$8.8 billion. That means that the Government’s direct responsibility is about $3.3 billion of infrastructural damage. The IFI pledges include US$2.4 billion for support to the private losses. However, they do not lend to households or small businesses. Local banks are understandably cautious as existing borrowers may have trouble staying current with loan repayment terms. As such, it will fall to the Government to bridge that gap by accepting risk or providing loans directly.

Third, the maximum that the Government has been able to spend on capital expenditure in a single year is about US$400 million. It is clear that it will not be able to implement more than US$3.3 billion in just three years, unless it adopts new modalities.

In addition to temporary imports of skilled workers, know-how, and equipment, it may be time to consider dedicated, transparent project implementation services like those offered by the United Nations.

As we said, the fiscal discipline we have displayed has opened the door to extraordinary support. We must be careful to ensure we do not run up new debt unless it is for projects that will have direct and positive impacts on households and businesses. Even so, we need to hold back some reserve and keep looking over our shoulder to be ready in case, God forbid, another natural disaster decides to strike while we are digging out of the hole left by Melissa.