Jamaica developing disaster risk financial management policyTuesday, May 01, 2018
JAMAICA will develop a public financial management policy for natural disaster risk, combined with a 10-year operational plan for its implementation that takes into account fiscal space and other limitations, according to Finance Minister Dr Nigel Clarke.
The policy, he explained, will be developed with technical assistance from Jamaica's multilateral partners before the end of the precautionary stand-by arrangement with the International Monetary Fund (IMF).
Clarke made the announcement in his address to the 32nd Annual Sales Congress of the Caribbean Association of Insurance and Financial Advisors in Montego Bay Sunday night.
He noted that in achieving and maintaining economic independence Jamaica must take account of its realities and pointed out that taking ownership means taking responsibility.
A part of this reality, he said, is that, based on the island's geographic location, it is subject to natural disasters and the incidences of these have been increasing over time.
“Today, and for the next 18 months, Jamaica is in a precautionary stand-by arrangement with the IMF. Within the context of this programme with the fund, we have access to significant resources should we need them. As we move towards the end of this programme relationship with the IMF, with the commensurate stand-by line of credit that it offers, it is important that we consider measures that can moderate the fiscal impact of natural disasters,” Clarke said.
He made the point that natural disasters have a fiscal cost which can result in unplanned public expenditure along with a reduction in budgetary revenues.
While noting that Jamaica will not be able to insulate itself completely, Clarke stated that “natural disasters can set small countries back for years. Jamaica has done too much, made too many sacrifices to leave us completely exposed in a post-programme environment”.
He explained that the public financial management policy for natural disaster risk will consider Jamaica's fiscal realities, natural disaster-related fiscal exposure, the pros and cons of various solutions available, the island's resource envelope and existing literature.
The policy will improve understanding of fiscal risks of natural disasters and recommend appropriate public financial management for natural disaster risk, including the implementation of various financing strategies, Clarke added.