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Jamaica not seeking debt relief

Published:Sunday | July 12, 2015 | 11:05 AM
A.J. Nicholson, Jamaica's foreign minister.

The Jamaican authorities say the country, despite having a $2 trillion debt, and a debt-to-GDP ratio of 130 per cent, is not now seeking to get debt relief from its international creditors.

Jamaica is now reviewing proposals made by the Economic Commission for Latin America and the Caribbean (ECLAC), which among other things involves getting multilateral institutions would gradually write off 100 per cent of their debt to small states, contingent on the approval of donors.

"Jamaica hasn't necessarily signed off on this. I don't want anybody to be saying that Jamaica is seeking debt relief, no, no. We are not there yet," Foreign Minister A.J. Nicholson said.

"It is something we are putting forward to the international community. We are not saying we are going to renege on any debt payment of anything like that," the minister added.

Nicholson, in a statement to the Senate on Friday, pointed out that on the eve of the 36th regular Conference of CARICOM Heads of State and Government held in Barbados from July 2 to 4, 2015, a high-level strategic dialogue was convened where the issue of debt relief was discussed.

need for a paradigm shift

Nicholson said that using data from research undertaken by the Commonwealth Secretariat and the Caribbean Development Bank, the Commission pointed out the need for a paradigm shift in how the challenges of countries in the region are viewed.

"The UN, through the Commission, has come to the realisation that it is not possible to use only domestic resources to move Caribbean countries from debt to growth, and with only one per cent of global debt, the region's debt burden is not enough to generate much international concern," Nicholson said.

He said for the five most indebted countries in the Caribbean, including Jamaica, there is no global debt reduction system in place. In 2013, the total debt burden for the Caribbean was US$46 billion.

"This burden has been exacerbated by incidents of natural disasters, which account for US$30 billion between 1990 and 2014. This means that some 65 per cent of that debt is due to the impact of natural disasters. The debt is therefore not exclusively a matter of bad financial management," he said.

Nicholson said the proposal by ECLAC for a debt-relief strategy, which would create more fiscal space and assist member governments in adapting to social, economic and climatic challenges, is welcomed and deemed worthy of serious consideration.

"It will be given the most serious consideration by the Government of Jamaica," Nicholson said.

Opposition Senator Dr Christopher Tufton said he is pleased that the issue of the debt "is at centre and focus of a regional effort and that is a positive thing."

Jamaica's stock of public debt is budgeted to decrease to $2.05 trillion in this fiscal year which represents a reduction of 1.1 per cent when compared to the estimate of $2.07 trillion at the end of March 31, 2015. The projected total debt comprises domestic debt of $1.03 trillion and external debt of $1.02 trillion.