The Economy of Jamaica

Jamaica's cultural strength is a great support for its economy

Photo credit: © Djembe |

Jamaica's Economy

Jamaica's rich economic history has shaped the population's unique strength of character. From leading the world's economy in sugar production to bankrupt socioeconomic turmoil, the Jamaica you see today is a country shaped by a tumultuous economic past.

Economic History

Sugar has always been the most abundant crop on the island, and for most of Jamaica's history, sugar production was the top industry. Spanish settlers started sugar cultivation in 1520 until the British invaded in 1655 and took over the island. In 1670, the “Peace of Madrid” gave Britain official rule of the island, but the English weren't the most merciful of leaders.

Slavery led to the first significant uprising in 1690, a year that marked the beginning of a long history of social unrest and racial divisiveness. During the times of slavery, Jamaica experienced more revolts and uprisings than any other Caribbean colony. In 1760, a now famous slave by the name of Tackey led one of the largest slave revolts in history when more than 600 slaves rioted, killing whites and burning farms.

Still, profits and production soared. As the world's largest single producer of sugar, Jamaica became known as the “jewel of the British crown” in the 18th century. The island exported 22 percent of the world’s sugar supply, and plantation owners prospered.

In 1830, mulattoes, or people of mixed race, were enfranchised. Many used their new rights to fight for the still-oppressed blacks. One such defender, a Baptist deacon named Sam Sharpe, led a slave revolt in 1831. The revolt was put down harshly by the government; hundreds were killed, and Sharpe and other key players were captured and hanged. Others caught in the fray were beaten or flogged.

The brutality of the retaliation stirred sympathetic sentiments in England, and in 1834 slavery was abolished with a six-year program of apprenticeship to smooth the transition. The program didn’t work as well as planned, however, because most blacks would rather have been released to fend for themselves than stay on the plantation and be reminded of their slavery.

In 1838, unconditional emancipation was declared, two years earlier than intended. This mass exodus from plantation life left the plantation owners without cheap labor and put a tremendous strain on the economy. From 1830 to the early 1900s, indentured servants from India and Japan immigrated to Jamaica.

In 1846 the British government passed the Sugar Duties Act, putting a tax on Jamaica’s sugar export and forcing the island’s sugar prices to compete worldwide. That, along with the development of the sugar beet in Europe, reduced demand and further depressed the Jamaican economy. Unemployment rose and wages fell.

As conditions continued to worsen into the 1860s, mulattoes like George William Gordon fought for improvements for the predominantly black lower class. The American Civil War from 1861-1865 brought further depression as the Union’s blockades of the Confederacy prevented Jamaica from trading with its chief trading partner.

By 1865, the economic and social conditions came to a head when Gordon and Paul Bogle led the Morant Bay Rebellion. The governor of Jamaica at the time, Edward Eyre, retaliated with such ferocity, by burning houses and killing 437 people including Bogle and Gordon, that he was removed from his position in 1866 and Jamaica adopted a Crown Colony system of government. The new government promised many social reforms, which never happened, and the disappointment led to further social unrest.

By the early 1900s, the economy started a recovery fueled by a developing banana crop. Some prosperity returned to the island, but most of it stayed in the hands of the landowners, and poverty still remained high. The Great Depression halted recovery in the 1930s, and unemployment rose again, resulting in strikes and riots. One such strike was led by Alexander Bustamante at the West Indies Sugar Company and resulted in the founding of Jamaica’s first labor union, the Bustamante Trade Union (BTU). This spawned a political party called the Jamaican Labor Party (JLP), and about the same time, Bustamante’s cousin, Norman Manley, founded the People’s National Party (PNP).

The 1940s saw an economic upturn once again started by World War II when the Caribbean islands were supplying Britain with food and raw materials. Bauxite, the primary component of aluminum, was discovered on the island. Jamaica was also starting to be seen as a vacation spot. This was the launch of Jamaica’s two current largest industries: tourism and mining.

In 1944, the first election was held with universal adult suffrage and was won by the JLP, which adopted an increasingly capitalist philosophy. Prosperity was seen on the island with greater diversity than ever before. With developing industries and increased exports, the port cities became bustling centers of commerce and rural dwellers flocked into the cities in pursuit of ‘the good life.’ Into the 1960s, tourism continued to take an increasingly significant role in the economy, and both bauxite and agricultural exports grew.

In 1962, Jamaica became an independent nation and, led by the JLP, continued to prosper and develop. By the early 1970s, Jamaica was the world’s leader in bauxite, exporting to Canada, the United States, Norway and the USSR.

In 1972, however, power changed hands. The PNP, led by Norman Manley’s son, Michael, won the election, and Michael Manley led the nation toward democratic socialism. The industrialization of Jamaica halted in mid-stride, and while the nation was on the fence, trying to decide whether to industrialize or return to its agricultural roots, the economy faltered.

The cities didn’t have the housing or jobs to support the massive influx from the countryside. Inflation soared more than 50 percent, unemployment skyrocketed, the older neighborhoods that these people settled in became today’s inner city slums, and society became increasingly polarized.

A full-fledged war broke out leading up to the election of 1976. Gangs terrorized towns to show their support for the JLP or the PNP, pressuring innocents to sway their votes and breaking into gunfights in the streets. Manley and the PNP won the election, and continued the progress of their socialist agenda, developing ties with Cuba, a move that elicited ire from the United States. America sanctioned Jamaica and prepared to topple the government.

The sanctions proved effective, however, in-and-of themselves. Businesses pulled out of the Jamaican economy, tourism dropped, and the economy plummeted. The increasingly poor conditions led to further civil unrest, and in the most violently warred election yet, there was a regime change in 1980. Leading up to the 1980 elections, nearly seven hundred people were terrorized or killed in gang wars, but Edward Seaga of the JLP emerged victorious.

In the 1980s Seaga began the process of trying to boost the economy once more, but faced several obstacles. The recovery was slow and difficult due to uncontrollable factors. Reduced world demand for aluminum depressed the bauxite industry, and in 1988 Hurricane Gilbert dealt a blow to the island that damaged nearly every industry in the nation, especially tourism.

In 1989 Michael Manley reinvented himself as a “mainstream realist” and won yet another election, but due to health problems he relinquished power in 1992, passing the helm to Percival James Patterson, Jamaica’s longest running prime minister. Patterson won both the 1993 and the 1997 elections by a landslide and remained in power until 2006 when Portia Simpson Miller became the first female Prime Minister in Jamaica.  She lasted for only one year, when Bruce Golding of the Jamaica Labour Party was elected into office.  He remains Prime Minister today.

Present Day Economics

In 1992, Patterson’s government inherited one of the largest per capita national debts in the world and started a comprehensive economic program to reduce inflation and unemployment. Jamaica now has a very strict fiscal policy and is open to trade and free markets. A floating exchange rate, which at times can be quite unstable, is maintained with the United States, and there are reduced restrictions on foreign investments.

In 1996, Jamaica went through an economic crisis that left the economy stagnant for four years. The GDP didn’t increase again until 2000 and only then by 0.8 percent, accelerating slightly to 1.7 percent of growth in 2001. But the global recession that followed the Sept. 11 attacks on the World Trade Center slowed the growth again to 0.8 percent in 2002.

The GDP of Jamaica is made up of three primary industries: Services make up 65 percent of GDP, manufacturing and mining make up 28 percent, and agriculture accounts for 7 percent. Interestingly enough, agriculture, which is very labor intensive, accounts for 21 percent of the workforce in spite of being the smallest major industry on the island.

Tourism and Services

One of every four employed workers in Jamaica works in tourism and services. In 2000, Jamaica hosted 1.3 million visitors, and tourism and services contributed $1.33 billion to the economy, which was up 4.2 percent from 1999. The September, 11 attacks and political rioting that followed, which accounted for 32 deaths, reduced tourism in 2001 and the following years. The majority of vacationers, 71.3 percent, are from the United States. The United Kingdom sends 10.2 percent, and 8.1 percent come from Canada.

Mining and Manufacturing

Mining accounts for 9 percent of the GDP and employs 6,000 people. Two thirds of the island is made of limestone, and Jamaica is the world’s third largest producer of bauxite, following Australia and Guinea. There are also mineable deposits of gypsum, marble, silica, sand, and clays. Bauxite production fell in 1999 by 7.5 percent and by 4.3 percent in 2000. Silica fell as well by 28.7 percent in 2000. However, gypsum and limestone have been on the rise; in 2000, limestone exports rose by 3.6 percent, and gypsum exports skyrocketed with a 40.1 percent increase.

From 1993 to 1997, manufacturing produced $2 billion in exports, mostly to the United States. The industry accounts for 13 percent of GDP, employs 9.4 percent of the work force, and is of increasing importance to the economy. The government has begun granting concessions to industrialization, such as with duty-free imports and tax relief to stimulate industrial growth. New plants are being built for everything from printed fabrics and footwear to agricultural machinery and fertilizer.

Other revenues generated in this area have come from the breaking up of the Government Telecom for $200 million, privatizing the power and public service companies and adding a levy to bauxite sales. Since the signing of NAFTA by President Clinton, the textile industry has shrunk due to competition with Mexico.


Although agricultural exports account for 7 percent of the GDP, the agriculture industry employs 21 percent of the Jamaican workforce. Sugarcane is still the chief crop. In 2001, 2.4 metric tons were exported. Bananas follow at a distant second with 42,000 tons exported in 2000, down 20 percent from the previous year. Jamaica is also the world’s largest supplier of pimento, also called allspice.

Blue Mountain Coffee, one of the world’s finest and most expensive coffees, is grown in the Blue Mountains of Jamaica. In 2000, 1,721 tons of Blue Mountain coffee was exported, up 18.2 percent from the previous year.  In 2009, Blue Mountain coffee exports brought Jamaica $32 million, up 25 percent from the previous year. Other agricultural products include arrowroot, cacao, citrus, corn, ginger, mango, potatoes, and tobacco. As with many other islands, in the Caribbean, rum, distilled from sugarcane, is also a significant export and is considered a byproduct of agricultural production.

Future Outlook

For a successful economic future, Jamaica must overcome many obstacles. The economy has had its ups and downs since 1995. Improvements in private capital are being made and industries are starting to diversify, which could make Jamaica more resilient against natural fluctuations in the global market in the future. Imports are up to about $4.6 billion a year, but exports overall have been down in recent years.  2009 saw exports down to about $1.422 billion.  That number is not expected to see much improvement immediately, as Jamaica's main export partner is the United States (accounting for 40 percent of exports), who is also experiencing an economic downturn.  

One of the most pressing obstacles for Jamaica in the coming years is to keep its status as a popular tourist destination. Political trouble has injured the tourist industry in the past, and may well do so again. Fortunately, an unnamable mystique of this beautiful island keeps visitors coming back year after year.


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