Overview

Jamaica is an upper middle income country with the largest population in English speaking Caribbean. For decades, Jamaica has struggled with low growth, high public debt and many external shocks that further weakened the economy. Over the last 30 years, real per capita GDP increased at an average of just one percent per year, making Jamaica one of the slowest growing developing countries in the world. The country accumulated public debt stood around 140% of GDP.

To reverse this trajectory, the Government of Jamaica embarked on a comprehensive and ambitious program of reforms for which it has garnered national and international support:  a four-year Extended Fund Facility (EFF)  by  the International Monetary Fund (IMF) providing  a  support package of US$ 932 million;  World Bank Group and the Inter-American Development Bank (IDB) programs providing  US$ 510 million each to facilitate the GoJ’s economic reform agenda to stabilize the economy, reduce debt and create the conditions for growth and resilience. In addition, the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) will continue to support private sector development.

The reform program is beginning to bear fruit: Institutional reforms and measures to improve the environment for the private sector have started to restore confidence in the Jamaican economy. Jamaica jumped 27 places to 58 among 189 economies worldwide in the 2015 Doing Business ranking. The country’s credit rating has improved and the Government has raised US$2 billion in the international capital market in 2015 at a time when investors were moving out of emerging market debt. Debt has also gone down from to 126% of GDP.

Economic growth rates have been low during the past three years but are steadily rising, and the World Bank forecasts GDP growth accelerating to 1.7 percent in 2016 and to over 2 percent in 2017, aided by improving growth in the U.S., low oil prices, and reforms of investment climate regulations. The country continues to be confronted by serious social issues that predominantly affect youth, such as high levels of crime and violence and high unemployment. Jamaica, which had seen its poverty rate drop almost 20 percent over two decades, saw it increase by eight percent in a few years after the onset of the global economic crisis.

The unemployment rate in Jamaica is estimated at 13.5 percent (October 2015, Statistical Institute of Jamaica). The unemployment rate for youth is considerably higher at 30.3 percent, and the average unemployment rate for women is double that for men: 18.5 versus 9.3 percent. However, Jamaica’s skilled labor force and strong social and governance indicators remain its key assets.

Last Updated: Mar 30, 2016

The World Bank has a long standing involvement with Jamaica and has been providing development assistance in various sectors, including agriculture, rural and urban development, education, disaster risk mitigation, infrastructural development, tax administration reform, private sector development, small scale enterprise development and telecommunications.

In line with Jamaica’s 2030 National Plan, the World Bank Group Country Partnership Strategy (CPS) for 2014-2017 focuses on:

  • Modernizing the public sector by strengthening the government capacity and effectiveness.
  • Creating an enabling environment for private sector growth by fostering investments in high potential sectors
  • Building social and climate resilience by strengthening the government’s social protection programs and supporting the development of a comprehensive framework for disaster and climate risk management. 

Under the current strategy, the Bank has disbursed $205 million in budget support. Two additional budget support operations are currently in preparation.

The Bank also provides grant funding to Jamaica. Currently, there are 2 grants totaling US$9.8million.

Last Updated: Mar 30, 2016

The World Bank currently has nine ongoing projects in Jamaica:

  • The Social Protection Project supports the Government’s PATH program, a conditional cash transfer program which ensures school attendance and health visits of children in poor households. As of June 2015, 381,000 Jamaicans benefited from Path.
  • The Rural Economic Development Initiative (REDI)  aims to stimulate rural economic growth through the financing of approximately 110 rural subprojects supporting revenue generating activities in agriculture and tourism while providing critical infrastructure, marketing and management support.
  • The Early Childhood Development Project co-finances the implementation of Jamaica’s National Strategic Plan for Early Childhood Development by improving services for young children and their parents. An Education ‘Passport’ has been implemented to track the progress and growth of each Jamaican child in his first years of life.
  • The Energy Security and Efficiency Project supports the implementation of the government’s energy policy by reducing energy costs and the country’s high dependence on imported petroleum products.
  • The Jamaica Integrated Community Development Project  is an extension of a previous project which aims to enhance access to basic urban infrastructure and services, and contributes towards improved community safety in selected economically vulnerable and socially volatile inner city and rural communities. These projects supported the establishment of the Violence Observatory, which informs policy making and strategic interventions in crime and violence prevention, particularly in high crime parishes. Improvements to community safety are brokered through initiatives such as urban renewal, violence interrupter, school-based violence prevention and augmenting data on victimization and perceptions of safety.  
  • The  Strategic Public Sector Transformation Project seeks to strengthen public resource management and support selected public sector institutions in facilitating a more enabling environment for private sector growth. As of 2015, formal participatory budgeting has become part of the annual budgeting process in Jamaica.
  • The  Youth Employment in Digital and Animation Industries Project builds on successful pilots in Digital Jam 2.0, Digital Jam 3.0 and KingstOOn which precipitated new startups, positioning the Caribbean as a potential hub for the tech industry, while linking the region’s youth with digital entrepreneurs, angel investors and centers of excellence in Silicon Valley and across Latin America.  KingstOOn 2016 attracted hundreds of animators and artists from across the globe to Kingston, and helped showcase work and market to content producers and buyers.

More than 4,000 young Jamaicans are now virtually engaged in digital enterprises following the Digital Jam initiative. With current efforts to establish the Caribbean as an animation hub, the Caribbean could see the creation of as many as 5,000 additional jobs.

  • Jamaica Foundations for Competitiveness and Growth Project aims to strengthen the business environment in Jamaica for private sector investment. The foundation component provides technical assistance and implementation support to address critical business regulation and procedural issues that constrain firm entry, operation and expansion, competition, and trade and logistics.
  • Jamaica Disaster Vulnerability Reductions Project aims to enhance the climate and disaster resilience of key infrastructure assets and the country’s disaster response capacity.

Last Updated: Mar 30, 2016


LENDING

Jamaica: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments