Jamaica is classified as a less developed country (LDC), as is true of countries throughout the Caribbean and elsewhere in Latin America. The nation faces many problems that hinder economic growth. It also has many advantages that, if properly developed, can boost development.


Gross domestic product (GDP) is one of several measures used to determine the wealth of a country and the health of its economy. GDP is defined as the market value of all property and all goods and services produced by labor within a country. Jamaica's GDP during the early years of the twenty-first century averaged approximately U.S. $7.5 to $8.0 billion.When converted to purchasing power parity (PPP)—that is, its equivalent to purchasing power in the United States—Jamaica's GDP was estimated at about U.S. $10.0 billion. GDP divided by the total population is a measure called per capita GDP. During recent years, this has fluctuated between the U.S. equivalent of about $3,400 and $3,900. These and other indices place Jamaica in the category of a developing country, one whose economy has not fully matured.

Jamaica's GDP composition by sector was 63 percent in services, 31 percent in industry, and 6 percent in agriculture. During recent years, the three largest contributors to the GDP were tourism (15 percent), bauxite/alumina (10 percent), and manufactured products such as clothing, processed sugar, rum, and other beverages (17 percent).


Jamaica has many economic concerns. Declines in the GDP, general lack of growth in most economic sectors and declines in others, and mounting debt are worrisome, as is the island's chronic problem of unemployment, which has been averaging about 15 percent. That figure would be more than doubled, however, if underemployment—people in low-paying jobs—was considered. At the end of September 2002, the public debt was U.S. $10.7 billion, or 130 percent of the GDP. Debt servicing accounted for 45 percent of the 2002–2003 budget. Most of this debt was acquired during years when the government borrowed huge amounts of money to develop the bauxite industry and expand tourism.

Imports and Foreign Exchange

Both GDP and foreign exchange inflows in Jamaica are sensitive to changes in the global economy. They are particularly vulnerable to whatever is happening to the U.S. economy. Less prosperous times in the United States translate to near-depression in Jamaica, with many people out of work. The country needs foreign exchange (non-Jamaican currency) to buy imported goods. Jamaican currency is the Jamaican dollar. Today it takes 50 Jamaican dollars to make 1 U.S. dollar. Like most island countries, Jamaica is dependent on trade to supply many of its basic needs. Imports of goods and services totaled an estimated $3.1 billion in 2001, which is a sizable percentage of the GDP. Of this amount, most was spent on machinery, transport equipment, fuels, manufactured goods, and food.

Foreign Ownership

The government controls some key industries, but there are many foreign-owned companies, especially those controlling exports (bauxite/alumina) and tourism, the most important foreign exchange earners.


Without a doubt, tourism is Jamaica's number one industry. It is the largest foreign exchange earner, a major contributor to the GDP, one of Jamaica's fastest-growing industries, and the country's second-largest employer. Tourism began in Jamaica in the 1890s. The American-owned United Fruit Company created this industry by using the extra space on its banana boats to encourage tourist cruises to Jamaica. In response to the increased need in facilities, tourist hotels were constructed on the island. Tourism, however, did not really begin to flourish until the mid–twentieth century, particularly after World War II. Port Antonio, located on the island's north coast, was Jamaica's first tourist resort and for many years a favorite retreat for writers and artists, including Ian Fleming, creator of James Bond. Additional hotel incentive legislation passed in 1968 continued to transform the industry and eventually strengthened the role of larger, often foreign-owned hotels and resorts.

Jamaica is the fifth most popular tourist destination in the Caribbean. The island has many attractions for tourists: scenic beauty; a warm, sunny climate; beautiful beaches; and a unique culture, as well as the warmth and friendliness of its people. Jamaica's location close to the United States and Canada make it easy and relatively inexpensive for visitors from these countries to visit Jamaica.

Types of Tourism

What is tourism? By definition it is an industry, usually called a service industry, that caters to the needs of visitors. Tourism is described as the world's largest and fastest-growing industry. Today, people travel for a variety of reasons: relaxation, adventure, nature, history, and culture. For many years, Jamaican tourism has centered on the hotel complexes of the northern and western coasts and the cruise ship ports of call at Montego Bay and Ocho Rios. New types of tourism are extending tourist activities to other parts of the country. Cultural-heritage tourism, sustainable tourism (ecotourism), and special event tourism are showing especially strong growth. What is really meant by cultural-heritage tourism, sustainable tourism, and special event tourism?

Cultural-Heritage Tourism

Some tourists travel to learn about the culture and history of places other than where they live. Jamaica has a colorful culture in which visitors may experience new foods, music, sports, dance, and drama. Until recently, few sites had been developed for the cultural-heritage tourist. Now, popular historical attractions include sites such as Port Royal and Spanish Town, the Taino Museum at White Marl (St. Catherine), and the great plantation houses that are scattered throughout the island. Jamaica-based companies offer tours of working plantations, small farms, and both urban and rural communities.

Sustainable Tourism/Ecotourism

Sustainable tourism, also called ecotourism, is a relatively new concept. Ecotourism promotes the use of land, water, plants, and other resources in their natural states. It provides a unique visitor experience with minimal negative impact on the environment and local communities. Blue and John Crow Mountains National Park, established in 1993, has a number of ecotourism projects, in which community involvement is a high priority.

Special Event Tourism

Often, tourists visit a place for a special event. Jamaica has music events such as Reggae Sunsplash, Reggae Sumfest, and Jamaica Carnival and sporting events such as golf tournaments, test cricket, and fishing tournaments.

Tourist Arrivals

There are two categories of tourists in Jamaica: cruise ship visitors and those staying in hotels, guesthouses, and apartments. Jamaica recorded 2,131,785 visitor arrivals in 2002. Stopover visitors numbered 1,266,366, and cruise ship passengers totaled 865,419.

Cruise Ship Visitors

Cruise ship visitors come by the hundreds to a port where they spend only a few hours or at most a day or two.When they spend more than one day, they sleep aboard the ship. Montego Bay and Ocho Rios have developed extensive portside facilities to support cruise ship arrivals. The approach to Ocho Rios is especially beautiful, with five waterfalls visible from five miles (eight kilometers) out at sea as well as a view of the town, surrounded by lush tropical woodlands. Restaurants, craft vendors, tour operators, and craft shops are all within walking distance of the port.Many tourists take the short taxi ride to nearby Dunns River Falls recreational park. At this well-known attraction, visitors can climb the falls, enjoy the park, or relax on the beach.

Stopover Tourists

Stopover tourists occupy the more than 24,000 rooms at hotels, resort cottages, and apartments for days or weeks at a time. The majority of these tourists come from the United States, and others from Canada, the United Kingdom and elsewhere in Europe and, to a lesser extent, Japan and Latin America. Negril, little more than a fishing village attractive to a handful of hippies, Rastafarians, and musicians in the 1960s, has become Jamaica's third-greatest tourist destination. It is reputed to generate more income than either of the other two major resort areas, Montego Bay and Ochos Rios. Centered on Negril, the resort area stretches along the seven-mile beach strip in Long and Bloody bays and also along the cliffs at West End. It spans two parishes: Westmoreland and Hanover. Hotels and tourist businesses line the coast, and more developments are planned. Negril's main tourist attractions are a beautiful seven-mile white sand beach, rocky cliffs, spectacular sunsets, and reef diving. There are also many fine restaurants, as well as upscale inclusive resorts, hotels, villas, and apartments.


Bauxite mining and refining is the second-leading industry in Jamaica. Bauxite was first discovered and exploited in the 1940s. The subsequent establishment of the bauxite/alumina industry shifted Jamaica's economy away from its heavy emphasis on agricultural products (sugar and bananas).

Jamaica is the fourth-largest producer of bauxite ore, after Australia,Guinea, and Brazil, and it ranks third in the production of alumina. What is bauxite? How is it different from alumina? What makes the small country of Jamaica such an important producer? Bauxite is the ore from which the metal aluminum is extracted. In Jamaica, Haiti, and the Dominican Republic, it is red, rust-colored clay. In addition to containing aluminum, it also has a high percentage of iron. This bauxite is found exclusively in pockets on top of limestone. In Jamaica, it is associated with the white limestone that forms much of the island's hard rock surface layer.

Bauxite, like all ores, contains a limited amount of the required metal. The process of removing the aluminum is generally known as refining, and it is done in two stages. The first stage is to remove all the unwanted materials, such as iron oxides, and to obtain aluminum oxide, which is known as alumina. The alumina is further refined to produce aluminum. About two-thirds of Jamaica's bauxite is converted into alumina in local refineries and then shipped to smelters in the United States, Canada, and Norway, where aluminum is produced.

Converting bauxite to alumina is an expensive process. It requires fuel and caustic soda, both of which are imported, plus the cost of building the refinery. Nevertheless, alumina is worth about ten times as much as bauxite and therefore is often considered worth the expense of producing it. The Jamaican government has encouraged the development of alumina smelters on the island, but the last stage in smelting requires large amounts of direct electrical current. A small country like Jamaica cannot afford to build and fuel the large electrical power stations required to convert alumina to aluminum, so this process is carried out at plants outside Jamaica owned by industrial giants such as Alcan of Canada, Alcoa and Kaiser of the United States, and Hydro Aluminum of Norway. There are several reasons for Jamaica's high ranking as a bauxite/alumina producer: First is the quantity of ore and its suitability for mining; second, the commitment of the government and investors to development of the industry; and third, the close proximity of Jamaica to the United States, its major trading partner.

What are the prospects for the future of the Jamaican bauxite/alumina industry? Mining plays an essential role in the country's foreign exchange earnings (contributing about 60 percent toward foreign exchange earnings). Today, Jamaica's bauxite refineries are working at full capacity. It is estimated that the country's bauxite reserves will last another 50 to 100 years, with some estimates as long as 150 years. One huge environmental problem associated with the bauxite industry is the disposal of tailings. This waste material forms a sludge of alkaline mud. Jamaica's alumina-producing capacity is about three million tons a year. About one ton of red mud waste is created in the production of each ton of alumina. Jamaica's land area is quite limited. It therefore is difficult to accommodate the disposal of so much waste material. Sludge disposal is not the only problem. The residue that leaves the plant also has large amounts of weak caustic soda solution. Unsightly red “lakes” are formed by the present disposal processes.


Jamaica has a long and strong tradition of agriculture. The island's varied natural landscapes, climate, and soil provide a wide range of environmental conditions suited to a variety of crops. Farms of different sizes are found on flat alluvial plains, in the high areas of the Blue Mountains, in the limestone uplands and solution basins, and in the numerous river valleys. Jamaican agriculture can be divided into three sectors: export crops, crops for local consumption, and livestock.

Export Crops

Agriculture for export has a long history. Like tourism, the bauxite/alumina industry and general manufacturing, it contributes substantially to the GDP, but more important, it is an earner of valued foreign exchange. Agriculture accounts for 7.4 percent of the country's GDP. Traditional agricultural exports are sugar, bananas, coffee, pimento (allspice), cocoa (chocolate), and fresh fruit. Large farms are called plantations or estates and often cover hundreds of acres (hectares) and grow a single crop. These estates are owned and operated by companies or families. They generally occupy alluvial (streamdeposited and therefore highly fertile) lands, although some extend into hilly areas. Coffee estates are the exception. The most highly prized coffee is grown at high elevations in the Blue Mountains. The main export crops today are sugar cane, bananas, coffee, cocoa (chocolate), citrus fruits, pimento (allspice), yams, and ornamentals (plants used for decoration).

Sugar Cane—Estate Agriculture

Sugar cane has been grown in Jamaica since 1509. In the sixteenth and seventeenth centuries, under the British plantation system, the island became the world's major producer and leading exporter of sugar and rum production reached 101,194 tons in 1805 but declined during the remainder of the century, finally reaching an all-time low of 4,969 tons in 1913. Factors in this drop included loss of labor with the abolition of slavery and growing competition from beet sugar. The all-time high of 514,825 tons was achieved in 1965. Production has declined steadily since then, to a 50-year record low of 152,161 tons in 2003.

Today, less land is planted with sugar cane, yields have dropped, and machinery in the sugar factories is aging. Jamaica does not produce enough sugar to meet its market demand and oddly enough is importing sugar for domestic consumption.

The government hopes to reverse this trend through modernization of the factories and improved field practices. It plans to invest U.S. $100 million in the ailing sugar industry and has set a production target of 300,000 tons for 2004. Some of the most efficient sugar operations are those supplying the rum industry. Appleton Estates, operated by J.Wray and Nephew, Ltd., is said to be among the most modern plantations in the Caribbean. The Appleton distillery dates to the seventeenth century and produces the world-famous Appleton rum.

A number of significant changes have taken place in the industry during nearly five centuries of sugar production. Production methods have gone from the use of cheap slave (African) and indentured (East Indian and Chinese) labor to less labor and more capital-intensive methods. Despite industry declines in employment, sugar remains the largest single employer of labor in the agricultural sector, involving 50,000 people. The production of sugar cane was once confined to large plantations. Today, the huge estates must compete with some 12,000 independent cane farmers, who produce just over 50 percent of the cane processed.

The Banana Trade

Most bananas grown in the Caribbean are used at home, but Jamaica has a history of exporting them. Commercial banana trade began in 1900 and reached its peak in 1936, with 355,000 tons, of which 259,000 tons, or 73 percent, were shipped to the United Kingdom. About 10,800 acres (4,360 hectares) of land are now under production, with a banana export amounting to 86,074 tons in 1996.

Besides competition, the major inhibitor of the Jamaican banana industry has been hurricanes, with 16 occurrences since 1900. After Hurricane Allen in 1980, exports fell to a record low of 11,000 tons in 1984. Since then, Jamaica has carefully restructured the industry, with a focus on efficiency and productivity. Banana production and related activities are a source of 5 to 10 percent of total employment in the country.

Captain Lorenzo Dow Baker is often credited with developing the banana trade, and at the same time, he introduced tourism to the island. He was the founder of the Boston Fruit Company, which later merged with the United Fruit Company (UFCO). His banana boats not only carried cargo but also passengers to Port Antonio and other coastal towns. A tourist activity—still popular today—was rafting down the Rio Grande, which used the rafts made for transporting bananas from the estates to the ships on the coast. The banana trade began at the time sugar cane production was in its greatest decline. Old cane fields made ideal banana plantations.

The trade flourished, particularly after the development of refrigerated service. The UFCO dominated the Jamaican trade until the late 1920s. The British government became worried about the increasing American influence on its Caribbean colony. It took action and began providing financial assistance to associations of banana growers who would supply the British market independently of the UFCO. This strategy was remarkably successful. Only World War II interrupted the steady flow of bananas to Great Britain.


Coffee is a traditional export crop. Introduced to Jamaica in 1728, the coffee plant adapted easily to the country's mountainous terrain. Coffee declined as a major crop with the abolition of slavery but was revived in the mid-1950s with the formation of the Jamaican Coffee Industry Board (CIB). The Board worked to raise the standards of coffee production and established the first central factory (pulpery). The physical conditions for growing coffee in the Blue Mountains, coupled with the labor-intensive methods of cultivation and processing, have produced what many would call the finest coffee in world. Jamaican Blue Mountain beans have the reputation of being the world's most expensive and highest grade of coffee—referred to as “the Rolls Royce of Coffee.” Ironically, it is almost impossible to drink this wonderful coffee in any Jamaican restaurant. Because of its value, in recent years, most of the small supply of Blue Mountain Coffee (80 percent) has been purchased prepaid by Japanese interests, with another 10 percent shipped to the United States.

Other Export Crops

Other export crops include cocoa, citrus, pimento, yams, and ornamentals or foliage. Pimento, although no longer a major crop in Jamaica, is one of its most unique. The pimento tree is native to the Caribbean. It was found growing in Jamaica by the early Spanish explorers, who were impressed by the taste and aroma of the berries and leaves. Most English-speaking people call the tree “pimento” and the berries “allspice.” The name allspice comes from the idea that the pimento berry contains the characteristic flavor and aroma of cloves, cinnamon, nutmeg, and pepper all combined in one spice. Jamaica's allspice commands a premium price, although demand has declined. At the beginning of the twentieth century, Europe alone was using four times more allspice than is being produced today.

Crops for Local Consumption

Half of the agricultural land in Jamaica is owned or controlled by about 1,000 large estates or farms, and the remainder is divided among 185,000 or so small farms. Most Jamaican farms are quite small, less than five acres (two hectares). These farms employ the majority of farm labor and produce a wide range of crops, including some for export but mainly for the local market. Types of crops include roots, vegetables, fruits, and legumes. Shoppers in North America and European supermarkets will be familiar with some of the produce, but much of it will appear strange and exotic. Root crops or tubers, an important staple crop, include sweet potatoes, cassava, dasheen (also called taro), and especially a wide variety of yams. Popular vegetables include callaloo (a leafy green), green peppers, hot scotch bonnet peppers, tomatoes, cucumbers, corn, and pumpkin squash. Seasonal fruits include plantains, avocados, mangoes, pineapples, soursop, Otaheite apples (also called ambarella), ackee, breadfruit, jackfruit, and melons just to name a few. Legumes are commonly grown and include red peas (beans), gungo peas (pigeon peas), and peanuts.

Small-scale farming in Jamaica began during the period of slavery. Slaves who worked on the large plantations were given small plots called provision grounds. Here they were expected to grow a portion of their food supply, such as yams, cassava, and sweet potatoes, many of the same crops that are grown today. What they did not eat they were allowed to sell. Once a week there was Sunday market, with hundreds of people gathering to buy, sell, or trade livestock, vegetables, yams, and other foodstuffs, along with fruits and preserves and homemade mats, baskets, and ropes in a carnival-like atmosphere.

Bustling, crowded, noisy markets are very much a part of Jamaican life. American-style supermarkets with no-hassle parking offer just about every American product available, including familiar American fruits and vegetables. Local markets, however, are where one finds the wide array of fruits and vegetables so famous in the Caribbean. The local Saturday market is an institution in Jamaica. Higglers, the so-called vendors and marketers, form the backbone of the Jamaican internal marketing system. The word “higgler” comes from the verb to higgle, which is to haggle or bargain. Higglers direct market domestic crops to the public town market. They may come from the community of production, neighboring communities (country higglers), or even distant metropolitan areas (city higglers).

Several vegetables and fruits marketed locally bear special mention because of their importance in Jamaica's food traditions. Breadfruit and ackee have especially interesting histories. Breadfruit Breadfruit was unknown in Jamaica before 1793. The first attempt to introduce the breadfruit was made during a period of extreme food shortage.West Indian planters heard of a tree growing in distant Pacific Islands that provided “bread” year round. British sea captain, William Bligh, was appointed commander of an expedition to collect the plant. His ship was the Bounty, a name that would become famous in the annals of history. After obtaining plants from the small islands of Timor and Tahiti, Bligh and his crew set sail for the West Indies. On the return, the crew mutinied. The breadfruit plants were thrown overboard and Bligh was set adrift in the Pacific in a small open boat. Fortunately, Bligh survived this misfortune and decided to try again. His next attempt was successful. In 1793, sailing on the HMS Providence, he brought the first breadfruit plants to Jamaica and St. Vincent.

The introduction of the breadfruit tree was a great success. Not only does the tree bear a great abundance of fruit, but it also usually produces two crops a year. Breadfruit is a staple food item in the Jamaican diet.


Ackee is the national fruit and an ingredient in the national dish, ackee and saltfish.While not native to Jamaica, ackee has remarkable historic associations. It was originally imported from West Africa, probably aboard a slave ship. In Jamaica, it thrives, producing large quantities of fruit each year. Ackee is edible, but only when fully ripe. Eating an ackee at the wrong stage of development can cause sickness, or even death.

Ackee was not recognized scientifically until Captain William Bligh (of “Mutiny on the Bounty” fame) took plants from Jamaica to England. In 1793, ackee was given the botanical name Blighia sapida in honor of the notorious sea captain. Today, even though the plant has been introduced into many other Caribbean islands, Jamaica is the only place where the fruit is generally recognized as an edible crop.


The Caribbean region is a major importer of food, meat and dairy products. Beef, in particular, is in especially short supply, which is why Jamaica plays such an important role in cattle raising. Jamaica has an active cattle-breeding program, which has crossbred larger, heavier English cattle with heatand disease-resistant Indian cattle. The greatest success has been with the Jamaica Hope, a dairy animal, which is about 80 percent Jersey with 5 percent Holstein and only 15 percent Indian zebu cattle. The main beef animal and the most common breed in Jamaica is the Jamaica Red, followed by the Jamaica Black, and Jamaica Brahman. The Jamaican cattle industry currently is able to produce about 80 percent of the beef and 14 percent of milk products consumed on the island.

Besides cattle, chickens, hogs, and goats are the main livestock animals reared on Jamaica. Chicken is Jamaica's most important source of animal protein. It is the cheapest meat, easy to cook, easily reared, and widely available. Fried chicken and jerk chicken are Jamaican favorites.Chicken is the meat source in which the island is most self-sufficient. Local supplies, however, are not enough. Chicken, especially chicken necks, backs, legs, and thighs, is imported. Pork is a popular meat, eaten as jerk pork, hot dogs, sausages, and ham. The parishes of Westmoreland and Hanover on west side of the island are the largest pork producers. Goats are raised for home consumption and the local market. Curried goat is a popular Jamaican dish, often featured at parties or large gatherings.


Fish is a popular item in Jamaican diet.Most fishing has been to satisfy local needs, but in recent years, Jamaica has exported seafood. Conch (a shellfish) and lobster are the main exports. Most fish come from the sea, not from freshwater fisheries. The main fishing area is on the shallow waters of the continental shelf surrounding the island. King, snapper, grouper, dolphin, shark, barracuda, marlin, parrot fish, goatfish (red mullet), and jackfish are all found in Jamaica's waters.


Jamaica's 500,000 hectares of forest play a critical role in the country's development. They provide lumber, posts, firewood, charcoal, fruits, medicinal plants, rope, drinks, and other consumables. They protect watersheds and therefore water supply, provide habitats for many wildlife species, and maintain soil productivity, and they are critical to Jamaica's scenic beauty. Managing forestlands is taken seriously. Commercial logging and other forest industries are tightly controlled. Hardwoods are in most demand, supporting subsidiary industries such as sawmills, treatment and planing plants, and furniture and craft workshops. Cutting wood for fuel and charcoal puts real pressure on forest resources: More than one-third of Jamaica's households rely on wood and charcoal for cooking and heating.


Jamaica's manufacturing industry produces a wide range of goods and is a large employer. This sector is also an important source of export earnings. There are several types of industries including extractive industries, which yield products such as gypsum and cement; assembly industries, which produce items such as refrigerators and television sets; food processing, such as canned ackee and callaloo, milk, jam, and ice cream; chemical industries, such as converting sugar into rum, and bauxite into alumina; and the garment industry, in which garments are sewn for export. The garment industry uses imported cloth, which is sewn by Jamaican workers. Most manufacturing plants are located in the KMA, where there is a large labor supply and a developed transportation network. Jamaica's economy is one of the most diversified in the Caribbean region. Growth in the manufacturing sector is especially encouraging. Much of Jamaican manufacturing is for local consumption, although Jamaican goods are shipped to neighboring Caribbean countries as well as to the United States, Canada, and Great Britain.