Causes Of Economic Problems In Jamaica

Jamaica was ruled by the British government from 1655-1962 after being seized from Spain. While under British rule, the economy flourished by growing crops like tobacco, indigo, cocoa, and, most significantly, sugar. From 1673 to 1739, the number of sugar estates grew 7.54%, increasing from 57 to 430 estates. In order to meet the increasing labor demand, the British brought enslaved Africans into Jamaica. However, due to frequent slave rebellions and other humanitarian efforts, slavery was abolished in 1808, at which time Jamaica began facing economic difficulty. This difficulty can be attributed to factors such as new owners running the sugar plantations, a severe drought which ruined most of the crops, and the American Civil War limiting the island’s receipt of supplies. ("The History Of Jamaica")

After this hardship, Jamaica’s economy began to recover, which resulted in improved education, health, and social services, as well as the establishment of roads, bridges, and railways. In the 1930s Jamaica again began to experience economic difficulty. The causes included world-wide economic recession, falling sugar prices, and growing unemployment, and a rising population. However, this downfall inspired political advances such as labor unions,

Inflation increased from 19.91% in 1995 to 26.4% in 1996 before dramatically decreasing to 9.67% in 1997 and hitting a nearly twenty year low of 5.95% in 1999 (See Appendix B). Foreign direct investment inflows continually increased from 1996 to 1999 (See Appendix C). Alternatively, foreign direct investment outflows decreased from $45.3 million in 1996 to $9 million in 1997, but saw a steep increase of 389% to $35M in 1998 and 76% increase to $45.9M in 1999 (See Appendix D). (World