Carlo Pettinato, first secretary, European Commission to Jamaica, says the EU could provide an additional €20 million per year for sugar transformation. - File
John Myers, Jr., Business Reporter
The European Union (EU) has increased its aid support to Jamaica for social and economic development programmes over the next five years, under the European Union Development Fund (EDF).
The EU has earmarked more than €100 million ($8.5 billion) over the period, 2008-2013, up from the €70 million ($9 billion) received between 2002 and 2007.
"Our European Development Fund (EDF) envelop for which we fund projects like the Private Sector Development, that part will be significantly increased," first secretary and head of section for economics, trade, politics and information at the European Commission Delegation to Jamaica, Carlo Pettinato, told Wednesday Business.
First tranche
The first tranche of €5.2 million has already been disbursed, €4 million of which is for direct budgetary support to the Government.
The funds being provided under the EDF, he explained, were separate from financing for the transformation of the sugar industry to lessen the impact of the EU's reformation of its sugar agreement with African, Caribbean and Pacific (ACP) countries.
That sugar package has not been finalised, according to Pettinato, who said the provisions are made by the EC in its yearly budget.
"... So we will receive the confirmation of exactly how much we have for Jamaica year by year," he said.
Nevertheless, he said, the support for Jamaica would be about €20 million per year over the period 2007-2010.
Hoping to reshape sector
Jamaica is hoping to reshape the sector into a 'sugar cane' industry, to exploit the potential of ethanol and other by-products.
Currently, the industry is built around the export of raw sugar, with minor ethanol exports. Jamaica has an established rum sector, but that too is facing market pressures.
Pettinato said the EU is to commission a study to assist the Government in implementing the country strategy for sugar's transformation.
Importantly, he pointed out that the EU will be moving away from supervising individual projects and monitoring how funds are spent to providing funds mainly towards budgetary support. In so doing, the Government would be left "entirely in the driver's seat (in) how to use these funds," he said.
Different approach
"We don't want to get into individual projects region by region and looking at exactly how every euro is spent. With bananas it was a very different approach (where) we directly supported the producers."
The EDF, established under the 1957 Treaty of Rome, is the main avenue through which the EU channels development aid to ACP states. It consists of several instruments, including grants, risk capital and loans to the private sector.
In Jamaica, the EDF has provided funding for a number of projects, ranging from private-sector development, disaster relief, HIV/AIDS campaigns, technical cooperation and agricultural development, to roads and infrastructure construction.
Among the notable projects are the Northern Coastal Highway Project (Ocho Rios to Port Antonio segment), the Eastern Jamaica Agricultural Support Project, the Private Sector Development Programme, and the Poverty Reduction Programme.
john.myers@gleanerjm.com
