Jamaica Economy

Jamaica's economy is highly developed compared to the economies of most Caribbean islands. It has a vital financial sector with many international banks, a large skilled workforce, and a relatively broad-based economy. The economy, however, is dependent on imported consumer goods and raw materials, which have exceeded earnings from tourism and bauxite (which account for three-quarters of Jamaica's foreign exchange earnings), plus sugar and bananas, all of which are susceptible to erratic worldwide demand. The island has had to confront an acute balance-of-payments crisis and is beleaguered by a massive foreign debt (US$4.7 billion). Jamaica also suffers from high inflation (7.3% in 2000) and persistent unemployment.

In 2002, the government moved to stimulate the economy by initiating the nation's largest ever infrastructural project intended to provide the catalyst for sustained national development.

The USA is Jamaica's major trading partner, accounting for more than one-third of the island's exports and more than one-half of its imports.

Despite its relatively developed economy, Jamaica is one of the poorest islands in the Caribbean. Although the nation's GDP was at US$6.82 billion in 2000, its per capita GDP of US$2653 reflects the nation's continuing battle with poverty.

One-third of Jamaican families officially live below the poverty line. About 16% of the working population is officially unemployed, while another one-third freelances in what is called the 'informal sector' - prostitution, higgling (bargaining), and hustling. Jamaica has no general unemployment benefits.

Major Industries

Tourism

Tourism accounts for 45% of Jamaica's foreign income and generated US$1.3 billion in revenue in 2000, when 1.8 million visitors arrived (half of these were cruise passengers). It also directly employs over 75,000 Jamaicans, plus 225,000 indirectly (a quarter of all jobs).

In 1999, the JTB developed a new master plan, which focused on developing eco-tourism and 'cultural tourism.'

Bauxite

In the 1960s, Jamaica (which has 2.5 billion tons, or 7% of world reserves) was the world's number one source of bauxite. Today, Jamaica is the world's third largest producer of bauxite and processed alumina (only Australia and Brazil produce more). The industry accounts for one-quarter of the government's income.

Agriculture

Agriculture is an important source of employment (accounting for 21% of the labor force), despite its relatively low contribution to the GDP (about 7.5%). The fertile plains are the domain of large holdings producing sugar and other crops for export. The rocky hillsides and mountains are the domain of the peasant smallhold farmer.

The vast majority of Jamaica's 160,000 farmers cultivate less than 5 acres (the average holding is 1 1/2 acres). Owning one's 'own little piece of rockstone' is still the ideal in a nation where 55 % of the land -almost exclusively the most fertile flat-lands - is owned by 5% of the population.

In the late 1800s, Jamaica was the world's largest banana producer. Though the industry gradually declined during the 20th century to a low of 28,000 tons annually in the 1980s, it has recently seen a recovery: Jamaica exported 42,500 tons of bananas in 2000. Almost one-third of Jamaica's agricultural land (203 sq miles) is planted with sugar. The sugar economy remains the largest employer in Jamaica. Formerly the engine of the Jamaican economy, the industry has declined steadily since 1965, when production peaked at 501,000 tons. Production in 2000 amounted to 216,000 tons.

Increasing attention is being given to allspice (pimento), citrus, coffee, ginger, cocoa, rum, ornamental flowers, and cattle. Citrus projects, in particular, have expanded rapidly in the past 20 years.

And then there's ganja! In the 1970s and '80s, ganja was 'king' in Jamaica and a major contributor to the country's economic development. Thanks to a committed anti-narcotics drive by the Patterson government, many farmers who once relied on the crop now struggle to make a living. Still, the trade continues.

Manufacturing & Service Industries

Manufacturing contributed 35.2% of the GDP in 2001 and employs about 19% of the active workforce. Investment incentives have resulted in the growth of sizable processed-goods and textile industries.

Kingston is one of the Caribbean's leading financial centers. Jamaica has dozens of banks and financial institutions, plus an important stock market.

The broader service industry employed 41 % of the working population and comprised 57.4% by value of Jamaica's GDP in 2000.

Discuss This Article (Economy)

Recent Comments

crime is the major set back to jamaica

by Andrew Jackson from Jam

Jamaica as the ability to become a great nation, but the monster of crime is crippling the nation. But I got a solution to all this..simple...make Jamaica into a high tech community..by putting camera's on every light poles..yea..a know this would be expensive..but look at the bight side...this would eliminate a increase in police force..the over worked police force, and more criminal would be caught. research shows that every crime committed is done near some form of light ... [read more]

Economy

by Tal Rickards from Miami

I agree about the natural generators to gain energy for the processing of bauxite.
Being more ecologically minded can help this situation rather than the stripping of a resource continually. Jamaica needs to do more in regards of helping the poor with the proper resources to get a greater percentage out of the poverty level.

Bauxite

by Loren from DSM, IA

Bauxite is only mined not processed. No value is locally added so it is just striping a resource. Generators could be built from sea tides/currents, wind, and even alcohol from sugar by products to gain energy to process bauxite.

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