KINGSTON, Jamaica -- The International Monetary Fund announced Monday that debt-swamped Jamaica could receive up to $958 million in a four-year loan package to stabilize the Caribbean country’s limping economy.
In a statement, the Washington-based IMF said it will recommend this new "extended fund facility" for the island to its executive board, which is expected to consider officially approving the deal at a meeting before the end of April.
The IMF said Jamaica has successfully met all mandated prior actions. It says the success of a new program depends on Jamaica’s strengthening of public finances, approving a set of reforms, and debt sustainability, among other measures.
"Recognizing the sacrifice involved for the Jamaican people, the strategy also aims to minimize the impact on the poorest and most vulnerable," the IMF statement said.
Overall, Jamaica’s punishing debt load is over 140 percent of gross domestic product. Roughly 55 percent of government spending goes to whittling it down. With 20 percent going to wages, that leaves just 20 percent for education, health, security and other government functions on the tourism-dependent island of roughly 2.7 million inhabitants.
In February, Jamaica launched a debt-swap program to satisfy conditions to forge a new pact with the IMF and halt what Prime Minister Portia Simpson Miller described as a "serious economic crisis." It was the second debt swap program offered by a Jamaican administration in the last three years.
Shortly after the IMF’s announcement about reaching a pending agreement with Jamaica, the World Bank and the Inter-American Development Bank said they have each preliminarily allocated $510 million in financing over the next four years for the island, supplementing the support provided by the IMF.
Since the global financial crisis started in 2008, the World Bank and its private sector arm have provided roughly $800 million to Jamaica.
The IDB has approved $1.6 billion in loans in that time.
While the economic crisis exacted a heavy toll on the island, Jamaica’s economy has long had one of the world’s slowest growing economies. Many Jamaicans live hand to mouth and the large majority of its university graduates migrate overseas, depriving the country of many of its best and brightest. The Jamaican dollar has been steadily sliding.