Name: Jamaica Population: 2.7 million Capital: Kingston Other major cities: Portmore, Spanish Town, Mandeville, Ocho RÃos, Port Antonio, Negril, and Montego Bay Area: 10,991 sq km Currency: Jamaican dollar GNI per capita: US$4,750 Main exports: Bauxite, alumina, garments, sugar, bananas, rum Language: English (official), Jamaican Patois Religion: Christianity, 24% Church of God Life expectancy: 72 years WB Development IndicatorsÂ
Jamaica has been a stable democracy since its independence in 1962, with freedom of expression and well-established traditions of democratic participation. In spite of modest long-term growth, Jamaica has made substantial progress in poverty reduction since it began monitoring living conditions in 1988. Poverty has fallen from 30.5 percent in 1989 to 9.9 percent in 2007. With growing unemployment and reduced remittances (which accounted for 16 percent of GDP in 2009) occasioned by the global economic downturn, the incidence of poverty has increased to 16.9 percent in 2009.
The country has made remarkable progress in the areas of financial sector reform and reform of the social sectors, including safety nets, HIV/AIDS prevention and control, and education. For example, enrollment of children aged 3-5 from the poorest 20 percent of the population rose from 80 percent in 1998 to 100 percent in 2007. The Government is also working to improve the quality of education.
Jamaica is also on track to meet most of the Millennium Development Goals, including targets on poverty, child malnutrition, universal primary education, and access to safe drinking water, though the country is unlikely to meet targets on infant and maternal mortality.
Jamaica's most pressing challenge is the country’s debt, which is currently estimated at 139.7 percent of GDP. Other critical development challenges include mitigating the medium-term effects of the global economic crisis and protecting social gains while moving towards fiscal and debt sustainability.
The country is working towards addressing short-term crisis and long-term development issues with the support of a 27-month International Monetary Fund (IMF) program and budgetary support from the World Bank and other development partners. The domestic debt exchange (JDX) in February 2010 was a success and the intended gains are being realized much faster than expected. The JDX recorded a participation rate of 99.2 percent and resulted in notable change in the maturity profile of the domestic debt. The average maturity of the domestic debt after the JDX increased to 8.9 years from 4.5 years, lowering pressures on interest rates and improving the government’s ability to respond to shocks. This initiative generated interest savings of at least 3 percent of GDP through the reduction interest rates by 7 percentage points and 2 percentage points on outstanding domestic and US dollar denominated bonds, respectively.
Jamaica has lost four decades without achieving significant growth. To address this issue and build on the early successes of the IMF-led structural adjustment program, the government in March 2011 prepared a strategy to stimulate growth in the near-to-medium term.
Outlook and challenges ahead
The Jamaican economy is expected to grow at 1-2 percent over the medium term. Despite Jamaica’s impressive achievements, the country is confronted by serious social issues that predominantly affect youth, such as high levels of crime and violence and high unemployment. While the total unemployment rate has fallen from 15.3 percent of the labor force in 1990 to 11.3 percent in 2009, youth unemployment remained relatively high at 30 percent in 2011 (ages 15–24), three times the adult unemployment rate (9 percent). With the economic downturn, the unemployment rates are expected to increase significantly. Early school leaving is also a determinant of crime, and a World Bank study on Youth Development in the Caribbean shows that it can reduce net discounted lifetime earnings by as much as US$157,000 for males and US$115,000 for females.
Among Jamaica’s assets are its skilled labor force and strong social and governance indicators. However, to restore self-sustaining and job-creating growth, Jamaica will have to improve its international competitiveness and productivity, while also tackling urgent short-term economic and social needs.
The World Bank has worked closely with Jamaica since the country gained its independence in 1962. Since then, the Bank has been actively engaged in extending credit and development assistance to the country through several projects in various sectors, including agriculture, rural and urban development, education, infrustructural development, tax administration reform, private sector development, small scale enterprise development and telecommunications.
The Jamaica-World Bank Group Country Partnership Strategy (CPS) for 2010-2013 is closely aligned with the government's development priorities and focuses on three pillars:
(i) Support economic stability through fiscal and debt sustainability. (ii) Promote inclusive growth by supporting programs that strengthen human capital, prevent crime and violence and promote of rural development. (iii) Promote sustained growth by improving competitiveness.
Jamaica’s fiscal space remains limited and the interventions identified by the CPS have been carefully chosen to help the government achieve its objectives. The Bank’s assistance centers on supporting the government’s medium-term fiscal and debt sustainability reform program, and will be complemented by six investment loans and technical assistance.
The World Bank helped the government prepare a prospectus on fiscal and debt sustainability and is helping on education reform. A US$100 million loan was approved in January 2009 and another US$200 million loan was approved in February 2010, following the approval of an IMF program that included the execution of a domestic debt exchange.
Current projects:
The World Bank currently has seven ongoing projects in Jamaica:
The Inner City Basic Services Project (US$29.3 million) seeks to improve the social, economic and physical conditions of inner city communities by providing access to basic infrastructure (roads, water, sanitation, drainage), crime and violence reduction and prevention programs, as well as access to microfinance and employment opportunities.
The Social Protection Project (US$40 million) seeks to strengthen the country’s social insurance and social assistance system and is a follow-up to an earlier loan that supported the establishment of a conditional cash transfer program.
The Jamaica Second HIV/AIDS Project (US$10 million) supports services to prevent new HIV infections and provide treatment and care for people infected and affected by HIV/AIDS.
The Rural Economic Development Initiative (REDI) (US$15 million) aims to stimulate rural economic growth through the financing of approximately 110 rural subprojects that support revenue generating activities in agriculture and tourism, as well as the provision of critical infrastructure, marketing and management subprojects in these sectors.
The Early Childhood Development Project (US$15 million) co-finances the implementation of Jamaica’s National Strategic Plan for Early Childhood Development by improving services for young children and their parents.
The Energy Security and Efficiency Project (US$15 million) supports the implementation of the government’s energy policy, particularly the goals of enhancing Jamaica’s energy security and efficiency by reducing energy costs and reducing the country’s high dependence on imported petroleum products.   Â
The Bank also provides grant funding to Jamaica. Currently, there are about 12 grants under implementation totaling US$13.0 million.
Besides the projects listed above, the Bank conducts periodic customized reports on both Jamaica and the wider Caribbean region. Some recent examples include:
Jamaica is currently the International Finance Corporation’s (IFC) largest country exposure in the English-speaking Caribbean. A member country since 1964, IFC opened a field office in Kingston in 2009. The focus areas of IFC’s strategy for private sector development in Jamaica include financial market development and access to finance, infrastructure, tourism, health and education, information technology and investment climate improvement.
As of the end of February 2011, IFC's disbursed portfolio in Jamaica totalled US$254 million, including US$83 million in syndication from commercial banks. In the last year, IFC invested or mobilized nearly US$190 million for projects in Jamaica's power, energy and transport sectors, including Jamaica Energy Partners (US$99 million), Jamaica Public Service Company (US$30 million), and Trans-Jamaican Highway (US$60 million).
IFC also provided advisory services on the Air Jamaica privatization, advised the Government of Jamaica on credit bureau legislation to facilitate access to finance to underserved segments, and signed an agreement and implemented the first phase of a Technical Assistance Program with one of Jamaica‘s largest microfinance institutions to help increase its reach and efficiency.
Multilateral Investment Guarantee Agency
The Multilateral Investment Guarantee Agency (MIGA) continues to provide demand-driven guarantees to projects in Jamaica, especially in the tourism, financial services, and power sectors. MIGA’s portfolio in Jamaica includes a total guarantee exposure of US$72.2 million. The outstanding projects are guarantees for the financing of two stages of the expansion of the Kingston Port Container Terminal. MIGA’s online investment promotion services feature 100 documents on investment opportunities and the related business, legal and regulatory environment in Jamaica.
The Reform of Secondary Education II Project - ROSE II (US$40 million) ensured that 99 schools received grants to develop literacy-based programs. This resulted in the improvement of students' reading skills as well as their attitude towards school. A bursary program allowed 459 low-income students to complete secondary school. School expansion added 800 places to two high schools, allowing them to move off the shift system and offer full-day sessions. Students at these schools also benefited from educational resources and state-of-the-art equipment. Over 1,000 teachers received training in the use of Diagnostic Tools and Strategies, developed to assist teachers in identifying and working with students with learning challenges. Finally, the project developed a guide for School Improvement Planning that will be used by the Jamaica Teaching Council for training purposes and will be available to all the school directors.
Public Administration
The Fiscal and Debt Sustainability Development Policy Loan (US$100 million) assisted the government in improving fiscal and debt sustainability during an on-going and severe global financial crisis by supporting policies for macroeconomic stability and helping to improve the efficiency and effectiveness of public spending and investment decisions. Specifically, the project supported policy actions in the following areas: (i) promoting fiscal sustainability through controlling overall public sector balances, debt generation, and rationalization of public bodies, (ii) increasing the efficiency of public financial management and budgeting processes, and (iii) reducing distortions and enhancing the efficiency and fairness of the tax system.
Social Protection
The Social Protection Project (US$40 million) has been successful in expanding coverage of the national conditional cash transfer program Programme of Advancement Through Health and Education (PATH) to ensure that about 14 percent of the population (which roughly corresponds to the poverty headcount) have access to cash transfers particularly during the food, fuel and financial crisis. The benefit level was automatically adjusted in response to inflation and then further increased to provide additional incentives to secondary school students, and boys in particular, to stay in school and finalize high school. Impact evaluation showed that PATH has substantially increased school attendance and the use of preventive health care services by children in poor families. In addition, the project is helping working adults in PATH families to seek and retain employment through referral to the relevant support services, as well as improving public sector pension system administration.
The country has made remarkable progress in the areas of financial sector reform and reform of the social sectors, including safety nets, HIV/AIDS prevention and control, and education. For example, enrollment of children aged 3-5 from the poorest 20 percent of the population rose from 80 percent in 1998 to 100 percent in 2007. The Government is also working to improve the quality of education.
The country is working towards addressing short-term crisis and long-term development issues with the support of a 27-month International Monetary Fund (IMF) program and budgetary support from the World Bank and other development partners. The domestic debt exchange (JDX) in February 2010 was a success and the intended gains are being realized much faster than expected. The JDX recorded a participation rate of 99.2 percent and resulted in notable change in the maturity profile of the domestic debt. The average maturity of the domestic debt after the JDX increased to 8.9 years from 4.5 years, lowering pressures on interest rates and improving the government’s ability to respond to shocks. This initiative generated interest savings of at least 3 percent of GDP through the reduction interest rates by 7 percentage points and 2 percentage points on outstanding domestic and US dollar denominated bonds, respectively.
The World Bank has worked closely with Jamaica since the country gained its independence in 1962. Since then, the Bank has been actively engaged in extending credit and development assistance to the country through several projects in various sectors, including agriculture, rural and urban development, education, infrustructural development, tax administration reform, private sector development, small scale enterprise development and telecommunications.
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