#Jamaica, May 03, 2018 – Montego Bay – Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says Jamaica has worked too hard and has sacrificed too much to leave itself exposed to a major natural disaster. He said that disasters have a fiscal cost, which can result in unplanned public expenditure, along with a reduction in budgetary revenues.
“Natural disaster can set small countries back for years. Jamaica has done too much, made too many sacrifices to leave us completely exposed in a post-(International Monetary Fund)-programme environment,” he argued.
Dr. Clarke was speaking at the sales congress of the Caribbean Association of Insurance and Financial Advisors (CARAIFA) at the Hilton Resort and Spa in St. James on April 29, where he informed that the Government will be developing a Public Financial Management Policy for Natural Disaster Risk prior to the end of the Precautionary Stand-By Arrangement with IMF.
He said the policy, which will be crafted with technical assistance from the multilateral partners, will be combined with a 10-year operational plan for its implementation that takes into account fiscal space and other limitations.
“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 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,” he said.
Dr. Clarke argued that achieving and maintaining economic independence mean that “we must take account of our realities” and “part of this reality is that based on our location we are subject to natural disasters, and the incidence of these have been increasing over time”.
He informed that the Public Financial Management Policy for Natural Disaster Risk will consider Jamaica’s fiscal realities, “our natural disaster-related fiscal exposure, the pros and cons of various solutions available, our 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,” he added.
He said the policy will also include contingent credit facilities with multilateral institutions, catastrophe bonds, the development of a natural disaster fund, and accessing climate financing for adaptation and mitigation purposes.