Market Overview
The Jamaican economy grew by 1.5% in 2007. Economic expansion has been underpinned by strong growth in tourism (with tourist arrivals set to reach three million by yearend), agriculture and electricity. Growth would have been even more robust were it not for Hurricane Dean in 2007 and the chronic shortage of cement, which crippled the fast growing construction sector. The current growth momentum could accelerate in 2008 given the massive investment in the tourism, transportation (air and sea ports) and mining sectors.
Inflation, as measured by the CPI, has retreated from the high of 12.9 percent recorded in 2005, moderating to 7.1 percent in 2007. Energy and food and drink prices have provided the major inflationary impulses.
The US remains Jamaica's main trading partner, accounting for almost 40 percent of total trade. On average Jamaica imports 45 percent and exports 30 percent of its goods from and to the US. Jamaica's other major trading partners are Trinidad and Tobago, the UK, Canada, Japan, China and Venezuela.
Bilateral relations between Jamaica and the United States are good. Although the two countries occasionally disagree on specific issues, most notably relations with Cuba, Jamaica has supported many U.S. objectives in the Caribbean region. There are no major political issues affecting the business climate in Jamaica. Both major political parties favor attracting foreign investment.
Market Challenges
Since the 1990’s Jamaica has embarked on a program of gradual duty reduction, which has seen reductions in several categories. Permits and import licenses are now only required for a few items. These include meat, ground provisions, fruits, vegetables, drugs, firearms, used tires and two-way radios. While it has generally become easier to import items into Jamaica, technicalities exist, (such as the growing importance of standards issues), of which one needs to be aware.
Jamaica operates a Common External Tariff (CET) along with other trading partners of the Caribbean Community (CARICOM). Goods imported from third countries are subject to the duties listed in the CET but goods imported from CARICOM countries and are certified to be of CARICOM origin do not generally attract these import duties. These CARICOM origin goods enjoy duty-free status: that is, they are not subject to Customs import duty, but local taxes, General Consumption Tax, and Special Consumption Tax are payable.
In addition to the Common External Tariff, other payable fees include the Customs User Fee and the Standards Compliance Fee (SCF). The SCF is 0.3% of the CIF value of the import and is collected on behalf of the Jamaica Bureau of Standards. Many items (such as motor vehicles) also attract additional special taxes. The General Consumption Tax (GCT) is also usually payable upon entry. The GCT is a sales tax, which is recoverable from the final consumer.
Market Opportunities
The United States is Jamaica's primary trading partner. Proximity, quality, and service have encouraged Jamaican businesspeople to purchase from the United States.
After a period of lackluster economic activity, projections are that Jamaica could have improved growth prospects in the years to come. Sectors which should have good prospects are Building Products, Safety/Security Equipment, Telecommunications Equipment, Drugs and Pharmaceuticals, tourism-related activities, non-traditional agriculture, agribusiness, and Information and Communications Technology.
The following sectors have attracted the most attention by foreign investors: Agribusiness, Chemicals and Minerals, Energy, Entertainment (Music and Film), Information and Communications Technology, Infrastructure, Mining, and Tourism.
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