Jamaica

A Country Assessment Study was undertaken in Jamaica during the second half of 2000. Its findings were then discussed at a national workshop in February 2001. The conclusions of the workshop will form the basis of a national action plan.

The following is a summary of the assessment's findings.

June 2001
THE 1990s HAVE SEEN Jamaica move towards economic liberalization and a liberal political agenda, attracting significant foreign direct investment (FDI) in the process. However, the island has struggled to achieve economic growth with real growth rates averaging a comparatively poor 0.1% throughout. Fiscal deficit and a huge debt burden have kept real interest rates high, restricting domestic investment and dampening the island's entrepreneurial energy. Meanwhile, the exchange rate has tended to appreciate, encouraging imports and discouraging exports. Furthermore, Jamaica is losing its privileged access to EU markets. These factors have conspired to place the opportunities of liberalization out of the reach of Jamaican business.

'New breed' enterprises, survivors from the harsh 1990s economic climate, small businesses and the informal sector are ideally placed to bring about economic growth through increased competition, the development of new products and services and the exploration of new commercial sectors. At the same time, policy makers need to foster macroeconomic stability and fiscal discipline, tackle the debt problem, and maintain political and institutional credibility.

Jamaica's human development indicators are relatively positive and Jamaicans are increasingly exhibiting the disease profiles of the developed world. Therefore health care costs can expect to rise in the future, which explains how static public health spending is leading to growth in private health care. The rate of HIV/AIDS is relatively low and early action will avoid the future costs of inaction witnessed elsewhere in the region.

While pass rates in basic English and Maths are rising and enrolment at primary and secondary levels are good relative to comparison countries, tertiary enrolment rates are barely 4%. With rising global educational standards, Jamaica needs to develop a passion for education to be competitive. Training workers in customer service and marketing will bring long-term benefits to the tourist trade, while training in new areas, such as e-commerce, should be provided to small and medium enterprises, perhaps as joint public-private initiatives.

Less competitive sectors are likely to see major job losses over the next decade, creating demand for improved labour flexibility. Support nets should be set up to help the victims of reform efforts avoid falling into long-term poverty traps. Demographic changes have led to an unusually large number of workers relative to dependents. However, coupled with a high rate of emigration by the well qualified, this has resulted in increased urbanisation, fragmented families and a rise in crime. With the potential costs and perceptions of crime so significant as to threaten growth, preventative action in this area is an important first step towards tackling poverty and strengthening Jamaica's "brand".

Jamaica is nearing the point where, in the absence of economic growth, serious questions will be raised about its ability to sustain its human development achievements. Along with sound macroeconomic management, the island needs to build on its traditional strengths like tourism by seeking out new sectors and business innovations, injecting new skills, such as IT, into the economy, and fostering alliances with international producers and distributors, to facilitate these changes. Furthermore, such reforms must be communicated effectively in order to build the necessary political capital to help deliver change.

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© United Nations 2001