Jamaica - The Road to Sustained Growth : Country Economic Memorandum

World Bank

Jamaica - The Road to Sustained Growth : Country Economic Memorandum

Autores

World Bank

Editor

Washington, DC

Descripción

Jamaica's poor growth performance has a number of well-known explanations, but they need to be supplemented for the latter half of the 1990s, by the loss of competitiveness. The negligible (measured) GDP growth in the 1990s is usually attributed to two factors: an adverse external climate and the financial crisis that arose from bank privatization to poorly capitalized investors, and, financial liberalization, unaccompanied by an appropriate regulatory strengthening. The poverty headcount however, was halved between 1992 and 1998, despite negligible measured GDP growth, which can be largely explained by a conjunction of several factors particular to the period: underestimated GDP growth, judging from the growth in consumption of power, and meat and fish, as well as the rapid growth of currency usage; inflation, which hurts the poor disproportionately, fell sharply; the relative price of food declined, owing largely to trade liberalization and the appreciation in the real exchange rate; other factors may have been the rise in real wages, and remittances. But two important poverty-reducing factors are unlikely to continue to operate in the future, which means that further reduction of poverty is likely to depend on achievement of sustained growth. The report questions Jamaica's self-sustaining and job-creating growth restoration, and argues that this requires improving international competitiveness and productivity, while also addressing short-term exigencies. The policy options are grouped into three categories - those necessary to limit the risk of a crisis and its effect, with a likely immediate impact; those likely to have an impact in the short-term; and, those likely to have an impact in the medium and long-term, but on which action is nonetheless needed now. The report suggests a 'bandwagon' approach to reforms, with policy actions needed on several fronts, in order to improve prospects for sustained growth, including measures that help avoid crises, since crises hurt the poor and damage growth prospects. Such an approach could involve: crisis-proofing actions; actions with short-term impact; and, actions with medium-long-term impact. Given that policy choices are likely to be difficult, an approach based on social dialogue and consensus-building is essential to creating ownership for future reforms by all stakeholders, and for maintaining and improving social peace.

Palabras clave

ACCOUNTABILITY, AGRICULTURE, ANNUAL GROWTH, BALANCE OF PAYMENTS, BANKING CRISIS, BONDS, BUSINESS ENVIRONMENT, CAPITAL FORMATION, CITIZEN, CLIMATE, COMPETITIVENESS, CONSUMER PRICE INDEX, CPI, CRIME, CRIME RATES, CRISES, DEBT, DEVELOPMENT INDICATORS, DIRECT INVESTMENT, ECONOMIC HISTORY, ECONOMICS, EMPLOYMENT, EXCHANGE RATE, EXCHANGE RATES, EXPENDITURES, EXPORTS, FINANCIAL CRISIS, FINANCIAL LIBERALIZATION, FINANCIAL SECTOR, FISH, FREE TRADE, GDP, GOVERNANCE INDICATORS, GROWTH PERFORMANCE, GROWTH PROSPECTS, GROWTH RATES, HOUSING, IMPORTS, INCOME, INCOME INEQUALITY, INCOME SHARE, INFLATION, INTEREST RATES, INTERNATIONAL COMPARISONS, INTERNATIONAL TRADE, INVESTMENT RATES, LABOR FORCE, LABOR MARKET, LIVING CONDITIONS, LORENZ CURVE, MIGRATION, MONETARY POLICY, NATIONAL ACCOUNTS, POLICY OPTIONS, POLICY REFORMS, POOR GROWTH, POVERTY REDUCTION, PRICE INCREASES, PRIVATE SECTOR, PRODUCTIVITY, PRODUCTIVITY GROWTH, PUBLIC SECTOR, PUBLIC SERVICE, QUALITY OF LIFE, RAPID GROWTH, REAL EXCHANGE RATE, REAL WAGES, SAFETY, SAFETY NETS, SHORT-TERM IMPACT, SUSTAINABLE GROWTH, TAX BASE, TAX RATES, TAXATION, TERTIARY EDUCATION, TOTAL FACTOR PRODUCTIVITY, TRADE LIBERALIZATION, TRADE POLICY, TRANSPARENCY, URBAN AREAS, VALUE ADDED, VIOLENCE, WAGES, WORLD TRADE ORGANIZATION, WTO, YOUTH COUNTRY ECONOMIC WORK, REFORM POLICY, GROWTH PATTERNS, COMPETITIVENESS, PRODUCTIVITY, FISCAL SUSTAINABILITY, POLICY OBJECTIVES, GROSS DOMESTIC PRODUCT, EMPLOYMENT STRATEGIES, POVERTY INCIDENCE, EXTERNAL SHOCKS, FINANCIAL CRISES, LIBERALIZATION, REGULATORY FRAMEWORK, REAL EXCHANGE RATE, MONETARY POLICY, WAGES, COST ESTIMATES, SOCIAL ASPECTS, CRIME DETERRENCE, RISK MANAGEMENT, SOCIAL DIALOGUES, CONSENSUS BUILDING, STAKEHOLDER PARTICIPATION, SOCIOECONOMIC CONDITIONS