Opposition senator warns Middle East war could impact govt’s post-Melissa plans

KINGSTON, Jamaica — Opposition Senator Maziki Thame has warned that the ongoing war in the Middle East could have a negative effect in terms of the availability of funding for the Government’s ambitious reconstruction agenda in the aftermath of Hurricane Melissa.

Thame gave the warning on Friday during her contribution to the debate on the National Reconstruction and Resilience Authority (NaRRA) Bill.

NaRRA is the body established by the Dr Andrew Holness-led Government to lead the reconstruction efforts in the wake of the US$12.2 billion in damage left by Hurricane Melissa, which slammed into southwestern parishes last October.

Thame spoke mockingly about the US$6.7 billion (approximately J$1 trillion) that the Government has repeatedly boasted it has secured from multinationals, nearly 60 per cent of which represents loans, to drive the reconstruction.

“[The say] billions, nay trillions in Jamaican dollars are expected to flow down the Black river, flooding the Pedro Plains and making the hills of St Andrew joyful together,” she remarked.

“We are expected to believe the nation will be transformed into a paradise of plenty at warp speed under FAST, the expedited pathway through Jamaica’s regulatory approval process,” she added. The Facilitated Acceleration of Strategic Transformation (FAST), is the complementary body to the NaRRA that will facilitate projects of US$15 million ($2.4 billion).

Thame argued that Jamaicans were told all along that the problem was never that “Jamaica lacked for investor interest, but that our positives were too slow to be attractive to investors.

“In other words, the government blames the inefficient bureaucracy for being a hindrance and for stymieing progress. But now with FAST in play, diaspora investors, regional partners and mid-scale international capital will be rushing to save the day”.

The Opposition Senator noted that the US$6.7 package was touted by Education Minister Senator Dr Dana Morris Dixon who piloted the NaRRA Bill, as an “extraordinary achievement and a testament to the fiscal credibility that Jamaica has built over a decade”. She cautioned that it should be noted that the sums include “the good people of Jamaica’s own money”, which is made up of US$37 million from the Contingency Fund and the Natural Disaster Reserve Fund, US$91 million from the Caribbean Catastrophe Risk Insurance Facility and US$150 million from the insurance proceeds of the catastrophe bond. She said the remaining 58 per cent of the total represents loans of US$3.9 billion from the World Bank, Inter-American Development Bank (IDB), International Monetary Fund and the Caribbean Development Bank.

Thame told the Senate that US$2.4 billion of the amount or 36 per cent of the total is in the form of private investments which the IDB and World Bank have indicated they were “working to attract and mobilise to support Jamaica’s recovery and reconstruction.

“Are they still working,” Thames asked rhetorically. “And how will worsening economic conditions from the Israeli/US war on Iran impact our prospects?” she added.

She cited that Energy Minister Darly Vaz has described the scenario as “frightening’. And she said the World Bank recently noted that an unforeseen tightening of financial conditions globally could curb credit growth and business investment.

“Is the Government being forthcoming with the Jamaican people on the state of the US$6.7 billion?” she questioned.

Senator Thame highlighted that the Planning Institute of Jamaica has estimated the total hurricane damage at US$12.2 billion. She questioned whether the Government needs a larger sum than the US$6.7 billion.

“We’re told that a shortfall of US$5.5 billion in funding to match the budget will be made up with local, international and diaspora investment. [But] at a time of global uncertainty, war and stagflation, the Holness reconstruction and resilience plan appears to be based on the assumption that local and foreign investment will be available at several times the level at which it had ever previously been available, and further still, that this investment will bring it jobs, skills and technology transfer,” Thame said.

“Is this reasonable? Is the government offering merely a promise and another 5 in 4? A 6 for a 9? We will know in 10 years whether this is another 5 in 4,” she concluded.