World Bank Approves $192M Project to Strengthen Jamaica’s Private Sector Growth and Disaster Resilience

This newly approved initiative is designed to address these challenges through two main pillars, focusing on enhancing the business environment and boosting economic resilience.

The World Bank Group’s Board of Executive Directors has approved a $192 million Sustainable and Resilient Recovery Development Policy Financing initiative to support Jamaica’s private sector growth and disaster preparedness. This strategic project includes a special contingency option allowing the country to quickly access funds in the event of a disaster, ensuring timely response and recovery efforts.

Jamaica has made significant strides over the past decade, achieving a historic reduction in its public debt-to-GDP ratio, reaching 73.3 percent at the end of the 2023-24 fiscal year—the lowest level in the past 25 years. Despite these advancements, the country continues to grapple with slow economic growth, high levels of informal employment, and vulnerability to natural disasters. The recent impact of Hurricane Beryl in July 2024 underscores Jamaica’s ongoing susceptibility to environmental hazards, which disproportionately affect its most vulnerable populations.

This newly approved initiative is designed to address these challenges through two main pillars, focusing on enhancing the business environment and boosting economic resilience.

Pillar One: Strengthening Jamaica’s Business and Financial Sectors The first pillar of the project supports crucial economic reforms aimed at promoting resilient private sector-led growth and economic diversification. Key areas of focus include:

• Improving Trade Facilitation: Streamlining customs procedures and enhancing digital trade capabilities to boost exports and create opportunities for micro, small, and medium enterprises (MSMEs).
• Advancing Digital Transformation: Strengthening Jamaica’s digital infrastructure, ensuring robust data protection measures, and improving service reliability and accountability in the telecommunications sector.
• Enhancing Financial Sector Stability: Implementing financial reforms to safeguard the economy and promote financial inclusivity, which is essential for sustainable economic development.

Pillar Two: Enhancing Disaster Resilience and Climate Adaptation The second pillar focuses on strengthening Jamaica’s disaster preparedness and resilience to natural hazards. Key initiatives include:

• Establishing a National Natural Disaster Reserve Fund: Providing vital resources to facilitate swift post-disaster recovery efforts.
• Updating Building Codes and Strengthening Infrastructure: Implementing higher design standards for disaster-prone areas, including hospitals and emergency shelters, to improve resilience.
• Incentivizing Renewable Energy Adoption: Amending the Income Tax Act to encourage households to install solar panels, promoting sustainable energy solutions.

“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. “These reforms will also help attract foreign investment, drive private sector development, create jobs, and improve the overall quality of life for Jamaicans.”

This project is financed by the International Bank for Reconstruction and Development (IBRD), the financial arm of the World Bank that supports middle-income and creditworthy lower-income countries. Of the total financing, $150 million will be allocated as budget support, while $42 million will be dedicated to the Catastrophe Deferred Drawdown Option. Additionally, technical assistance for disaster risk management reforms will be funded through a grant from the European Union Resilient Caribbean (EUReCa) Program, reinforcing Jamaica’s commitment to sustainable and resilient development.