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USAID Information:
External Links:
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Jamaica
The Development Challenge: Achieving sustainable economic growth and eliminating the root causes of
crime and violence are, perhaps, Jamaica’s greatest development challenges today. After a period of
negative growth in the late 1990s, Jamaica’s economy began to show signs of recovery in 2000,
registering a positive 0.7% of real growth in Gross Domestic Product (GDP). This growth continued
through 2002 (1.0%), into the first half of 2003 (3.1%) and the Government of Jamaica projects 2-3%
GDP growth for all of 2003. The reality, however, is that per capita GDP in Jamaica has not grown since
1982. Although poverty has decreased substantially over the past 20 years, many attribute that reduction
to the impact of migrants' remittances as opposed to economic growth. Despite the positive trends in real
GDP growth, the economy is threatened by a widening fiscal deficit (7.7% of GDP for the Jamaican
Government's FY 2002/2003) and extremely high levels of both external and domestic debt. At the end of
2002, the country's debt had reached 140.3% of GDP. The percentage of government revenue used to
service debt remained essentially unchanged at 63% as compared to the previous year, an indicator of
the stifling impact of debt on the government's ability to invest in today's citizens and the leaders of
tomorrow. Furthermore, extremely high interest rates on the government’s domestic debt are stifling
other more productive economic activity. Meanwhile, the government continues to grapple with ways to
control sharp exchange rate fluctuations, while working to reduce the potential negative impact of inflation
(12.2% in October 2003 versus 6.7% one year ago).
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In this economic context, social pressures are inevitable since after debt service and payment of public
sector salaries, only 5.5% of the government’s operating year budget is available for all other
expenditures. Crime and violence remain high, with Jamaica having the third highest murder rate in the
world as well as significant amounts of domestic violence. These high levels of crime and violence erode
the social fabric, chip away at the concept of rule of law, and weaken the very foundation of the bond
between a government and its citizens. Further, high crime and violence lead to exorbitant financial costs
that divert otherwise productive resources into increased security measures, and for managing in the
aftermath of criminal acts. Moreover, crime and violence are symptoms of much more fundamental social
ills such as weakened family structures, poor education, high unemployment, failed justice systems that
are unable to bring redress in a timely manner, and political tribalism.
In 2002, high unemployment at 15.1% remained essentially unchanged from the previous year. The
quality of primary education remains generally low in the public school system, due mainly to a shortage
of resources. Likewise, the upgraded high schools, which have an enrollment of 120,000 students, are
underperforming in the Caribbean Examination Council (CXC) exams and the education system in
general fails to produce graduates with needed skills for the economic marketplace. HIV/AIDS indicators
for Jamaica are finally showing positive trends, due to concentrated and sustained interventions from both
the private and public sectors. The prevalence rate among those in their most productive years, however,
is cause for grave concern as it continues to increase at an alarming rate. Estimates of the HIV
prevalence rates in adults aged 15 - 49 years in 2002 ranged from 1.5 - 2%, with HIV/AIDS being the
leading cause of death in this age group. This rate is higher among sex workers and men who have sex
with men.
The private sector struggles with the problems created by these social ills, while trying to increase
operational efficiency and output. This transformation is essential for their survival in an increasingly
competitive global business environment. As tourism and other productive sectors struggle to expand,
there are increasing pressures on the island's delicate natural resource base, creating the need for
intensified interventions in this sector. Inefficiencies in the judicial system continue to negatively impact
on respect for human rights and the rule of law.
The Jamaican Government is aware of the seriousness of fiscal imbalances on other social problems and
the country's future growth potential; however, it is sometimes criticized for its lack of political will to
aggressively attack governance issues, and take actions that would alleviate its fiscal deficit. In any
event, what is needed to truly turn the current situation around is a shared awareness of these problems
and their seriousness among all stakeholders -- government, private sector, labor, civil society
organizations, political leaders, and the general public, and an acceptance that change is necessary. As
stated by one commentator, all key partners have to place the long-term health of the economy ahead of
short-term parochial interests and all must be willing to contribute to addressing the fiscal problem.
Nascent efforts to build that consensus are emerging from the private sector, but progress on this front is
slow.
The U.S. national interests in Jamaica stem from its proximity to the United States, national security
concerns, and the threat from transnational crime and drugs that have found a secure operating
environment in Jamaica. Also, the benefits of a democratically stable and prosperous partner in the
region and threats to the U.S. citizens emanating from a potential HIV/AIDS pandemic in Jamaica are
important factors.
The USAID Program: USAID's strategic program goal is to help Jamaica transform itself into a more
competitive economy based on a stable political and social framework. Its strategic priorities are: (1)
reducing constraints that limit growth, expansion and competitiveness in the micro, small, and medium
enterprise sectors; (2) facilitating greater environmental sustainability together with economic growth by
encouraging improved environmental management practices; (3) improving reproductive health by
controlling the spread of HIV/AIDS and other sexually transmitted diseases, and addressing risky sexual
behavioral patterns among youth; (4) increasing the literacy and numeracy skills of the country's youth to
provide the human resource skills needed to support a growing economy; (5) improving efficiency and
transparency in the justice system; (6) stimulating development in targeted inner city communities
through activities that are increasing employment, encouraging the use of peaceful means for resolution
of conflict, and improving community-police relations; and (7) strengthening civil society for improved
oversight, local governance, and accountability.
FY 2004 funds will be used not only to implement and complete on-going programs but also to initiate
arrangements for rapid implementation start-up under a new country strategic plan developed for FY 2005
- FY 2009. The Democracy and Governance program, which began in earnest only in 2002, will continue
through FY 2005. USAID plans the implementation of a new strategy as described in more detail in the
attached Data Sheets.
Other Program Elements: In addition to the bilateral activities, a new Presidential Initiative activity, the
Center of Excellence for Teacher Training (CETT), has started one of its three sub-regional sites in
Jamaica. It seeks to upgrade the skills of classroom teachers in order to make them more effective
reading instructors in the early primary grades (1-3). Schools in rural and urban poor communities that
have a significant amount of Creole-dominant speakers are targeted. CETT is being linked to USAID's
education program which also targets primary schools.
Other Donors: Assistance from the donor community remained an important source of the Jamaican
Government's funding for projects in 2002, although the levels declined by 22.8% in 2002 compared to
2001. Of the total $247.7 million provided in loans and grants in 2002, 60% supported projects that are
focused on economic infrastructure (mainly improvements in road and water supply), social infrastructure
(including HIV/AIDS treatment and protection) in health and education, natural resource management,
and security and justice enhancement. The remaining 34% supported the legal and regulatory
environment of the financial sector. The largest multilateral donor in 2002 was the Inter-American
Development Bank (50.9%), followed by the World Bank (19.3%). Based on the portfolio of current
programs, the U.S. Government is the largest bilateral donor, followed by the Japanese and Canadian
governments in that order. Donor coordination is spotty. An annual meeting of donors is held but is
largely focused at the macro level and an actionable agenda rarely emerges from the meeting.
Periodically donors and other partners meet on a sectoral basis.
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