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Jamaica: Staff Report for the 2008 Article IV Consultation—Informational Annex

International Monetary Fund
Published Date:
June 2008
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Appendix I. Jamaica—Fund Relations

(As of January 31, 2008)

I. Membership Status: Joined: February 21, 1963; Article VIII

II. General Resources Account:

SDR Million% Quota
Fund holdings of currency273.55100.02
Reserve position0.000.00
Holdings exchange rate

III. SDR Department:

SDR Million% Allocation
Net cumulative allocation40.61100.00

IV. Outstanding Purchases and Loans: None

V. Latest Financial Arrangements:



Date -
Amount Approved

(SDR Million)
Amount Drawn

(SDR Million)
EFFDec. 11, 1992Mar. 16, 1996109.1377.75
Stand-ByJun. 28, 1991Sep. 30, 199243.6543.65
Stand-ByMar. 23, 1990May 31, 199182.0082.00

VI. Projected Payments to Fund:

(SDR Million; based on existing use of resources and present holdings of SDRs):


VII. Implementation of HIPC Initiative: Not Applicable

VIII. Implementation of Multilateral Debt Relief Initiative (MDRI): Not Applicable

IX. Exchange Rate Arrangements:

The external value of the Jamaican dollar has been determined in an interbank market operated by commercial banks beginning September 17, 1990. The Jamaican dollar has depreciated significantly since then, though not in a uniform trend. At January 31, 2008 it was trading at around J$71½ to the U.S. dollar.

X. Last Article IV Consultation and Program Relations:

Jamaica is under intensified surveillance whereby staff monitors the implementation of the economic strategy formulated by the authorities without reaching prior understandings with the Fund. The last Article IV consultation was completed by the Executive Board on April 30, 2007 (Country Report No. 07/152). Interim staff reports are prepared for information of the Executive Board in-between Article IV consultations (Country Report No. 06/324, Country Report No. 05/61, and Country Report No. 05/219).

XI. Technical Assistance:

LEG/MCMFebruary 2008Financial Sector Regulatory and Supervisory Frameworks
FADSeptember 2006Tax and Customs Administration
MAEMay 1995Review of deposit insurance scheme
October–December 1995Banking supervision
February–June 1996Banking supervision
September 1996Banking crisis and restructuring
October 1996Banking supervision
February 1997Central bank accounting
May 1997Banking supervision
August 1997Banking supervision
January 1998Banking supervision
April 1998Public debt management
May 1998Financial sector restructuring
April 2001Banking supervision
January 2002Banking supervision
STASeptember 1996Multisector statistics assessment
July 2002Organization of Statistics Office

XII. Resident Representative:

The post of the resident representative was closed on August 1997.

Appendix II. Jamaica—Relations with the World Bank

(As of February 29, 2008)

The new Country Assistance Strategy (CAS) for Jamaica was discussed by the WB Board of Executive Directors on May 10, 2005. The document proposes financial assistance of up to US$150 million between 2006 and 2009, as well as technical and advisory services. The CAS will support the Government’s own Medium Term Socioeconomic Policy Framework for 2004-2009 with lending, analytical, and technical assistance to accelerate inclusive economic growth, improve human development and opportunity, and help prevent and reduce crime. It was prepared in collaboration with the government and was widely consulted and discussed with other donors, representatives of the private sector, CBOs, Chambers of Commerce, trade unions, and academic institutions. As part of the assistance program, the Bank will undertake analytical work including a Poverty Assessment, a Financial Sector Assessment Program (jointly with the International Monetary Fund), a Country Fiduciary Assessment (jointly with the Inter-American Development Bank), and a Diagnostic of the Investment Climate. The Bank Group assistance program will include support from the International Finance Corporation (IFC), focused on investment in infrastructure, the financial sector, services and other sectors, and the Multilateral Investment Guarantee Facility (MIGA), focused on development of the financial sector and key infrastructure.

A. Projects

The Jamaica Reform of Secondary Education Project II was approved in March 2003 for US$39.8 million. In support of Jamaica’s fifteen-year program to reform secondary education, the Project will improve the quality, and equity of secondary education, and expand access to upper secondary education, as well as strengthen the capacity of the central ministry, and regional offices to manage, and monitor the reform. The components of the Second Reform of Secondary Education Project will: 1) finance grants to selected secondary schools, on the basis of annual work programs, and budgets for activities designed to improve student outcomes, as well as direct costs associated with preparing, and implementing school improvement plans. Technical assistance will support the preparation of a school improvement plan manual, and training materials, while training assistance in school development, and management will be provided; 2) finance centrally coordinated activities that complement the bottom up approach, and support all-age schools not eligible for school improvement grants (SIGs), to rally national literacy programs, and mathematics, by providing tools for teachers to diagnose the specific learning problems, enriching libraries and media centers, and supporting counseling for at-risk youths; 3) provide access to upper secondary school, by securing excess capacity in independent secondary schools, through construction of new schools, and extension of existing selected schools; and, 4) support the Ministry of Education, and regional offices in the implementation of the above components, as their role shifts from centralized, to one responsive to school-based demands for technical assistance, and continuous support on monitoring outcomes.

The Jamaica HIV/AIDS Prevention and Control Project was approved in August 2002 for US$15 million. The HIV/AIDS Prevention and Control Project for Jamaica is part of the Second Phase Multi-Country HIV/AIDS Prevention and Control Adaptable Program Lending (APL) for the Caribbean Region, which provides loans and/or credits to governments in the Region to finance their HIV/AIDS programs. Jamaica has met the five eligibility criteria for country participation. This project aims to support selected activities of Jamaica’s HIV/AIDS National Strategic Plan (NSP). Using a multi-sectoral approach, it assists the Government of Jamaica in curbing the spread of the HIV epidemic through 1) the expansion of preventive programs targeted to high-risk groups as well as the general population; 2) the strengthening of treatment, care, and support for persons living with HIV/AIDS (PLWHA); and 3) the strengthening of Jamaica’s multisectoral capacity to respond to the epidemic

The Jamaica Social Safety Net Project was approved in February 2002 for US$40 million. The Social Safety Net Project is supporting the Government’s efforts to transform the social safety net into a fiscally sound, and efficient system of social assistance for the poor, and vulnerable groups. The components will: 1) finance conditional grants for poor children (up to age 17), eligible under the program. Direct costs regarding schooling, and health care delivery will be financed by those grants, conditioned on regular health clinic visits for children up to the age of six not enrolled in school, and for children on school attendance up to the age of seventeen; 2) finance conditional grants to poor pregnant/lactating mothers, elderly poor over the age of sixty-five, and poor disabled, and destitute adults under the age of sixty-five, eligible under the program. Benefits will be conditional on regular health clinic visits for adult beneficiaries; and, 3) strengthen the institutional capacity of the Ministry of Labor and Social Security, and institutions involved in the operation, and streamlining of the social safety net in Jamaica. Support will be provided for enrollment mechanisms of temporary employees, hired for data processing, including as well the financing of the necessary technology information equipment, and software. Technical assistance, will support implementation of the scoring formula, based on data from the Survey of Living Conditions, namely at the early stages, when the scoring formula will require periodic review, and refinement. Also included are training, and promotion assistance, project management costs, and, monitoring, and evaluation systems.

The Jamaica National Community Development Project was approved in April 2003 for US$15 million. The National Community Development Project aims at providing basic services and creating temporary employment opportunities for the poorest groups in Jamaica. To this end, several subprojects have been identified as priority by these communities for funding by the Jamaica Social Investment Fund (JSIF). The project components include: 1) financing of demand-driven, and community-implemented socioeconomic infrastructure works, and activities, through subprojects that include construction, and rehabilitation of basic infrastructure, and social super-structure facilities. Community assessments will be implemented, to ensure appropriate skills (or ability to acquire skills), and resources availability to manage the proposed community-contracted works; 2) financing for technical assistance, training, and strengthening programs to JSIF, and the various entities to be involved in the project, particularly to support the Community Based Contracting (CBC) system. Financing will also be provided for additional consultants to support implementation of community contracting; and, 3) funding for goods required to facilitate subproject supervision, monitoring, and community training.

The Jamaica Inner City Basic Services for the Poor Project was approved in March 2006 for US$29.3 million. The project development objective is to improve quality of life in 12 Jamaican inner-city areas and poor urban informal settlements through improved access to basic urban infrastructure, financial services, land tenure regularization, enhanced community capacity and improvements in public safety. Specifically, the project will: (a) increase access and improve the quality of water, sanitation, solid waste collection systems, electricity, roads, drainage and related community infrastructure for over 60,000 residents of poor urban informal settlements through capital investments and innovative arrangements for operations and maintenance; (b) facilitate access to microfinance for enterprise development and incremental home improvement for entrepreneurs and residents in project areas; (c) increase security of tenure for eligible households in project areas; and (d) enhance public safety through mediation services, community capacity building, skills training and related social services.

B. Economic and Sector Work

During 2003 and 2004, the Bank prepared a Country Economic Memorandum focused on issues related to accelerating inclusive economic growth and, during 2004 and 2005, a Public Expenditure Review examining public expenditure allocation priorities and public sector reform issues in Jamaica’s tight fiscal environment. In addition, a study on growth and competitiveness issues in the Caribbean recently completed by the Bank provides the Government with insights and policy recommendations for improving the competitiveness of the economy. The dissemination of these reports represented a key instrument for policy discussion with the Government on the country’s development priorities and the Bank’s assistance strategy.

A Poverty Assessment currently under preparation will provide an updated assessment of poverty levels and will focus on poverty and the labor market, and the link between crime and violence and poverty. Work on a Country Fiduciary Assessment (CFA), in collaboration with the Inter-American Development Bank, is underway to help strengthen public financial management and procurement. It will also help to provide a sound basis for the harmonization and alignment with the country’s procurement and financial management systems. To help create a positive enabling environment for private sector driven growth, the Bank is also undertaking a Diagnostic of Investment Climate which will provide policy recommendations complementary to the recently completed study on growth and competitiveness issues in the Caribbean.

The Bank will continue the informal monitoring of macroeconomic developments given the vulnerability of the economy. This will be done within the context of the results based monitoring framework agreed between the Government and the donors. In addition, the Bank will undertake just-in-time policy notes to follow-up on specific findings and recommendations of the studies undertaken during the CAS period and other issues jointly identified with the authorities.

In addition to the country specific analytical work, Jamaica will benefit from ongoing and planned regional studies. A Caribbean regional study on Crime, Violence and Social Exclusion would focus on the impact of crime on tourism, investment, poverty, and social cohesion. This would be a multi-sectoral endeavor aimed at developing recommendations that would draw on experience from successful interventions in Brazil and elsewhere. The Bank has completed a Social Protection Strategy Review paper for the Caribbean, including a focus on Jamaica. The objective of the strategy is to strengthen the Bank’s ability to support clients on social protection through: (i) better understanding the key socio-economic risks, existing country-level social protection programs, coverage and implementation gaps, and outstanding country-level needs; (ii) stronger coordination with country counterparts and donors; and (iii) more strategic emphasis on the Bank’s comparative advantage in the region. A Caribbean regional study on Migration, Remittances and the Diaspora will examine the impact of migration and its implications for public policy decisions surrounding the financing of higher education and skills development; the impact, facilitation, and potential leverage of remittance flows; and the potential for the growth of niche markets among the diaspora. This work will be undertaken in close collaboration with other donors, most notably the IDB. Additional planned regional studies cover issues related to pension reform, health financing, and the infrastructure and financial sectors

C. Financial Relations1

(In millions of U.S. dollars)



National Community Development Project15.02.512.5
JM - Reform of Secondary Education Project II39.87.35.2*
JM – Inner City Basic Services for the Poor Project29.328.40.9
HIV/AIDS Prevention and Control Project (Second Phase)
Social Safety Net Project40.012.126.8

Amounts may not add up to Original Principal due to changes in the SDR/US exchange rate since signing.

Project restructured.

Amounts may not add up to Original Principal due to changes in the SDR/US exchange rate since signing.

Project restructured.

Disbursements and Debt Service(Fiscal Year Ending June 30)
Interest and fees22.821.620.321.918.917.520.521.6

Appendix III. Jamaica—Relations with the Inter-American Development Bank

Jamaica joined the Inter-American Development Bank (IDB) in 1969. Since then, the IDB has approved 96 loans (81 projects) to Jamaica amounting to US$1.8 billion and 195 technical cooperation operations totaling US$63.3 million. IDB financial assistance has supported a wide range of infrastructural, environmental and social sector projects with a view to enhancing Jamaica’s human resource and absorptive capacity and strengthening the foundation for private sector-led growth. In addition, the IDB has supported reforms aimed at strengthening the institutional and regulatory environment.

The IDB is the leading lender to Jamaica among multilateral development partners. As of February 2008, Jamaica’s outstanding debt to the IDB stood at US$ 583.2 million, of which US$581.8 million were public sector loans and US$1.4 million were loans to the private sector. The total represents twelve percent of public external debt and thirty-five percent of multilateral debt. Clearly, the IDB’s share of total public external debt—like that of most other multilateral and bilateral agencies—has declined since 2003.

Table 1.IDB Outstanding Debt
TypeAmount (US$m.)
Public Sector581.8
Private Sector1.4
Total Debt Outstanding583.2

As of February 2008, the Bank’s portfolio consisted of 10 investment loans1 valued at US$217 million, and 31 non-reimbursable technical cooperations valued at US$10.3 million. Fifty-six percent of the IDB project funds and fifty percent of the TC funds have been disbursed, leaving US$ 86.7 million available for disbursement.

Table 2.Major Ongoing Projects
Project CategoryNumberAmount (US$m.)Percent Disbursed
Projects in execution921257
Private sector loans15.00
IIC loans840.8 1/22
TCs in execution3110.350

Approved amount.

Approved amount.

Over time, growing government current expenditures have crowded out capital expenditures that caused budgetary allocations to IDB-supported projects to fall far short of that needed for a normal pace of implementation, particularly in the period from 2002/03 to 2004/05. Due to delayed project execution, many assumptions made in the original design of operations became outdated and, coupled with weak advocacy as well as poor implementation capacity, project execution delayed even more and the achievement of development objectives came under threat.

Table 3.Number of Projects by implementation Progress Category
Highly Satisfactory00000
Very unsatisfactory00201

In recognition of this, the government and IDB have collaborated to rationalize the portfolio through partial cancellation of loans without affecting the initial development objectives. From the end of 2004 to end of 2006, the government and IDB agreed to cancel a total US$59.8 million in loan resources, spread over several operations. In addition to this, the Bank initiated a focused and sustained campaign to divert fiscal resources to the portfolio coupled with the reformulation of a number of operations by removing outdated design elements. These efforts, as well as intensified support to executing agencies, evidently resulted in an improved pace of project implementation in 2007 (Table 3).

In August 2006, the IDB approved a new country strategy for the 2006-2009 period. In view of the aforementioned fiscal space issue, the new strategy de-emphasizes public sector investment lending and instead focuses on policy-based lending, grant modalities, and lending to the private sector. The principal areas of focus are: (i) private sector development; (ii) value for money; and (iii) reducing vulnerability to natural disasters.

Growing repayments from lending in the late 1990s and the constraints on disbursements on investment projects have resulted in negative net loan flows since 2005 (Table 4).

Table 4.Net Flow of IDB Convertible Currencies(US$ million)
a. Loan disbursements26.480.812.825.934.3
b. Repayments (principal)52.752.351.264.183.5
c. Net loan flow (a–b)-26.328.5-38.4-38.2-49.2
d. Interest and charges31.229.129.828.027.1
e. Net cash flow (c–d) 1/1-58.5-2.7-73.6-70.6-78.1
Table 5.Total Projected Debt Service, 2008-2012(Millions of U.S.dollars equivalent)

Appendix IV. Jamaica—Statistical Issues

Effective surveillance is hampered by data gaps for the financial sector outside of commercial banks, and for public entities outside of the central government. In early 2003, Jamaica started participating in the Fund’s General Data Dissemination System (GDDS), which provides participants with a framework for the development of the statistical system. Jamaica should now focus its efforts on improving its data and dissemination practices by moving towards the goal of subscribing to the Special Data Dissemination Standard (SDDS) over the medium term. No data on industrial production, wholesale or producer prices, import volumes, or export and import prices have been reported for publication in the International Financial Statistics (IFS) in recent years.

Key websites for statistics on Jamaica:

Bank of Jamaica:
Ministry of Finance and Planning:
Planning Institute of Jamaica:
Statistical Institute of Jamaica:

There are significant weaknesses in the national accounts and other real sector data. In regard to GDP estimates, concerns relate both to level and growth rate. Addressing these shortcomings has been hindered, inter alia, by insufficient legal authority granted to the Statistical Institute of Jamaica (STATIN) to collect source data, as well as by institutional weaknesses, and a lack of resources. However, efforts are being made to improve the national accounts, including through updating the base year (currently dating back to 1996) and implementing the 1993 System of National Accounts (SNA93). Assistance on national accounts methodology has been provided by Statistics Canada and STA. The first publication of quarterly national accounts took place in August 2002.


Jamaica (with assistance from the IMF Caribbean Regional Technical Assistance Center, CARTAC) revised its consumer price index (CPI) series in 2007. The CPI revision updated expenditure weights of the CPI that had dated from 1984. The new CPI weights are based on a household survey conducted in 2004-05.

Government finance statistics

Central government operations and debt data are updated on a monthly basis. Some expenditures, however, are not recorded during the period they actually occur, making it difficult to asses the fiscal policy stance. Also, data on public entities outside the central government, although regularly published, are not reported consistently across entities and in a way that is amenable to assessing and formulating the overall direction of fiscal policy.

There is a paucity of data on the external debt stocks and maturities falling due for the nonfinancial public sector.

Government finance statistics are available at:



However, fiscal data are not currently reported for publication in the IFS. In 2007, the authorities reported data for 2006, in GFSM 2001 format, for publication in the 2007 GFS Yearbook.

Monetary and financial statistics

Monetary statistics published by the Bank of Jamaica (BOJ) are sectorized, classified, and valued in accordance with international standards, and are provided to the Fund in a timely manner. Currently, information on deposit money banks and monetary authorities is being reported on a regular basis. The BOJ initiated the submission of monetary and financial statistics based on standardized report forms in March 2007. Financial sector statistics outside of the banking system are weak. The absence of adequate data on security dealers is particularly problematic, as dealers’ liabilities to the public are larger than those of banks. Consequently, related systemic implications are difficult to assess without timely and comprehensive statistics.

Balance of payments

The BOJ compiles and disseminates balance of payments statistics on a monthly and annual basis. Detailed annual balance of payments and international investment position (IIP) data are reported by the BOJ for publication in the Balance of Payments Statistics Yearbook (BOPSY) and the IFS. In September 2007, Jamaica reported for the first time IIP data to STA; annual IIP data since 2005 are now available in BOPSY and IFS.

Jamaica: Table of Common Indicators Required for Surveillance As of March 21, 2008
 Date of latest








Exchange Rates11/071/08DDD
International Reserve Assets and Reserve Liabilities of the Monetary Authorities111/0701/08MMM
Reserve/Base Money11/072/08MMM
Broad Money11/072/08MMM
Central Bank Balance Sheet11/072/08WWW
Consolidated Balance Sheet of the Banking System11/072/08MMM
Interest Rates211/072/08MMM
Consumer Price Index02/083/08MMM
Revenue, Expenditure, Balance and Composition of Financing3 – General Government402/0703/07MMM
Revenue, Expenditure, Balance and Composition of Financing3 – Central Government02/0703/07MMM
Stocks of Central Government and Central Government-Guaranteed Debt502/0703/07MMM
External Current Account Balance20069/07MMM
Exports and Imports of Goods and Services20069/07MMM
Gross External Debt02/0703/07MMM

Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), and state and local governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).

Includes reserve assets pledged or otherwise encumbered, as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds), and state and local governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I); Not Available (NA).


Including private sector loan but excluding IIC

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