ECONOMY OF JAMAICA

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THE ECONOMY OF JAMAICA

The Economy

Historically, the Jamaican economy has had an agricultural base, dependent on a few staple export crops, primarily sugar and bananas. New economic development began with bauxite mining (after 1952), and the tourism boom in the 1950s and 1960s. In the 1990s, tourism has become the major earner of foreign exchange.

The international recession which occurred in the mid-1970s, adversely affected economic growth.
Jamaica's economic stabilisation and adjustment process, which began in the 1980s, advanced significantly during the 1990s as the stages of deregulation and liberalisation were accelerated. This included the liberalisation of the foreign exchange market, market determined interest rates, removal of price controls on goods, elimination of subsidies on products, lowering of fiscal borrowing requirements, and increasing the pace of privatisation of government owned entities.

The main impetus for economic growth has come from expansion in the tourism industry, rehabilitation of export in agriculture, recovery in the bauxite/alumina industry (after a setback in the 1980s) and in the service sectors.

In 1995 the economy grew by 0.4%, agriculture by 2.2% in 1995 while mining, aluminum/bauxite grew by 6.5.% and gypsum by 3.6%.

International Monetary Fund (IMF)

In September 1995, Jamaica successfully terminated eighteen years of a borrowing relationship with The International Monetary Fund.

The National Industrial Policy (NIP)

On Wednesday, March 27, 1996, "The National Industrial Policy - A Strategic Plan for Economic Growth and Development" was presented through Parliament to the nation.
The four essential components of the Policy are:

1. Macroeconomic Policy
2. Industrial Strategy
3. Social Policy
4. Environmental Policy

The Policy has set specific targets for economic growth and targeted strategic clusters for development. An integral part of the Policy is a Social Partnership which sets out agreements by the three social partners-Government, labour and employees with regard to a number of areas of economic organisation.