Overview

Jamaica is an upper middle income country with the largest population in the 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 government steadily accumulated debt, which reached 145 percent of GDP in 2012.

To stabilize the economy, reduce debt and unlock growth, the Government of Jamaica (GoJ) embarked on a comprehensive and ambitious program of reforms for which has garnered national and international support. As part of a comprehensive package, the , the World Bank and the Inter-American Development Bank (IDB) are each lending US$510 million, and the International Monetary Fund (IMF) is lending US$932 million through a four-year program under its Extended Fund Facility. In addition, the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) will continue to support private sector development.

A change in administration after national elections in February 2016 brought further consolidation of government efforts with a dedicated Ministry of Economic Growth and Job Creation, headed by the Prime Minister and advised by a high level Economic Growth Council.

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. in the 2016 Doing Business report Jamaica ranked for a second year in a row among the top ten improvers worldwide. According to the 2016 DB methodology, Jamaica jumped 7 places, moving from 71 in 2015 (back calculation based on new methodology) to 64. The country’s credit rating has improved, and Jamaican bonds trade at a premium in international markets. In 2015, when investors were moving out of emerging market debt, the GoJ issued a US$2 billion Eurobond that enabled it to retire US$2.9 billion of PetroCaribe debt. Prudent macroeconomic policies and careful liability management reduced total government debt to 128 percent of GDP by the end of fiscal year 2015/16.

During the past three years economic growth rates have been steadily rising, although remaining lower than what is needed for eradicating poverty and boosting shared prosperity. 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. 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 in 2008.

The Statistics Institute of Jamaica estimates the unemployment rate in Jamaica at 13.7 percent (April 2016). The unemployment rate for youth is considerably higher at 29.2 percent, and the average unemployment rate for women is almost double that for men: 18.6 versus 9.6 percent. 

Last Updated: Sep 20, 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.

The current World Bank Group Country Partnership Strategy (CPS) for 2014-2017 is aligned to  Jamaica’s 2030 National Plan and focuses on:

Public sector modernization to enhance the government’s capacity and effectiveness.

  • Private sector-led growth to improve business climate and foster investments in high potential sectors
  • 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. 

The World Bank also provides grant funding to Jamaica. Currently, there are two grants focused on improving climate data and information management and supporting social and economic inclusion of persons with disabilities. 

Last Updated: Sep 20, 2016

The World Bank currently has nine ongoing projects in Jamaica:

  • The Social Protection Project supports the Government’s Programme of Advancement Through Health and Education (PATH), a conditional cash transfer program which aims to improve school attendance and health visits of children in poor households. As of February 2016, more than 387,000 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 petroleum products.
  • The Jamaica Integrated Community Development Project  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. The project supports the operationalization of the Crime and 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.

 

The portfolio of the International Finance Corporation (IFC) includes:

  • BMR Jamaica Wind Project

IFC helped finance a new 36 megawatt wind farm in Jamaica, the country’s largest private-sector renewable energy project. The BMR Jamaica Wind Project will help diversify the country’s energy matrix and ease the dependence on imported fossil fuels. It is expected to reduce greenhouse gases by about 66,000 tons CO2 equivalent per year, roughly equivalent to taking 13,000 cars off the road.

  • Advisory Support for Small and Medium Entrepreneurs

IFC is providing advisory support to boost the productivity and income of Jamaican food producers and farmers by increasing the quantity and quality of their goods and enabling access to new markets. The objective is to help develop of a more robust food producing sector, particularly for farmers and small and medium-size enterprises, by raising the quality of their food products and enabling access to new markets for local producers and provide benefits throughout the value chain.

  • Caribbean Credit Bureau Project

IFC is helping Caribbean central banks increase access to finance by improving local credit reporting systems, integrating credit data collection, and introducing greater transparency. FC helped the Jamaican government license its first two credit bureau operators.

  • Sangster International Airport – Montego Bay

IFC has made four investments in the airport since 2003 for a total of US$105 million, including US$53.5 million mobilized from other investors. IFC loans have supported the construction of a new terminal in 2003, the refurbishment of the original terminal buildings in 2005, and the purchase of check-in related equipment in 2008 and the resurfacing of the airport’s runway in 2013.

Last Updated: Sep 20, 2016


LENDING

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

*Amounts include IBRD and IDA commitments