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Shaw bashes gov't for seeking expensive loans to pay down Petro Caribe debt

Published:Sunday | June 14, 2015 | 6:37 PM
Audley Shaw

Jamaica's Opposition spokesman on finance is criticising the government's move not to tap cheaper sources of financing the Petro Caribe debt, arguing that the savings could be used to offer disgruntled public sector employees higher wages.

Audley Shaw this afternoon questioned the Government's move to go to international capital markets to finance the Petro Caribe debt.

Shaw suggested that the Government could have sought to borrow the money from the International Monetary Fund (IMF) or World Bank, which offer cheaper financing.

He explained that the Government is borrowing at seven per cent, when it could have received loans at one per cent from the IMF or World Bank. According to him loans, at such a price, would result in the Government making annual interest payments of over J$12 billion, as opposed to J$1.7 billion.

Shaw argued that the Government could have saved about J$10 billion in interest payments if it had borrowed from the IMF or World Bank, which he contended, could have been used to offer public sector employees a 10 per cent wage increase in year one, instead of three and four per cent.