Jamaican economy: Payback time now.

Jamaica is sitting on a debt bomb, literally speaking. And now it appears to be time for a payback.

The current global economic crisis has exposed several myths about the strengths and weaknesses of the economies and economic systems around the world. Among the hardest hit are the ones considered to be the toughest and infalliable. One has to only look at the state of the American Banking and Financial Services industry to understand the point.

The Jamaican economy is sustained mainly by tourist revenues and inward remittances. The services sector provides employment to nearly 65% of the workforce, contributing over 60% to the GDP. And industry, dominated by bauxite and alumina related activities contributes about 35% to the GDP, while providing employment to 20% of the workforce. Among the other industries are cement, paper, chemicals, etc.

The country exports bauxite, alumina, coffee, chemicals, apparel, sugar, etc. And imports fuels, raw materials, machinery, capital goods, foodstuffs, consumer goods, etc. By far U.S.A. is Jamica’s major trading partner, both for exports and imports.

The major problem faced by Jamaica now is the huge debt burden that is said to be about 130% of the GDP. Other problems include the slower growth on account of the general global slowdown that has hit Jamaica’s tourist industry. This in turn, has led to increasing unemployment and underemployment. This vicious circle has inevitably resulted in burgeoning crime that is actually posing a hurdle to the economic progress and development of the country.

The Jamaican authorities are considering various options to deal with the situation. But in view of the tight economic position in most parts of the world, Jamaica’s options for a bailout appear to be limited. One of the options is a bailout package from the World Bank and the IMF.

As a matter of fact, Jamaica is paying for its past excesses now.