China owns almost half Jamaica's debt to foreign governments

Jamaica is indebted to foreign governments and agencies to the tune of $53.9 billion, nearly half of which is owed to China.

Financial statements tabled in the House of Representatives last week by Finance Minister Dr Peter Phillips indicate that $24.7 billion is owed to the Asian giant, but Dr Lloyd Waller said that if it were possible to remove the Chinese loan variable, together with the concomitant benefits to the country, Jamaica would be worse off.

"A part of the developmental process is infrastructure and development, and road network plays an important role in that regard. For many businesses and individuals, they will benefit significantly from the creation of an efficient way to move from one location to the other," Waller, head of the Department of Government at the University of the West Indies, Mona, said.

Of the funds owed to China, $5.9 billion relates to the Paliasados Shoreline Protection and Rehabilitation Project; a similar $5-billion debt for the construction of the Montego Bay Convention Centre; just over $3 billion for the construction of the Trelawny multi-purpose stadium; and $7.6 billion for the Jamaica Economic Housing Programme.

The Government's flagship road project - the Major Infrastructure Development Programme - has so far racked up a debt of $1.6 billion. Interestingly, there is no reference to the US$400-million Jamaica Development Infrastructure Programme in the list of debt owed by the central government to China.

impact of loans

The Government of Jamaica, through the Road Maintenance Fund and the Export Import Bank of China, entered into a US$400-million loan agreement in August 2009 to finance the improvement and rehabilitation of the island's road network under an initiative called the Jamaica Development Infrastructure Programme.

Waller said that when examining matters such as Jamaica's debt, it is critical that one evaluate the impact loans could have on both macro-economic and personal development within the country.

Jamaica's total debt as at March 31 stood at $1.85 trillion, $801.5 billion of which represents external debt. The country's internal debt is $1.05 trillion.