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How Does Jamaica Make Money? | by Sheree-Anita Shearer, Associate Writer
Jamaica is well-known and loved all around the world for many different reasons. It is a top tourist spot because of our food, music, and beaches among many other things. But it is no secret that Jamaica's economy is unstable and has been for a few years.
Jamaica is classified as an upper-middle-income economy with a poverty rate of 11% as of 2021 but, the country has not seen substantial growth for over 30 years. This is due to our heavy reliance on imported goods such as gas and clothing as well as a high debt rate. Our dependence on other economies also affects the stability of our own.
So how does Jamaica make money? What are the main industries? Is the economy experiencing any growth? Is Jamaica in debt? These are the questions I will answer.
Jamaica’s main industries are tourism, agriculture, mining and manufacturing. Of late, the Business Process Outsourcing (BPO) industry has become one of Jamaica’s main industries as well.
The main source of income and the way Jamaica makes money is through the exportation of bauxite, and various food items including coffee, cocoa, and bananas just to name a few. In years gone by, especially in pre-independence and a few years after, Jamaica’s main source of income was agriculture.
However, that has since changed and now, the main two sources of income are tourism and remittances from Jamaicans living elsewhere.
We receive more than a million visitors annually. Correspondingly 50% of the country’s foreign exchange earnings and ¼ of the total labour market comes from tourism.
Many people are needed to work at resorts but the ripple effects of tourism lead to employment at attractions, restaurants and transportation services. Self-employed persons as well, such as craft vendors benefit from tourism.
Many Jamaicans seek employment overseas to work on farms, in healthcare and in the tourism industries. These Jamaicans usually send money back home through remittance agencies for their families back home. Jamaicans who reside overseas also send money home to support their loved ones.
These gifts may come monthly or seasonally (e.g Christmas, back to school). In times of disaster such as hurricanes, the support is increased. In fact, feedback from the financial sector shows that remittance inflows to the island increased during COVID-19 which allowed many Jamaicans to survive the period.
The discovery of alumina in Jamaica in the 1940s was great for the economy as it remains our largest export. Some countries that bauxite is exported to are China, Norway and the United States. The declining demand for alumina has affected the economy in a direct way as factories have been shut down causing job losses.
We long for the days when we will have the opportunity to reopen them to begin growing this side of the economy again.
Agriculture is one of the biggest earners for Jamaica. Not only do farmers supply the tourism industry, restaurants, supermarkets and markets. But we also export some of our products as well.
Major produce exports:
There are some emerging export crops such as mangoes which were recently reinstated for export to the USA. The emergence of agro parks is expected to boost agricultural production and enhance export offerings opening the gateway for increased agricultural earnings.
Yes, Jamaica’s current debt is currently about 13.69 billion US dollars. Most of this is owed to the International Monetary Fund (IMF), the International Bank for Reconstruction and Development and the Caribbean Development Bank. These loans are usually taken for building better infrastructure such as roads or for educational assistance etc.
We also owe a significant amount to the United States and China. In the past, we had borrowed and repaid the countries of Germany and Kuwait.
Jamaica joined the IMF on February 21, 1963, and has since then, entered into arrangements for financial assistance a total of 16 times. Jamaica has originally repaid its loans to the IMF. But, in 2013 after a long struggle with the instability of the economy and the inability to improve the infrastructure and quality of life for the country, the government had to seek financial assistance yet again.
As of December 31, 2021, the loans and purchases owed to the IMF is 651.52 million.
Despite it being slow, Jamaica’s economy has experienced some growth. In fact, at the end of 2019 and just before the Covid-19 pandemic, Jamaica had managed to stabilize its economy.
Much of this growth comes from more investments both from foreigners as well as Jamaicans who wish to diversify their portfolios and create multiple streams of income for their families. More Jamaican companies are also going public to generate more revenue as a means to expand their companies offerings and locations.
The country saw a 6% growth at the end of 2021.
We look forward to a Jamaica in the near future that is the go to country to live, work and raise families.
Now that we know how the country earns money, let's find out how the Jamaican people earn money.
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