Jamaica

Jamaica is one of the biggest island states in the Caribbean. Independent since 1962 with a parliamentary two party system, the country is a democratic state.

The economy is founded on three key sectors: tourism, bauxite and agricultural production. Jamaica scores well for different social indicators such as life expectancy, schooling and literacy rate.

After high economic growth in the 1960s and early 1970s, the country was confronted with problems after the first oil shock. Public finances position and the external balance were in severe disequilibrium by 1980, which led to structural adjustment programmes developed by the Bretton Woods institutions. After the economic and social distress of the 1980s and early 1990s, the macro economic situation has much improved. For the last few years the government budget was in surplus and the foreign exchange reserves are now in the order of US$ 450 million.

Poverty remains the most urgent social problem. Solutions are to be sought in improving social services and the further diversification of the economy.

Jamaica has a long history of banana production with commercial exports commencing in 1900 and reaching their peak in 1936 with 355,000 tonnes, of which 259,000 tonnes were exported to the UK. 4,360 hectares of land are now under production, with banana exports of 86,074 tonnes in 1996.

Banana production and related internal transportation and distribution of inputs are a source of between 5 and 10 per cent of total employment in Jamaica. Bananas rank second only to sugar in economic significance within the agricultural sector and the export trade makes a valuable contribution to foreign exchange earnings.

Bananas are grown for export mainly in three parishes - St. Thomas, Portland and St. Mary - where due to soil type, topography, weather patterns and related factors, the possibility of diversification into other crops is very limited. The demise of the industry in these areas would cause serious economic hardship and unrest, bringing unemployment levels up to 50 per cent.

The major factor inhibiting the Jamaican banana industry is hurricanes, with sixteen occurrences since 1900. Following Hurricane Allen in 1980, exports fell to a record low of 11,000 tonnes in 1984. Since then, Jamaica has undertaken a careful restructuring of the industry with the focus on efficiency and productivity. This focus was intensified following the establishment of the single European market which for the first time imposed a limit on duty-free imports from the Caribbean and other ACP countries.