In the last couple of decades, the Jamaican government has undertaken an ambitious programme of economic liberalization, removing exchange-control restrictions on foreign investments and cutting tariffs. Jamaica now combines a free-market economy with some remaining state-owned enterprises. Considering the small size of the island, the economy has a wide variety of industrial and commercial activities, including agriculture, mining, manufacturing and tourism, avoiding dependence on foreign aid. However, movements in relative price levels suggest a serious weakness in both competition in domestic markets and international competitiveness.
Free-trade zones have stimulated investment in garment assembly, light manufacturing, and data entry by foreign firms. However, restrictive import and export licensing rules persist, along with import fees and taxes, and export subsidies, adding up to a moderately low openness score. Although this is in line with other similarly-ranked countries, it is worrying for an island economy. Levels of capital investment are also low.
Low levels of mass education are perhaps one reason for this lack of productive investment. In terms of highly-skilled human capital, Jamaica’s capacity for innovation is seriously limited, as reflected in the levels of high-tech exports and the number of patents granted. Nonetheless, entrepreneurship scores well, at least in regard to the low costs of starting up a business, suggesting an improving regulatory environment.
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Jamaica is nearly the only country that ranks better on Economic Competitiveness than on Comparative Liveability in Latin America. This is due to consistently moderate or mediocre scores on most liveability indicators. The few positives include the climate score (which may come as no surprise), and generous amounts of leisure time (nearly 6g hours per day) as well as the widespread reporting of clean air, according to the Gallup World Poll. Still, the country’s favourable environment is seen as under threat from population pressures and pollution: relatively few Jamaicans report satisfaction with the preservation of the environment, according to Gallup.
At $3,907, low average incomes lead to serious poverty. Jamaica faces high levels of crime and violence, and unemployment is over 10%. This has seriously damaged the country’s social capital, and predominantly affects the young. Low levels of community involvement in volunteering and charitable giving are reported.
More positively, 91%g of Jamaicans report that they have someone to rely on, suggesting a good family life. Even though HIV/AIDS has become a major health challenge in recent years, a health-adjusted life expectancy of 65.1 years is on a par with regional standards, although well behind global leaders. Satisfaction with personal health is high.
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