BBC Caribbean
May 8, 2004

UK writes off a portion of Jamaica's debt

The United Kingdom has written off J$1billion of the debt owed to it by Jamaica.

The announcement was made on Friday by Peter Mathers, Britain's High Commissioner to Jamaica at a briefing hosted by the Jamaica's Finance Minister Omar Davies.

This cancellation brings to J$4 billion the total debt relief the UK has given Jamaica since 1997.

The United Kingdom's decision to write off the J$1 billion debt was the result of the Jamaica government’s efforts to reform the public sector, reduce poverty and improve national security.

The British High Commission said Jamaica received the write off so that the government "can develop medium-term socio-economic policy framework which will provide the leeway within which it can make policy decisions."

Audley Shaw, the opposition spokesman on finance said if the amount written off was programmed in the recently-announced Budget, "the Government now has more resources which it could use to address pressing house-keeping matters."

No spare cash

However, director-general of the Planning Institute of Jamaica was quoted in the Jamaica Gleaner as saying that the debt cancellation forms part of the $J4.5 billion grant the government placed in the budget for the financial year, so there was no excess cash waiting to be used.

"This is just, in a sense, the first instalment of the expected grant portion," he said, adding that grants can come in the form of debt cancellations. "There's no guarantee the other rest will come, but we are hopeful it will," he said.

The debt relief is provided under the Commonwealth Debt Initiative (CDI) which was launched in October 1997 by Gordon Brown, Chancellor of the Exchequer.

The CDI aims to provide additional relief in respect of government-to-government loans to low and middle-income countries in the Commonwealth.

CDI funds are also given to Commonwealth countries which promote transparent and accountable government, and pursue economic policies that encourage sustainable development.