Jamaica gov’t developing Financial Management Policy for natural disaster risk

The Ministry of Finance and the Public Service is developing a Public Financial Management Policy for Natural Disaster Risk.

Portfolio Minister, Dr. Hon. Nigel Clarke, said that the policy will be submitted to the Cabinet and if approved, laid in Parliament.

Dr. Clarke, who was opening the 2019/20 Budget Debate in the House of Representatives on March 7, said the strategy will provide the country with “layers of protection” in the event of a disaster.

It will include: accumulating fiscal savings in the Contingency Fund that is only to be used in the event of natural disasters; making contingent credit available in the event of a disaster; the Caribbean Catastrophe Insurance Facility, and catastrophe bonds or catastrophe-linked insurance.

Dr. Clarke said the pursuit of economic independence, requires an institutional response to the financial risk of natural disaster.

“Jamaica has done too much work and made too many sacrifices to leave us completely exposed in a post International Monetary Fund (IMF)-programme environment, to the potential fiscal impact of natural disaster,” he argued.

He said Jamaica, like much of the region, is vulnerable to natural disasters, and while events on the scale of Hurricane Gilbert occur only once every several decades, the data and experience show that higher frequency events regularly cost the country.

“Natural disasters result in unplanned public expenditure or the reallocation of already committed financial resources for reconstruction, rehabilitation and repair. Budgetary revenues also fall in natural disasters, central bank reserves come under pressure, and the need to borrow increases,” he noted.

Dr. Clarke said it is the ambition and vision of the Government that Jamaica remains decidedly on a course towards full economic independence.

“We are well on our way in that regard. We are in a period of unprecedented economic opportunity for all,” he said.