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IDB plans to approve $600 million in loans to Jamaica during 2010

KINGSTON, Jamaica – The Inter-American Development Bank stands ready to support Jamaica with an exceptional program of $600 million in loans during 2010, IDB Executive Vice President Daniel Zelikow said today.

Zelikow met with Jamaican Prime Minister Bruce Golding and the Minister of Finance and the Public Service Audley Shaw to congratulate them for actions taken to deal decisively with the country’s fiscal challenges. Jamaica has executed a voluntary debt swap, reached a Stand-By Arrangement with the International Monetary Fund (IMF), and obtained support from the principal multilateral institutions for its economic reform program.

“The success of this debt swap is a testament to the investment community’s confidence in Jamaica’s plan for improving debt dynamics,” said Zelikow. “Jamaica is now in a position to stabilize its finances, accelerate its economic recovery, attract increased investment and generate more jobs. The IDB is committed to support this new chapter in Jamaica’s development with one of the largest lending programs we have ever approved, relative to a country’s GDP.”

Jamaica’s voluntary debt swap registered a participation rate of more than 99 percent and resulted in a significant reduction in interest rates and extension of debt maturities. Fiscal savings resulting from the swap will exceed over 3 percent of Jamaica’s GDP in the first year.

The IDB is supporting several aspects of Jamaica’s reform agenda, including improvements in fiscal management and the introduction of fiscal responsibility legislation, initiatives to enhance information in credit markets and remove distortions in the tax system, and support for social programs such as the PATH cash-transfer mechanism.

The IDB has already approved some $200 million in new loans to Jamaica this year, in programs that will also support reforms in education and boost economic competitiveness. The Bank plans to approve an additional $400 million in financing this year as Jamaica continues to progress with the reform agenda and meets the targets set out in the IMF Stand-By Arrangement.

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