The World Bank Group's Board of Executive Directors has approved a new project aimed at supporting Jamaica in its efforts to promote private sector development and improve disaster preparedness. The initiative, titled the Sustainable and Resilient Recovery Development Policy Financing, involves an investment of $192 million. A notable feature of this project is a special option that allows Jamaica to quickly access funds in the event of a disaster.
Jamaica has achieved significant progress over the past decade by reducing its public debt-to-GDP ratio to 73.3 percent by the end of 2023-24, marking the lowest level in 25 years. However, challenges remain, including slow economic growth, high informal employment rates, and vulnerability to natural hazards. Recent events like Hurricane Beryl in July 2024 have underscored these vulnerabilities.
The project focuses on two main pillars: enhancing Jamaica’s business environment and boosting resilience against disasters. The first pillar includes improving trade facilitation, adopting digital technology, and strengthening financial sector stability—key factors for resilient private sector-led growth and economic diversification. This involves reforms such as streamlining customs procedures and enhancing digital trade capabilities to create opportunities for micro, small, and medium enterprises.
The second pillar aims at increasing Jamaica's resilience through measures like establishing a National Natural Disaster Reserve Fund for post-disaster recovery resources. It also supports developing updated building codes for disaster-prone areas and incentivizing households installing solar panels through amendments to the Income Tax Act.
"Bolstering growth prospects, building resilience against natural hazards, and protecting the most vulnerable – measures supported by this financing – are key priorities for Jamaica," said Lilia Burunciuc, World Bank Country Director for the Caribbean. "They are also essential steps to allow the country to attract more foreign investment, boost private sector growth to create jobs and improve the quality of life of its people."
The International Bank for Reconstruction and Development finances this project with $150 million allocated as budget support and $42 million designated for the Catastrophe Deferred Drawdown Option. Additionally, technical assistance under the second pillar will be funded by a grant from the European Union Resilient Caribbean (EUReCa) Program.