Business View Caribbean - August/September 2018

8 9 CDB APPROVES US$9.3 MILLION LOAN TO ANGUILLA TO SUPPORT REFORM PROGRAM T he board of directors of the Caribbean Development Bank (CDB) has approved a US$9.3 million loan to the govern- ment of Anguilla, to implement a re- form program that aims to restore fiscal sustainability and enhance resilience against natural disasters. Anguilla is highly vulnerable to natural disasters, and since 1995, the island has been affected by eight named hurricanes. Following the passage of Hurricane Irma in 2017,Anguilla suffered damage and losses that were estimated at approxi- mately 97percent of GDP.The country is also heavily reliant on tourism, and the effects from Hurricane Irma have led to the closure of hotels and restaurants, causing significant unemployment and income losses. The loan fromCDB is the first of a se- ries of three proposed policy-based loans, whichwill support Anguilla’s three-year reform program to restore fiscal stability and build resilience, in order to promote and sustain economic recovery and growth.This first loan supports initial reforms under the government’s medi- um-term economic and fiscal plan. “This policy-based loan,which is the first of three,will fill the government’s fiscal gap and provide immediate liquidi- ty needed to help shore-up the island’s fi- nances,mitigate shocks to expenditure such as the fiscal implications of Hurricane Irma and as- sist with building longer term fiscal resilience,” said Dr. Justin Ram,Director of Economics at CDB. Under the area of restoring fiscal stability, the funds providedwill be used to help Anguilla strengthen itsmacroeconomic planning frameworkpost-Hurricane Irma; enhance revenue collection; and improve expenditure and debt management. To build resilience, the intervention will support reforms by strengthening policy, governance, and institutional arrange- ments for environmental management towards increased climate change resil- ience; as well as enhancing institutional capacity for social protection. Prior to the approval of this loan, in the aftermath of Hurricane Irma, the government of Anguilla received finan- cial support from CDB, including an emergency relief grant of US$200,000 and a loan of US$5 million to assist in the restoration of electricity. Earlier in 2018, CDB provided loan financing of US$5.6 million to help the government meet its debt obligations, and focus on its recovery priorities,without having to divert resources to meet financing needs. OPENING LINES