Attracting over two million visitors a year, Jamaica has among the strongest and most diversified tourism products in the Caribbean region. The sector accounts for over half of the country’s foreign exchange earnings, one quarter of GDP and of employment. But after decades of slow and sometimes negative growth, the country is taking a strategic turn, with plans to leverage its countless other strengths — including its key geographic location and the largest English-speaking workforce in the Caribbean — to transform, diversify and strengthen its economy.

Located at the center of the Caribbean, right outside the Panama Canal, Jamaica is at the crossroads of North-South and East-West shipping lanes and plans to join Singapore, Dubai and Rotterdam as the fourth node in global logistics.

Since taking office in March of 2016, Prime Minister Andrew Holness has established an Economic Growth Council, headed by investor and philanthropist Michael Lee Chin, chairman of the National Commercial Bank of Jamaica (NCB), to advise the government on the best economic policies with a goal of reaching 5% annual GDP growth by 2020.

With a population of 2.8 million — roughly equivalent to that of Chicago — Jamaica has the largest workforce in the English-speaking Caribbean. To further take advantage of this strength, the Andrew Holness Administration has implemented a long-awaited educational reform slated to take effect at the start of the 2017 school year. A key part of this reform was the establishment of Spanish as the second national language.

With many areas of rich, untapped potential, Jamaica does not come without its challenges. The most prominent is its high crime rate and insecurity — Kingston is said to be among the most dangerous capitals in the world. Tackling this issue is therefore a crucial component of the country’s ongoing socioeconomic transformation.

Following Mr. Holness’ 2016 election campaign, the slogan of which was “From Poverty to Prosperity,” the newly elected prime minister promised a new strategy to achieve sustainability, to be kick started by the newly established EGC, and sustained in the long term by an educational reform to ensure a highly-qualified workforce.

“The quality of the education a child receives, will impact the quality of human resource input in the economy,” he said in February 2016. He added, “We may not all be rich, but no one has to be poor.”

In September 2016, the EGC published a set of policy recommendations known as the eight Growth Initiatives with the ambitious objective of reaching 5% annual economic growth by 2020, known as the “5 in 4.”

“The seeming inability to achieve appreciable levels of economic growth now threatens the social fabric of Jamaica,” said EGC Chairman Michael Lee Chin, recognizing the urgency of a profound economic reform.

Maintain Macro-Economic Stability and Pursue Debt Reduction

“Economic growth and fiscal responsibility are not mutually exclusive,” says the EGC, which recommends a successor arrangement to the IMF’s economic support program, enhancing the credibility and flexibility of the exchange rate regime, and pursue debt for asset swaps in order to accelerate Jamaica’s rate of debt reduction by 2 or 3 percentage points.

Improve Citizen Security and Public Safety

The EGC recognizes insecurity in Jamaica as having deterred investment, destroyed capital formation, and discouraged business development. “Improving citizen security is the single most important growth-inducing reform that Jamaica can undertake,” the report says, recommending a restructuring of law enforcement agencies, a criminal justice reform, as well as addressing the social causes of crime and violence.

Improve Access to Finance

To promote more financial risk taking, which vibrant economies require, the council recommends a number of regulatory reforms, such as reducing minimum capital test requirements for insurance companies, developing new housing finance solutions for lower income households, strengthening the venture capital and angel investor ecosystem, and bringing the taxation of financial services in line with other sectors.

Pursue Bureaucratic Reform to Improve the Business Environment

Tackling bureaucratic inefficiency, the EGC recommends streamlining processes for small businesses employing fewer than 10 people, faster application and permitting approvals, improving courts’ efficiency in areas such as contract enforcement, extending the hours to process more matters, and simplifying import-export procedures.

Stimulate Greater Asset Utilization

To keep assets from remaining dormant, which generates only small returns and does not contribute to jobs or employment, the EGC advises implementing mechanisms that promote greater utilization of these assets to induce economic growth. This would include promoting privatization, public-private partnerships, and similar transactions.

Build Human Capital

Considering education and training deficiencies for high skilled workers as one of the main causes of low productivity, the council recommends training programs aligned with the labour market as well as financing such as loans, incentives and grants. They also favor further work and recommendations by the Labour Market Reform Commission (LMRC).

Harness the Power of The Diaspora

Jamaica’s diaspora, estimated to be equivalent to the country’s entire population, is the second largest of any Caribbean nation, after the Dominican Republic. Already the largest source of foreign exchange, they could play a greater role in investment, knowledge transfer and mentorship, through engagement policies using the Jamaica Diaspora Foundation.

Catalyze the Implementation of Strategic Projects

A number of strategic projects could yield long term benefits for the country, such as establishing Special Economic Zones, redeveloping downtown Kingston, expanding the BPO sector, resorts and other major tourism projects, agro-processing projects, and improving infrastructure such as highways and renewable energy.

By March of 2016, when the new Jamaica Labour Party (JLP) administration took office, however, it had dropped to 120.2%, better than the projected 125.1%, according to data from the Ministry of Finance.

Photo: Howard Jefferson