"Within one month our revenues had jumped over 50%."

Jamaican Economy Facts

jamaican boy
Jamaica has long held a romantic perception as a great place to get away for vacation, with sunny beaches and palm trees. It has also held the perception of a third world country, with crushing poverty and poor governance. But the real picture is a mix of both and then some. Jamaica is a relatively small country both geographically and demographically. It is a small island in the Caribbean, with population that the CIA world Factbook estimated at 2,847,232. Many Jamaicans have emigrated to other countries, especially to the United Kingdom, the United States, and Canada. In the case of the United States, about 20,000 Jamaicans per year are granted permanent residence, according to US Immigration statistics. Jamaica has had one of the highest murder rates in the world for many years, according to UN estimates. Some areas of Jamaica, particularly cities such as Kingston, experience high levels of crime and violence, according to a report by the UK foreign Office. But these downsides cover up some strong advantages in the Jamaican economy.Jamaica is a mixed economy with both state enterprises and private sector businesses. The Jamaican economy’s GDP was estimated at $23.45 billion in 2009, by the IMF. The economy has a nominal GDP per capita of $8,200, in 2009. Major sectors of the Jamaican economy include agriculture, mining, manufacturing, tourism, and financial and insurance services. The Jamaican economy can be broken down into the following sectors, agriculture: 5.7%; industry: 29.7%; services: 64.7%. Tourism and mining are the leading earners of foreign exchange. Half the Jamaican economy relies on services, with half of its income coming from services such as tourism. An estimated 1.3 million foreign tourists visit Jamaica every year, according to Fairfax Digital. Jamaica has a wide variety of industrial and commercial activities. The aviation industry is able to perform most routine aircraft maintenance, except for heavy structural repairs. There is a considerable amount of technical support for transport and agricultural aviation. Jamaica has a considerable amount of industrial engineering, light manufacturing, including metal fabrication, metal roofing, and furniture manufacturing. Food and beverage processing, glassware manufacturing, computer software and data processing, printing and publishing, insurance underwriting, music and recording, and advanced education activities can be found in the larger urban areas. The Jamaican construction industry is entirely self-sufficient, with professional technical standards and guidance, according to Jamaica Gleaner.The global economic downturn had a significant impact on the Jamaican economy for the years 2007 to 2009, resulting in negative economic growth, with the Jamaican economy contracting by an estimated 4.2% in 2009. The government implemented a new Debt Management Initiative, the Jamaica Debt Exchange (JDX) on January 14, 2010. The initiative would see holders of Government of Jamaica (GOJ) bonds returning the high interest earning instruments for bonds with lower yields and longer maturities.The offer was taken up by over 95% of local financial institutions and was deemed a success by the government. Owing to the success of the JDX program, the Bruce Golding-led government was successful in entering into a borrowing arrangement with the IMF on Ferbruary 4,2010 for the amount of US$1.27b. The loan agreement is for a period of three years, according to an article by the Jamaica Gleaner. In addition, inflation has been trending upward since 2004 and is projected to once again reach a double digit rate of 12-13% through the year 2008 due to a combination of unfavorable weather damaging crops and increasing agricultural imports and high energy prices, according to the Jamaican Observer.

Overall, doing trade in Jamaica is still somewhat difficult, with the World Bank ranking it in 88th place for its annual Ease of Doing Business survey. There are a number of other rankings that make up the aggregate ranking and Jamaica did not perform too well on those rankings either. For example, Jamaica was ranked in 126th place for ease of enforcing contracts, 79th place for protecting investors, and 97th place for trading across borders. In a comparison of 2011 and 2012, Jamaica actually went down on a number of the rankings that make up the World Bank survey. While Jamaica still shows promise as an emerging market, there are still a number of difficulties that businesses will have to overcome to trade in this market.

-Jay Zadey

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Author:Globial International Business Team

The Globial International Business Team researches, analyzes, and reports on all things related to global trade and business.

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