Summary: GAO reviewed the Agency for International Development's (AID) assistance program to Jamaica.
Balance-of-payments assistance through Economic Support Fund and P.L. 80-480 programs can contribute to development. AID can influence Jamaican economic policies by making assistance conditional on implementation of reforms to encourage private sector and overall economic growth. GAO found that AID has generally not achieved substantial policy reforms. Mission officials believe that it is important to follow through with the AID plan to link assistance to implementation of policy reforms. Foreign exchange provided to Jamaica is intended to finance imports needed by the private sector to increase production and employment. With an improved monitoring process, GAO believes that AID could encourage Jamaica to increase productive imports from the United States. While AID requires that Jamaica provide local currency equivalent to the value of U.S. balance-of-payments assistance for agreed upon development projects and purposes, AID relies upon the Government of Jamaica to select up to 90 percent of the projects which will receive local currency. GAO believes that AID could assume a more active role in identifying and proposing development projects to receive local currency. Further, AID does not plan to perform on-site monitoring of local currency projects to ensure that budget funds are in fact provided for agreed upon purposes or to determine whether projects are progressing adequately.
