Economy of Jamaica
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Jamaica has natural resources, primarily bauxite, and an ideal climate conducive to agriculture and tourism. The discovery of bauxite in the 1940s and the subsequent establishment of the bauxite-alumina industry shifted Jamaica's economy from sugar and bananas. By the 1970s, Jamaica had emerged as a world leader in export of these minerals as foreign investment increased.
The country faces some serious problems but has the potential for growth and modernization. The Jamaican economy suffered its fourth consecutive year of negative growth (0.4%) in 1999. In 2000, Jamaica may have experienced its first year of positive growth since 1995. All sectors excepting bauxite/alumina, energy, and tourism shrank in 1998 and 1999. This reduction in aggregate demand and output is the result of the government's continued tight macroeconomic policies. In part, these policies have been successful. Inflation has fallen from 25% in 1995 to 6.1% in 2000. Through periodic intervention in the market, the central bank also has prevented any abrupt drop in the exchange rate. The Jamaican dollar has been slipping, despite intervention, resulting in an average exchange rate of J$43.5 to the US$1.00 (2000).
Weakness in the financial sector, speculation, and lower levels of investment erode confidence in the productive sector. The government continues its efforts to raise new sovereign debt in local and international financial markets in order to meet its U.S. dollar debt obligations, to mop up liquidity to maintain the exchange rate and to help fund the current budget deficit.
Jamaican Government economic policies encourage foreign investment in areas that earn or save foreign exchange, generate employment, and use local raw materials. The government provides a wide range of incentives to investors, including remittance facilities to assist them in repatriating funds to the country of origin; tax holidays which defer taxes for a period of years; and duty-free access for machinery and raw materials imported for approved enterprises. Free trade zones have stimulated investment in garment assembly, light manufacturing, and data entry by foreign firms. However, over the last 5 years, the garment industry has suffered from reduced export earnings, continued factory closures, and rising unemployment. This may be attributed to intense competition, absence of NAFTA parity, drug contamination delaying deliveries, and the high cost of operation, including security costs. The Government of Jamaica hopes to encourage economic activity through a combination of privatization, financial sector restructuring, reduced interest rates, and by boosting tourism and related productive activities.
GDP: purchasing power parity - US$11.3 billion (2004 est.)
GDP - real growth rate: 1.9% (2004 est.)
GDP - per capita: purchasing power parity - US$4,100 (2004 est.)
GDP - composition by sector:
agriculture: 6.1%
industry: 32.7%
services: 61.3% (2004 est.)
Population below poverty line: 19.7% (2002 est.)
Household income or consumption by percentage share:
lowest 10%: 2.7%
highest 10%: 30.3% (2000)
Inflation rate (consumer prices): 9.4% (1999 est.)
Labor force: 1.14 million (2004)
Labor force - by occupation: services 63.4%, agriculture 20.1%, industry 16.6% (2003)
Unemployment rate: 15% (2004)
Budget:
revenues: $2.27 billion
expenditures: $3.66 billion, including capital expenditures of $1.265 billion (FY98/99 est.)
Industries: tourism, bauxite, textiles, food processing, light manufactures, rum, cement, metal, paper, chemical products.
Industrial production growth rate: NA%
Electricity - production: 6,386 GWh (1998)
Electricity - production by source:
fossil fuel: 92.7%
hydro: 2.21%
nuclear: 0%
other: 5.09% (1998)
Electricity - consumption: 5,939 GWh (1998)
Electricity - exports: 0 kWh (1998)
Electricity - imports: 0 kWh (1998)
Agriculture - products: sugarcane, bananas, coffee, citrus, potatoes, vegetables; poultry, goats, milk
Exports: $1.4 billion (f.o.b., 1999 est.)
Exports - commodities: alumina, bauxite, sugar, bananas, rum
Exports - partners: United States 39.5%, European Union (excluding UK) 15.6%, United Kingdom 12.1%, Canada 11.5% (1998)
Imports: $2.7 billion (f.o.b., 1999 est.)
Imports - commodities: machinery and transport equipment, construction materials, fuel, food, chemicals, fertilizers
Imports - partners: United States 50.9%, European Union (excluding UK) 9.5%, Caricom countries 10.4%, Latin America 6% (1998)
Debt - external: $3.8 billion (1998 est.)
Economic aid - recipient: $102.7 million (1995)
Currency: 1 Jamaican dollar (J$) = 100 cents
Exchange rates: Jamaican dollars (J$) per US$1 - 45.7 (June 2001), 41.139 (December 1999), 9.044 (1999), 36.550 (1998), 35.404 (1997), 37.120 (1996), 35.142 (1995)
Fiscal year: 1 April–31 March
- See also : Jamaica