In his presentation yesterday, ‘Driving Growth and Disruption – Strategies for Recovery and Resilience’, Development Bank of Jamaica (DBJ) Managing Director Dr David Lowe outlined the role of the development bank as stabilising liquidity, protecting payrolls, and providing a runway to recovery.

He noted that our new environmental normal included 27 large weather events in the US last year and that disasters cost the Philippines 3 per cent of its gross domestic product (GDP) annually. His key point was that Jamaica will need to market its resilience as a country going forward to attract investment and that Jamaica needs to use climate recovery as a platform for new growth.

In response to a question, he took the opportunity to clarify that of the Jamaican $10-billion programme previously announce by the DBJ, $1 billion would be financed by internal DBJ funds, $3 billion was expected to be allocated by Government next year for the final fiscal quarter, and the rest would be over the following two fiscal years.

Jamaica has never faced a physical and financial challenge of the size of Melissa. Fortunately, as the
Jamaica Observer editorial ‘Now that we have this level of financial support’ on Wednesday argued, the speed and size of the Marshall Plan-type support of US$6.7 billion from the development community is both historic and clearly due to Jamaica’s new reputation for fiscal discipline.

It is particularly encouraging that Jamaica has managed to mobilise an unexpected US$1 billion from the Development Bank of Latin America and the Caribbean (CAF), from which Jamaica has not previously borrowed and with which Jamaicans will be less familiar.

It has long been clear that Jamaica needs to integrate its capital and other financial markets more closely with the Dominican Republic and Central America to achieve greater scale. And while it is not part of this package, the African-based regional development bank, Afrexim, has promised billions more, mainly for private sector lending, as well as providing an interesting model for Jamaica, and indeed the region, to look at.

Out of the estimate of total physical losses by the World Bank of US$8.8 billion, the Government has direct responsibility for about $3.3 billion of infrastructure damage, which should, therefore, be fully financed by the US$3.6 billion in direct on government balance sheet loans, of which CAF is a key part.

The more complex piece to get right of the $US6.7 billion is the US$2.4 billion for support for investments by the private sector from the International Finance Corporation (IFC) and IDB Invest, as they do not lend to households or small businesses who most need the help. This means we need to think creatively about how institutions, such as the DBJ, can help by accepting risk or providing loans directly as part of an expanded menu of public-private partnerships.

And most importantly, we need to get the newly floated National Reconstruction and Resilience Authority (NRRA), based, according to the Prime Minister Dr Andrew Holness, on a World Bank concept note, moving fast. Perhaps Minister Audrey Marks’s recent trip to Estonia, where digitisation allows development approvals within 30 days, will help.

Keith Collister