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IDB and World Bank prepared to support Jamaica's financial sector recovery

Washington, June 21, 2000 - The managements of the World Bank Group and the Inter-American Development Bank announced today their intention to propose to their Executive Boards a package of financial sector reform loans to the Government of Jamaica.

Subject to the approval of their Boards, the two institutions would provide the Government of Jamaica with a total of about US$300 million (US$150 million each) in fast-disbursing loans, with disbursements likely to begin in the last quarter of calendar year 2000. The purpose of the loan package is to assist with the resolution of liabilities accumulated in the wake of the 1996-97 financial sector crisis, as well as to support reforms aimed at ensuring the long-term sustainability and competitiveness of the financial sector and guarding against any recurrence of crisis.

The managements of the World Bank Group and the IDB are encouraged by the Government of Jamaica’s demonstrated progress over the last two years in establishing macroeconomic and fiscal discipline, as well as by its efforts to address remaining problems in the financial sector. In addition, the Government of Jamaica has had an impressive record of on-time service payments on loans from the international financial institutions. These considerations, together with the macroeconomic framework that the authorities have developed and have requested the staff of the International Monetary Fund to help monitor, provide the basis for the proposed support from the two institutions.

Beyond their intended support for the financial sector, the managements of both institutions are holding active consultations with the Jamaican authorities on their future assistance programs, which are expected to be firmed up shortly, with emphasis on the social sectors.

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