Edited by Jean L. Pyle and Robert Forrant
Chapter 2: Constructing Knowledge, Boosting Development and Escaping Debt: The Case of Jamaica
Robert Forrant I. INTRODUCTION Forty years since independence, Jamaica remains caught between its history as a colonized agrarian nation and its abortive eﬀorts to become an industrial society. In the ten years after breaking away from England in 1962 the country made impressive economic advances; annual growth averaged 7.5 percent from the 1950s to 1962, and between 5 percent and 6 percent thereafter until gross domestic product (GDP) and per capita income each peaked in the early 1970s. However, in 2000 Jamaica’s 2.6 million citizens lived in an unpromising economic environment, with high inﬂation and double-digit unemployment. The collapse of the country’s ﬁnancial sector was only narrowly averted in 1997 when ﬁve of the country’s nine commercial banks and ﬁve life insurance companies were bailed out by the Financial Sector Adjustment Company, a new government entity. But the rescue raised public sector debt to 144 percent of gross national product (GNP) by 2000. In the same year debt service payments of US$731.7 million – mainly to pay oﬀ International Monetary Fund (IMF) loans – consumed 41 percent of government revenues. By the IMF’s own account, the debt placed severe limitations on state spending to alleviate poverty (IMF, 2000a). In this chapter, I ﬁrst oﬀer a brief description of how Jamaica’s massive debt was incurred, followed by a discussion of the literature on learning regions, then by a description of the limitations of manufacturing in Jamaica based on my visits to numerous ﬁrms there. The concluding section of the...
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