IMF agreement slows building of more schools

Daraine Luton, Senior Staff Reporter

HEAD OF the National Education Trust (NET), Paul Matalon, says there have been several expressions of interest from the private sector to partner with Government to build schools.

The NET is charged with the responsibility of building education infrastructure throughout the country, but Matalon told a Gleaner Editors' Forum Thursday that the country's agreement with the International Monetary Fund (IMF) presents a binding constraint.

"It is a restrictive criterion that is there that is right across Government now that includes the (education) ministry now and the NET operation," Matalon said during the forum held at the newspaper's North Street, central Kingston, offices.

Jamaica entered into an agreement with the IMF this year to borrow up to US$1.2 billion. A condition of the agreement is that the country's debt cannot be increased.

Education Minister Andrew Holness has said that owing to Government's inability to fund the construction of schools, it would need to partner with private entities in joint ventures.

Thursday, Matalon said: "A lot of interest has been put there so far, and we are working with the Inter-American Development Bank (IDB) with a consultation now to look at two aspects."

"The USAID (United States Agency for International Development) is helping us on one side in terms of tax implications, which is in process, and we are working with the IDB to look at the different structures so that we can put together the Jamaican model," Matalon said.

He told the forum that one aspect of the model being considered is the use of an education bond, but that that, too, had to be pursued in terms of the debt criteria of the IMF.

"It (IMF) is now being approached on a matter to try and exempt education from that requirement because in effect, you are going to pay back this money over a 30-35-year period, so even though you are taking on the debt up front, it is really an amortisation payment that is going to come back out of this programme. So that is being examined now, and before the end of the year, we are hoping to have that way forward," Matalon explained.

More classrooms

During his contribution to the 2009-2010 Budget Debate, Education Minister Andrew Holness said the country needed more classrooms, but there was no money to build schools.

"We have to build more schools to give more of our youth access to better life chances," Holness had said. "We plan to build 100 more schools in the short term. This will be the largest school construction in Jamaica's history."

He added: "Such a massive construction project can have a huge positive impact on the economy and lay the framework for public-private partnerships in other areas of infrastructure. If we make the investment today, we would not need to build any new schools for some time to come, as the population growth trend is declining," Holness said.

Under its mandate, the NET is to establish a dedicated fund out of which yearly payments can be secured. Prime Minister Bruce Golding has said that some of the revenue derived from casino operations would be dedicated to the NET.