THE EDITOR, Sir:

I am writing to you with reference to the article you ran in Wednesday's paper titled, 'Government draws down IDB funds'.

While we appreciate your interest in the Bank's operations, the article erroneously claims that I stated that the cancellation of Bank funds was caused by the mismanagement of funds and a change in our oversight regarding our prudential norms as they apply to Jamaica. This is a gross distortion of what was actually said. I carefully explained to Mr Deane that the cancellations were the result of collaboration between the Government and the Bank in an effort to rationalise the portfolio to make it more fiscally manageable.

The reason for the mutually agreed cancellation was the shortage of fiscal space that led to the unacceptably slow execution of the projects and the accumulation of large unused balances. At no time did I imply or state that it was triggered by any mismanagement of funds or any change in our prudential norms.

With regard to the interest rate charged on any of the loans made by the Bank, I explained to Mr Deane, that the rates are determined by the choice made by the Government between several options. The information unavailable at the time of the telephone interview was which option had been chosen by Jamaica.

I can confirm that the Government selected the single currency facility adjustable rate which is currently estimated at 5.64 per cent for the first quarter of 2008.

Given the magnitude of the error regarding the rationale for the cancellation, I hereby request on behalf of the Inter-American Develop-ment Bank that you publish an immediate retraction and present a correct account of the facts.

I am, etc.,

Gerard S. Johnson

Representative

Inter-American

Development Bank