This information comes from the assessment conducted in country for the Jamaica report, which was published in January 2008.
Each of the areas covered in this report have an immediacy that cannot be overstated. Namely, they each have a direct and critical bearing on Jamaica’s ability to rise to the promise of economic reform based on sound market principles that was enunciated by its new government, elected in September 2007. The new government faces serious long-term problems in the economy, including large-scale unemployment, underemployment and economic informality; a high debt burden attributable to government bailouts in the past of ailing sectors of the economy; and a crime problem – coupled with the perception of even more crime – that acts as a drag on economic growth.
Jamaica’s performance in the World Bank’s most recent Doing Business report, particularly compared to its showing one year earlier, illustrates the absence of economic change for the better prior to mid-2007 – the country actually fell back in its showing as other countries have more effectively streamlined their business environments. Although the new government faces deep challenges, it also has the opportunity to turn around key areas that have diminished Jamaica’s economic performance in recent years.
Both prior to its election and in the weeks following, the new government identified issues of land titling, tax policy and administration, access to credit, and construction licenses as among its key priorities, chiefly due to the weak showing of each of these areas in the economy. (These areas parallel, respectively, the World Bank’s categories of registering property, paying taxes, getting credit, and dealing with licenses). In considering its own role in supporting economic growth in Jamaica, the USAID mission in Kingston further identified the country’s legislative process as an area that requires significant reform, chiefly so that the nation’s economic goals can be met in a timely, effective, and sustainable manner.
More specifically, with respect to registering property, a recent land titling initiative supported by the Inter-American Development Bank (ADB) produced disappointing results, and enormous swaths of land in Jamaica continue to lack the legal clarity of ownership that is necessary for individuals to build future wealth. With respect to paying taxes, Jamaica’s performance in the Doing Business report, which surveys the number of steps and time it takes for an enterprise to comply with its tax obligations, as well as countries’ specific rates of taxation, ranked among the poorest in the world. In the area of getting credit, micro, small and medium-sized enterprises (MSMEs) operate in a notoriously weak environment. Jamaica lacks certain fundamental tools that are necessary to move forward in this area, such as a credit bureau or a modern system of secured transactions.
The area of construction licenses has been targeted by the new government for reform. A promising start in this area may lead to lessons for success that will be useful in approaching reform in the other areas. As for legislative process, there is little prospect for sustainable reform in any of these substantive areas unless significant steps are taken to improve the parliament’s engagement in new initiatives in law reform.
Significantly, in the World Bank’s Doing Business analysis, Jamaica’s performance in the Latin America-Caribbean region is relatively strong – it places 9th out of 31 countries surveyed. Five of the countries ranking higher than Jamaica are located in the Caribbean – Puerto Rico (1); St. Lucia (3); Antigua and Barbuda (4); St. Vincent and the Grenadines (6) and Belize (8). Thus, one immediate opportunity before Jamaica is to learn from its neighbors, where market-oriented economic policies have served to make them attractive destinations for doing business.
