Three main points: 1. Jamaica relies on various official and unofficial sources for development financing, including loans, bonds, grants from multilateral institutions, foreign direct investment, remittances, and domestic loans. 2. Loan flows and grants have been the most stable sources of official financing since the financial crisis, while bond flows exhibited more volatility. Multilateral partners including the IBRD, IDB, and CDB have provided significant loan support. 3. Other sources like FDI, remittances, and domestic loans have also financed development, though private capital flows have been less stable. Efforts to improve access to global capital markets have helped narrow Jamaica's bond spread relative to emerging markets.

1. Financing Development in Jamaica
A Panoramic View:
Opportunities, Challenges and New
Paradigms
Jide Lewis, CFA, FRM
1

2. Official External Sources of
Development Financing

3. Official Sources of External
Financing (Annual Profile)
-3.1
-4.9
-3.4
1.3
-1.2
-4.6
-0.1
-0.7 -0.4
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
CY2012 CY2013 CY2014
PercentofGDP
Government loan flows Government Bond flows Official Grant Flows
INFLOWS (-)
OUTFLOWS (+)
Three main sources of
official external financing
[Loans, Bond and Grants]
have played an integral
role in Jamaica’s
development agenda.
Loan flows, with the
exception of 2014, have
represented to the largest
source of official financing.
Bond flows has re-
emerged as a main
source of financing in
2014

4. Official Sources of External
Financing (Quarterly Profile)
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2012:Q2 2012:Q3 2012:Q4 2013:Q1 2013:Q2 2013:Q3 2013:Q4 2014:Q1 2014:Q2
PerCentofGDP
Govt. Portfolio Securities Govt. Loans Official Grant Flows
NET CAPITAL OUTFLOWS
CAPITAL INFLOWS
Bond flows, however,
has exhibited much
volatility in the
aftermath of the global
financial crisis.
Loans flows and Grant
flows from Multilateral
Financial Institutions
have been much more
stable over the last two
years.

5. Official Loan Flows by Multi-Lateral
Financial Institution (MFIs)
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
400.0
450.0
2008:Q1
2008:Q3
2009:Q1
2009:Q3
2010:Q1
2010:Q3
2011:Q1
2011:Q3
2012:Q1
2012:Q3
2013:Q1
2013:Q3
2014:Q1
2014:Q3
%ofGDP
US$Millions
Other EU KFW
CDB OECF USAID
IDB IBRD Grants-to-GDP Ratio
Jamaica has partnered
with a wide range of
multi-lateral financial
institutions since the
height of the global
financial crisis. Supporting
liquidity when global
capital markets where
exhibiting low levels of
liquidity.
These partners have
included the IBRD, IDB
and the CDB, among
others.

6. Official TransfersGrants
-
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2008:Q1
2008:Q3
2009:Q1
2009:Q3
2010:Q1
2010:Q3
2011:Q1
2011:Q3
2012:Q1
2012:Q3
2013:Q1
2013:Q3
2014:Q1
2014:Q3
%ofGDP
US$Millions
Other EU KFW
CDB OECF USAID
IDB IBRD Grants-to-GDP Ratio
Though grant flows from
MFIs have typically
represented lower
proportion relative to
GDP. These flows have
catalysed the
developmental process
via:
a) Provision of Technical
Expertise
b) Application of
International
Benchmark standards
c) Accountability along
key stages of project
implementation from
design to
implementation.

7. Improving Access to Global Capital
Markets…
Jamaica has increasingly focused on creating the necessary supporting policy and
institutional environment to promote and enhance the effectiveness of development
initiatives.

8. Global Bond Markets
0
2
4
6
8
10
12
14
Nov-08
Feb-09
May-09
Aug-09
Nov-09
Feb-10
May-10
Aug-10
Nov-10
Feb-11
May-11
Aug-11
Nov-11
Feb-12
May-12
Aug-12
Nov-12
Feb-13
May-13
Aug-13
Nov-13
Feb-14
May-14
Aug-14
Nov-14
Feb-15
Percent(%)
EMBI GOJGB
0
100
200
300
400
500
600
Nov-08
Feb-09
May-09
Aug-09
Nov-09
Feb-10
May-10
Aug-10
Nov-10
Feb-11
May-11
Aug-11
Nov-11
Feb-12
May-12
Aug-12
Nov-12
Feb-13
May-13
Aug-13
Nov-13
Feb-14
May-14
Aug-14
Nov-14
Feb-15
BasisPoints
GOJGB-EMBI Spread
These efforts have resulted in a notable narrowing of the spread between yields on
GOJ Global Bonds and the Emerging Market Bond Index.
Jamaica is one of twenty middle income countries (MIC) which has access to global
capital markets.

9. Other External Sources of
Development Financing

10. Other Sources of External
Financing (Annual Profile)
3.7
3.3
-0.7
-2.8
-5.2 -5.0
-12
-13.7
-15.0
-13.0
-11.0
-9.0
-7.0
-5.0
-3.0
-1.0
1.0
3.0
CY2012 CY2013 CY2014
PercentofGDP
Non-FDI Private Capital Flows/GDP FDI inflows/GDP Remittance Flows/GDP
INFLOWS (-)
OUTFLOWS (+)
Three other sources of
external financing have
been Remittances,
Foreign Direct
Investment and
Private Capital Flows.

11. Other Sources of External
Financing for Development
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
3.0
4.0
5.0
2012:Q4 2013:Q1 2013:Q2 2013:Q3 2013:Q4 2014:Q1 2014:Q2 2014:Q3 2014:Q4
PerCentofGDP
FDI Inflows/GDP Non-FDI Private Capital Flows/GDP Remittance Flows/GDP
CAPITAL OUTFLOWS
CAPITAL INFLOWS
While Foreign Direct Investment and Remittance inflows have been stable and robust,
Private Capital Flows, though improving, have been very volatile.

12. Other External Sources of
Development Financing: Remittances

13. Remittances: Who are the recipients?
In terms of other
sources of income
- 40 per cent of
recipients were
employed full-time
- 11 per cent were
self-employed
- 25 per cent where
unemployed
- 13 per cent were
not seeking a job
75% of Recipients
are women
Modal Age:
25 – 40
Household
Size: 4
Education:
85% have at least
Secondary-level
education
25% have
Tertiary-level
education
USD 222 per Month
680,000 Persons

14. Usage of Remittances for Frequent
Recipients
14 per cent
9 per cent
6 per cent
7 per cent
19 per cent

15. Electronic Retail
Payment Solutions for
which authorizations
were requested related
to proposals to provide
the following services
using cards and mobile
wallets:
i. Balance Enquiries;
ii. Bill Payments;
iii. Loyalty Programmes;
v. Person-to-Business
Transfers;
vi. Person-to-Person
Transfers; and
vii. Mobile wallet
services.

16. Other External Sources of
Development Financing: Foreign
Direct Investment

18. 4.8
5.7
4.2
4.4
4.6
4.8
5.0
5.2
5.4
5.6
5.8
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
CY2013 CY2014
TotalFDIasaPercentofGDP
US$Millions
Agricultural/Manufacturing/Distribution Divestment
Information Tech/Communication Infrastructure
Insurance Minerals & Chemicals
Mining Other
Retained Earnings Tourism
TOTAL
Annual Foreign Direct Investment by Economic
Sector
China is playing an increasingly
important role particularly in the
development of infrastructure in
Jamaica.
Tourism investments particularly
from Spain has also buoyed FDI
inflows.
There have also been ongoing
investments in the areas of
telecommunications, mining and
agriculture and distribution.

19. • Making it easier to start a business : Simplified preregistration
formalities (publication, notarization, inspection, other requirements)
• Cut or simplified post registration procedures (tax registration, social
security registration, licensing)
• Ease of getting electricity Improved regulation of connection processes
and costs
• Jamaica made getting electricity less expensive by reducing the cost of
external connection works.
• Jamaica made starting a business easier by consolidating forms, but
also made it more time-consuming as a result of delays in the
implementation of the electronic interface with different agencies.
Making “Doing Business” in Jamaica Easier

20. Domestic Sources of Private Sector
Development Financing

21. Domestic Sources of
Financing (Annual Profile)
-5.0
-4.5
-4.0
-3.5
-3.0
-2.5
-2.0
-1.5
-1.0
-0.5
0.0
CY2012 CY2013 CY2014
PercentofGDP
Domestic Loan Flows/GDP
INFLOWS (-)
The pace of
domestic financing
of loans to
businesses and
households has
slowed in 2014
relative to both
2012 and 2013.

23. Credit Reporting Activity

24. The Panoramic View
12.0
3.1
2.8
0.2
-1.3
2.8
-3.7
-5 0 5 10 15
Remittance Inflows
Official Loans
Foreign Direct Investment
Official Grant Flows
Govt Bond Flows
Domestic Loans
Private Capital Flows
Per cent of GDP
13.8
3.4
5.1
0.4
4.6
1.0
0.7
0 2 4 6 8 10 12 14 16
Remittance Inflows
Official Loans
Foreign Direct Investment
Official Grant Flows
Govt Bond Flows
Domestic Loans
Private Capital Flows
Per cent of GDP
2012 2014