The World Bank is moving its Caribbean operations to Jamaica as part of its plan to decentralised more staff and functions to the field offices by the mid-2020’s.
Carlos Felipe Jaramillo, World Bank regional vice president for Latin America and the Caribbean (LAC), commenting on the relocation of staff from Washington, said “The World Bank has decided that because of the importance of Jamaica, we are creating a regional hub to manage all our business in the Caribbean from right here in Kingston.”
Jaramillo was speaking with the Jamaica Observer at the end of a three-day visit to island earlier this week. It was his first trip as regional vice president for the LAC and his first visit to Jamaica.
Finance Minister Dr Nigel Clarke also added, “Jamaica has taken responsibility, shown leadership and is therefore an example to the region, and to the world, of a country boldly facing its challenges, with steady resolve, creativity and discipline. The visible and encouraging results are not only our success. They are the success of our bilateral and multilateral partners too. By relocating its Caribbean headquarters from Washington DC to Kingston, the World Bank implicitly projects Jamaica’s example and achievements to others, even as we continue to work assiduously towards improving social and economic outcomes.”
Jaramillo says the process to expand the office is now being started. The regional offices will be headed by Lilia Burunciuc, who was appointed World Bank country director for Caribbean countries, effective July 1, 2021.
Jamaica to benefit from US$185-million Catastrophe Bond
After three years of efforts, Jamaica has now secured a catastrophe bond to insure the country against financial losses up to U.S.$185 million from named storms for three Atlantic tropical cyclone seasons from 2021 to December 2023. Finance Minister Dr Nigel Clarke first outlined the need for a catastrophe bond for Jamaica in May 2018, but at the time the existence of investors willing to accept tropical cyclone and hurricane risk from a single island, situated in the direct path of hurricanes, was unproven.
Clarke commenting on the deal which was finalised on Monday during the visit of the World Bank’s Regional Vice President for the LAC, Carloe Felipe Jaramillo, noted, “with the World Bank’s support, we made our case to the governments of the UK and Germany, through the Global Risk Financing Facility (GRIF), which they capitalise. They bought into our vision and provided us with a grant that we will use to help pay the premia.” “We received similar support from the USAID which began with my first meeting with Jason Fraser when he assumed responsibility for USAID in Jamaica.”
The catastrophe bond is the first for any country in the Caribbean and the first of any small island state. It’s also the first ever catastrophe bond with the cat in a grid trigger design. To determine payout, the most sophisticated technology will be used to quickly assess the damage of a hurricane with the data taken from the US National Hurricane Center automated tropical cyclone forecast. It allows for the determination of the payout within a few weeks of the event.
That grid divides Jamaica into a grid of 19 squares in a map that are superimposed over the island. The data from the US Hurricane Center, will show which of these squares are affected, and depending on the damage in each square the payout is determined.
Clarke further added that “The Government of Jamaica has strategically prioritized disaster risk financing to mitigate the adverse fiscal impact of tropical cyclones and hurricanes, thereby increasing our economic resilience. We have to incorporate the realities of our climatic vulnerability by planning ahead.”
The World Bank says it hopes other Caribbean countries will follow suit.