Jamaica is a mixed economy with state enterprises as well as private sector businesses. Major sectors of the Jamaican economy include agriculture, mining, manufacturing, tourism and financial and insurance services. Tourism and mining are the leading foreign exchange earners.
Supported by multilateral financial institutions, Jamaica has, since the early 1980s, sought to implement structural reforms aimed at fostering private sector activity and increasing the role of market forces in resource allocation. Since 1991, the Government has followed a programme of economic liberalization and stabilization by removing exchange controls, floating the exchange rate, cutting tariffs, stabilising the Jamaican currency, reducing inflation and removing restrictions on foreign investment. Emphasis has been placed on maintaining strict fiscal discipline, greater openness to trade and financial flows, market liberalisation and reduction in the size of government. During this period, a large share of the economy was returned to private sector ownership through divestment and privatisation programmes.
The macroeconomic stabilisation programme introduced in 1991, which focused on tight fiscal and monetary policies, has contributed to a controlled reduction in the rate of inflation. The annual inflation rate has decreased from a high of 80.2% in 1991 to 7.9% in 1998. inflation for FY1998/99 was 6.2% compared to 7.2% in the corresponding period in CUU1997/98. The Government of Jamaica remains committed to lowering inflation, with a long-term objective of bringing it in line with that of its major trading partners.
After a period of steady growth from 1985 to 1995, real GDP decreased by 1.8% and 2.4% in 1996 and 1997, respectively. The decrease in GDP in 1996 and 1997 was largely due to significant problems in the financial sector and, in 1997, a severe island-wide drought (the worst in 70 years) that drastically reduced agricultural production. In 1997, nominal GDP was approximately J$220,556.2 million (US$6,198.9 million based on the average annual exchange rate of the period).
Recent economic performance shows the Jamaican economy is recovering. Agricultural production, an important engine of growth increased 15.3% in third quarter of 1998 compared to the corresponding period in 1997, signaling the first positive growth rate in the sector since January 1997. Bauxite and alumina production increased 5.5% from January to December, 1998 compared to the corresponding period in 1997. January's bauxite production recorded a 7.1% increase relative to January 1998 and continued expansion of alumina production through 2009 is planned by Alcoa. Tourism, which is the largest foreign exchange earner, showed improvement as well. In the third quarter of 1998, growth in tourist arrivals accelerated with an overall increase of 8.5% in tourism earnings in 1998 when compared to the corresponding period in 1997. Jamaica's agricultural exports are sugar, bananas, coffee, rum,and yams.
Jamaica has a wide variety of industrial and commercial activities. The aviation industry is able to perform most routine aircraft maintenance, except for heavy structural repairs. There is a considerable amount of technical support for transport and agricultural aviation. Jamaica has a considerable amount of industrial engineering, light manufacturing, including metal fabrication, metal roofing, and furniture manufacturing. Food and beverage processing, glassware manufacturing, computer software and data processing, printing and publishing, insurance underwriting, music and recording, and advanced education activities can be found in the larger urban areas. The Jamaican construction industry is entirely self-sufficient, with professional technical standards and guidance.
Since the first quarter of 2006, the economy of Jamaica has undergone a period of staunch growth. With inflation for the 2006 calendar year down to 6.0% and unemployment down to 8.9%, the nominal GDP grew by an unprecedented 2.9%. An investment programme in island transportation and utility infrastructure and gains in the tourism, mining, and service sectors all contributed this figure. All projections for 2007 show an even higher potential for economic growth with all estimates over 3.0% and hampered only by urban crime and public policies.
In 2006, Jamaica became part of the CARICOM Single Market and Economy (CSME) as one of the pioneering members.
Exports: (1999) 1,238 billion $ (Natural resources: 55.7%, Food 19.1%, Bananas 4%, Chemicals 3.6%, Machinery 2.2%). The main export countries: United States 33.4%, Canada 14.1%, United Kingdom 13.4%, Netherlands 10.2%, Norway 5.8%, France 5%, Germany 4%, and Japan 2.3%.
Imports: (1999) 2,89 billion $ (Energy 50.5%, Machinery and Equipment 7.6%, Consumer goods 33.2%). The main import countries: United States 48.1%, Trinidad and Tobago 7.8%, Japan 6.9%, France 5%, United Kingdom 3.7%, and Canada 3%.
EXPORTS AND IMPORTS FOR JANUARY 2007
Exports: (January 2007) Total Goods Exports 166,495 (US$000) (General Merchandise Exports 93.4%, Freezone Exports 2.6%, Goods Procured in Ports 4.0%).
Imports: (January 2007) : Total Goods Import 511,015 (US$000); General Merchandise Imports 97.8%, Freezone Imports 0.3%, Goods Procured in Ports 1.8%).
The transport infrastructure in Jamaica consists of roadways, railways ship and air transport, with roadways forming the backbone of the island's internal transport system.
The Jamaican road network consists of almost 13 049 miles (21,000 kilometres) of roads, of which over 9 321 miles (15,000 kilometres) is paved. The Jamaican Government has, since the late 1990s and in cooperation with private investors, embarked on a campaign of infrastructural improvement projects, one of which includes the creation of a system of freeways, the first such access-controlled roadways of their kind on the island, connecting the main population centers of the island. This project has so far seen the completion of 21 miles (33 kilometres) of freeway.
Railways in Jamaica, as in many other countries, no longer enjoy the prominent position they once did, having been largely replaced by roadways as the primary means of transport. Of the 169 miles (272 kilometres) of railway found in Jamaica, only 35 miles (57 kilometres) remain in operation, currently used to transport bauxite.
There are two international airports in Jamaica with modern terminals, long runways, and the navigational equipment required to accommodate the large jet aircraft used in modern air travel: Norman Manley International Airport in Kingston and Sangster International Airport in the resort town of Montego Bay. Both airports are home to the country's national airline, Air Jamaica. In addition there are local commuter airports at Tinson Pen (Kingston), Port Antonio, Ocho Ríos, and Negril which cater to internal flights only. Many other small, rural centers are served by private fields on sugar estates or bauxite mines.
Ports, shipping and lighthouses
Owing to its location in the Caribbean Sea in the shipping lane to the Panama Canal and relative proximity to large markets in North America and emerging markets in Latin America, Jamaica receives high container traffic. The container terminal at the Port of Kingston has undergone large expansion in capacity in recent years to handle growth both already realised as well as that which is projected in coming years. Montego Freeport in Montego Bay also handles a variety of cargo like(though more limited than) the Port of Kingston, mainly agricultural products.
There are several other ports positioned around the island, including Port Esquivel in St. Catherine (WINDALCO), Rocky Point in Clarendon, Port Kaiser in St. Elizabeth, Port Rhoades in Discovery Bay, Reynolds Pier in Ocho Rios, and Boundbrook Port in Port Antonio.
To aid the navigation of shipping, Jamaica operates nine lighthouses.