Jamaica’s economy has recently seen rapid growth after years of stagnation. Some attribute this to effective policymaking and a supportive political environment, while others see it as a miracle. However, it could also be argued that this growth came at the expense of preparing for the effects of climate change, which continues to pose risks to important sectors like agriculture and tourism.
Throughout the 1970s, successive Jamaican governments ran chronic budget deficits, but external events played a role as well. Events like the 1973 oil price shock caused a recession and devaluation, leading to increased borrowing for critical imports. By the 1980s, debt service payments exceeded exports, requiring Jamaica to seek bailout loans from the IMF and World Bank. These loans came with harsh austerity measures, leading to cuts in public sector employment and public investment.
Despite years of austerity, Jamaica’s economy continued to struggle, with growth rates steadily declining. Government debt continued to rise, reaching alarming levels by 2012. Youth unemployment was also high, leading to concerns about the nation’s viability as a state. Finance Minister Peter Phillips warned in 2013 about the survival of Jamaica as a viable nation-state if drastic measures were not taken.