Magazine article Foreign Policy

The New Economic Recovery Model: The Success of the New Jamaican Government's Reforms and Innovative Business Initiatives Are Bringing Increasing International Recognition and Investment Opportunities

Magazine article Foreign Policy

The New Economic Recovery Model: The Success of the New Jamaican Government's Reforms and Innovative Business Initiatives Are Bringing Increasing International Recognition and Investment Opportunities

Article excerpt

Since coming to power in 2016, the new Jamaican government, led by Prime Minister Andrew Holness, has transformed the country's economy and business environment. The budget deficit has been eliminated, debt reduced, taxes reformed and legislation introduced to make doing business easier. "Confidence is really high," says Holness, "not only from consumers, but from businesses. Investment projects that could not get going are now being implemented."

Leading Jamaican businessman Delroy Dell, Vice-President and General Manager of Noranda Bauxite/New Day Aluminum (Jamaica), agrees, "Business confidence is the highest it is been in years and the numbers are supporting this." Those numbers include the fact that Jamaica has risen five places to 67th in the World Bank's Ease of Doing Business Index, in which it was one of 2016's top 10 most improved countries worldwide. Inflation has fallen to a 45-year low and the top credit rating agencies have upgraded Jamaica and given positive feedback, Foreign direct investment inflows have improved dramatically --in 2015/16 they rose 42% to nearly $1 billion and Moody's estimates they will exceed 7% of GDP in 2016/17.

The government plans to continue revitalizing the country, with a priority for 2017 being public sector reform, in order to increase efficiency. It also wants more transformation of the business landscape, to accommodate more international players that want to be located in a pro-business destination, that offers competitive advantages through unique materials, like bauxite and minerals; low operational costs; and a strategic location.

Creating a global logistics hub

Holness intends to make Jamaica the Americas' premier logistics node and "the center of the Caribbean." And the country is well placed to achieve this--it is just outside the Panama Canal, is the third largest English-speaking country in the west, has good telecoms infrastructure, and excellent sea and air connections.

To build this global logistics hub, and the economy in general, the government is focusing on public-private partnerships (PPPs). As Michael L. Henry, Minister of Transport and Mining, says, "the PPP structure is the driving force of the country's economic development." Jamaica is becoming a leader in innovative PPPs and has risen rapidly to fourth in the PPP program index for Latin America. …

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