Jamaica’s Economic Growth: A Double-Edged Sword? The Dark Side of Miracle Economy

Jamaica’s recent economic growth has been hailed as a miracle by some, while others attribute it to effective policymaking in a supportive political environment despite many challenges. However, an alternative perspective suggests that Jamaica’s economic recovery came at the expense of its preparedness for the effects of climate change. As climate change continues to pose new dangers to Jamaica’s core sectors of agriculture and tourism, the country’s economic future may become more problematic.

In the 1970s, Jamaica ran chronic budget deficits due to external events beyond their control such as the 1973 oil price shock and increased borrowing to purchase critical imports. By 1986, debt service payments had risen to 35 percent of exports, with debt servicing accounting for over 40 percent of government spending. To address rising debt levels, Jamaica sought bailout loans from the International Monetary Fund and World Bank in the 1980s but this came with harsh austerity measures including significant cuts to public sector employment and public investment by the government. Austerity had a significant impact on the economy, with average growth dropping from 2.3 percent in the 1980s to 0.9 percent in the 2000s and even seeing negative growth by an average of -2% annually from 2010-2012 despite years of austerity government debt increased from 91.8% of GDP in 2000 to 143.9% in