US$14.85-m grant to shore up Ja’s resilience to natural disastersPosted On: Oct 25, 2019
JAMAICA is set to receive a multimillion-dollar grant from the Global Risk Financing Facility (GRiF) to support the expansion of its financial protection against natural disaster risks.
The grant, valued at US$14.85 million, was announced by World Bank country director for the Caribbean, Tahseen Sayed, at the ‘Learning from Jamaica’s Economic Turnaround’ event, during the World Bank-International Monetary Fund Annual Meetings 2019.
A joint release from the Ministry of Finance and the Public Service and the World Bank yesterday said GRiF is a multi-donor trust fund housed at the World Bank, which is supported by Germany and the United Kingdom. The release said Jamaica’s grant represents the largest made by GRiF to a middle-income country.
Also speaking at the event was Minister of Finance and the Public Service Nigel Clarke, who presented on the lessons from Jamaica’s success in reducing public debt by almost 50 percent of the gross domestic product in six and a half years, while reducing unemployment and inflation to historically low levels.
According to the release, despite Jamaica’s fiscal achievements, the country remains vulnerable to natural disasters and extreme weather events that could threaten the macroeconomic outlook and fiscal gains.
“Approximately 18 months ago we set out our policy to take a multilayered and strategic approach to protect Jamaica against the potential fiscal shocks that can be caused by natural disasters. In March we began the capitalisation of a Natural Disaster Fund with a historic allocation, even as we finalised our application, with World Bank assistance, to the GRiF.
“Assistance from the GRiF is crucial, as the most significant of the layers involve low-frequency, high-severity events that can be covered, in part, by risk transfer instruments such as a catastrophe bond, which require premiums to be paid and hence fiscal space,” Clarke said. “This GRiF grant is therefore highly appreciated, as it makes the goal of multilayered coverage more realisable by assisting Jamaica in covering the premium cost of a risk transfer instrument.”
Recognising the risk of natural disasters, the release said the Government has embarked on an ambitious reform programme — combining expanded financial protection against disasters with fiscal and public financial management reforms designed to enhance resilience.
“This GRiF grant bears testimony to Jamaica’s strong progress in building fiscal and financial resilience,” said Sayed. “The World Bank remains committed to deepening its partnership to help the country in its efforts to sustain these hard-won gains.
“We are pleased that the GRiF grant is one part of a package of new support provided by the World Bank, which includes US$140 million for fiscal resilience, growth and enhancing social safety nets,” Sayed continued.
The World Bank, with support from the United Kingdom, is providing technical assistance for Jamaica’s preparation of a National Disaster Risk Financing Policy. The World Bank is also working with the Jamaican Government on risk modelling, which could be used to access risk insurance through the capital markets.
GRiF is supported by Germany and the United Kingdom to strengthen the financial resilience of vulnerable countries, by enabling earlier and more reliable responses and recovery from climate shocks, disasters, and crises, the release said. Within the World Bank, it is managed by the Disaster Risk Financing and Insurance Program and the Global Facility for Disaster Reduction and Recovery. It supports the establishment of pre-arranged risk financing instruments, including market-based instruments like insurance.
GRiF contributes to the goals of the InsuResilience Global Partnership, as set out in its Vision 2025, the release said.
Original article can found on The Jamaica Observer