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This report was prepared for use within the Bank and its affiliated organizations.They do not accept responsibility for its accuracy or completeness. The report maynot be published nor may it be quoted as representing their views.

INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT

INTERNATIONAL DEVELOPMENT ASSOCIATION

CURRENT ECONOMIC POSITION

AND PROSPECTS

OF

JAMAICA

December 23, 1965

Western Hemisphere Department

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CURRENCY EQUIVALENTS

1 Jamaica Pound = 1 Pound Sterling

L 1 = US$2.80

L 1 million = US$2.80 million

US$1 = LO.357

US$1 million = L357,000

TABLE OF CONTENTS

Page No.

BASIC DATA ............ ................................... i - ii

SUMMARY AND CONCLUSIONS .................................. i - iv

I. INTRODUJCTION. 1

II. ECONOMIC GROWTH. 4

Agriculture. 6

Manufacturing .12

Mining .15

Tourism .16

III. PUBLIC FINANCES .17

IV. PUBLIC INVESTMENT .20

V. MONETARY AND BALANCE OF PAYMENTS DEVELOPMENTS 24

Monetary Developments. 24

Balance of Payments .26

Balance of Payments Prospects. 28

VI. ECONOMIC PROSPECTS AND CREDITWORTHINESS .29

Economic Prospects .29

Creditworthiness .31

APPENDIX 1: STATISTICAL TABLES

APPENDIX 2: TRENTDS AND PROSPECTS IN AGRICULTURE

APPENDIX 3: EXPORT PROJECTIONS 1965 - 1970

APPENDIX 4: BALANCE OF PAYMENTS PROJECTIONS 1965-1970

I. BASIC DATA

Area: 4.,400 square miles

Population (end 1964) 1,762,000Rate of natural growth (1954-1964) 3%Rate of emigration (195L-1964) 1%Rate of papulation growth (1954-1964) 2%Population density (per square mile) 400Population density per square mile of

cultivable area 700

Gross National Product (1964) JTa 280.7 millionRate of growtl 1/ 1954-1961 8%

1962-1963 2.2%1964 708%

Per capita GNP (1964) US $445

Gross Domestic Product at Factor Costs (1964) JI 274>7 millionof which:

Agriculture 12.9%Manr'facturing 14-3%Mining 9X3%Distributive Trades 1,59%

Percent of GDP at current market prices 1964 1962-1963 1956-1961

Gross investment 19,8 18,6 23'lGross savings J5.7 l5L4 l601Balance of payments current account

deficit 4,1 3c2 7.0Investment income payments 4h9 4,8 3.8Government current revenues 16.8 153 13.7

Resource gap as % of investment 2l00 16,5 29.5

M4oney and Credit Annual rate of changa(%)'

1964 1964 1962-1963 l953-61(JT, mil-

lion)

Total money supply 79Q6 115 18.5 8.0Time and savings deposits 46r3 12,1 18c5 12.0Commercial bank credit to

private sector 52,2 36.2 -6.0 i5aoOther lending to private sector n.aa noa n naa. oRate of change in prices 2/ 2,3 lc6 3 3/

1/ Gross Domestic Product at constant factor costsO*7! Kingston area

1555S-'1961

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Public Sector OperationsAnnual Rate of Change

1965 1960 - 1965 (W)(JTemillion)

Government current receipts 49.2 9e5Government current expenditures 42e6 105Surplus 6.6 4h3Government capital expenditures 14.7 6.5Total external assistance to

public sector 0 4 nna.

External Public Debt (in US$) June 30, 1965 June 30, 1962

Total debt 86z7 million 4803 mi.llionTotal annual debt service 7.2 million 5/ 5.0 millionDebt Service ratio 2.1% 6/ 17%

Balance of Payments (in US$) Annual Rate of change

1964 1964 1962-1963 1953-1.961(million)

Total exports 223.2 7.1 8,5 12,~oTotal imports 282.2 24.7 3.6 10o0Net invisibles 8.1 - -4,7 3,5Net current account balance -33.9 as 7/ .. 8/ 24

1964 1961 1953-1960

Commodity concentration of exports 9/ 45% 50% 40%Gross foreign exchange reserves 116.8 mil. 9103 mil. 77.5 mll

or: months of imports 5 5 5.5

External financial assistance (in US$ million)

1964 Annual average 1962-63Cciimitrnenibs Disbursenents Commitments Disbursements

TOTAL 2.9 1.1 6.2 20°

Soft assistance 2.4 1.1 4,4 LI.Hard assistance 0.5 - 1.8 l,3

Major donor:

United States 1.8 - 33 -

United Kingdom 1.1 1.1 2.9 2c9

4/ Budget year ending March 31 7/ 1963: 9 million

5/ 1965 8/ 1961: -10.4 million

6/ As a percentage of 196L, exchange earnings 9/ bauxite and a'lumina

SUMAARY AND CONCLUSIONS

i. Jamaica, since 1962 an independent country within the BritishCommonwealth of Nations, achieved a remarkably high rate of econc*micgrowth during the decade 1954-1964. Real GDP advanced by an averageannual 6.8 percent, raising per capita GIP from US$250 in 1954 to US$445in 1964. During the years 1954 through 1959 the basic impetus to eco-nomic growth was provided by large foreign investments in bauxite mining,alumina production and hotel construction. While gross investment de-

clined in this period from the record L52.1 million in 1957, largely be-cause of falling investments in the bauxite-alumina industry, it remainedclose to 20 percent of GDP following increased local investments in othersectors, and allowed Jamaica to continue its growth without interruption,though at reduced rates for the years 1961 through 1963. In 1964 real GDPincreased by 7.8 percent. With the rising standard of living and themaintenance of relative monetary and price stability, dcmestic savingsrose rapidly and have financed the greater part of the country's grosscapital formation.

ii. In the past decade, the Jamaican economy - once substantiallydependent upon tropical agriculture - experienced a major transformation,principally caused by the discovery of bauxite, the rapid rise in thelevel of industrial activity, the development of Jamaica into a majorvacation resort and the upsurge in the building industry. The increasedactivity in these sectors stimulated all the main sectors except agricul-ture. Mainly because of serious structural problems, agriculture'scontribution to the GDP fell rapidly from 20.1 percent in 1954 to 12.9percent in 1965, and imports of agricultural products rose markedly,causing serious balance of payments' pressures. The lagging agricul-tural sector constitutes the basic developmental problem in Jamaica.The divergence of rural and urban income levels has led to a large exodusof the rural population, in part to the cities, and to the high rate ofunemployment in Jamaica.

iii. The strengthi of the Jamaican economy lies in the dynamicattitude of the private sector and in the sound and imaginative ap-proach of the still young Jamaican Government towards economic devel-opment. Jamaica is fortunate to have a strong and development-consciouslocal and foreign private sector that actively supports the government'sdevelopmental efforts. These efforts consist primarily of creating astimulating environment f'or the development of private sector activity,developing the rural agricultural economy to raise farmers' incomesthereby reducing migration to overcrowded towns, providing adequateinfrastructure facilities and furthering social progress through anexpansion of the education system and other measures that include thesupport of a birth control program.

iv. The development strategy of the Jamaican Government is reflectedin the Five-Year Independence Plan 1963-1968, which was prepared in 1962upon reaching Independence. The targets included a 5.6 percent annualrate of economic growth, the execution of a public investment program at

a substantially higher level than in the fifties, and an expansion ofeducational and other social services. The investment program was mainly,and rightly, directed towards the development of the rural agriculturaleconomy. To a large extent the government has succeeded in its aims thusfar.

V. Following Independence, public investments increased from L10.8million in 1963 to L14.7i million in the fiscal year 1965, or to about5 percent of GDP. The Jamaican Government has consistently planned itsfinances so as to cover a substar,tial portion of these investment expendi-tures by public savings. Revenues rose by about one-third in the 1962-1965post-Independence period, increasing from 14.7 percent of GDP in 1962 to16.8 percent of GDP during the fiscal year ending March 31, i965. Publicsavings rose slightly to 2.3 percent of GDP in 1965 and covered 38 percentof 1965 public investment expenditures. Despite increasing reliance onexternal general purpose financing of public investments in this period,on the average less than one-third of total public investment expenditureswas financed by external borrowing and foreign grant assistance. The re-mainder was financed through public savings and noninflationary internalborrowing.

vi. The Jamaican Government recently revised the public investmentportion of the 1963-1968 Plan: expenditures are now to rise from theL16.7 million level budgeted for the fiscal year 1966 to L21.5 millionin 1967 and L20.7 million in 1968. While this program reflects the priorityneeds of the economy, its financing is not yet fully assured. Public savingswould cover about 20 percent of these rapidly rising expenditures, non-inflationary internal borrowing about 35 percent - the government's use ofprivate savings has been carefully planned to be consistent with the privatesectcr's own vigorous expansion plans - and drawings on existing externalloan commitments another 10 percent. A financing gap of about T6-7 millionin the 1967-1968 period would still remain to be filled.

vii. In earlier years, the government would have covered the mainpart of its external finance requirements in the private capital marketsof London, and to a lesser extent in those of New York and Toronto. How-ever, balance of payments conditions in the United Kingdom now seriouslylimit the extent by which the Jamaican Government can continue to borrowabroad in order to finance its development expenditures, excellent credit-worthiness notwithstanding. In addition, access to the United States markethas been inhibited by developments in the Dominican Republic during 1965.The government has recently begun to reorient its proœect planning effortsso as to permit increased access to official external lending agencies. How-ever, consideration of timing alone suggests that only a small part of theprospective financing gap can be expected to be covered by conventional of-ficial project financing from abroad. The Jamaican Government still hopes tocomplete its financing plan primarily by new borrowings in the London, NewYork and Toronto capital markets during fiscal 1967 and 1968 (i.e. between

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April 1, 1966 and March 31, 1968), and may well succeed in view of itssound financial management and economic development effort. However, theneed for either retrenchment in the investment program or a substantialfurther increase in the presently contemp'ated domestic financing effortcannot be ruled out at this time.

viii. The Jamaican monetary authorities have traditionally beenconcerned to maintain relative monetary and price stability and havebeen successful so far in their endeavours. A measure of this successis the willingness of the Jamaican pub,Lic to hold their savings in theform of c:Laims on the banks. Savings deposits with these banks doubledfrom L16.2 million in December 1959 to L32.3 million in March 1965. Thisincrease is equivalent to the impressive annual rate of 14 percent.

ix. Jamaica's commercial banks operate as sterling area banks, whichmeans that they have easy access to the working balances held by their headoffices in London. As the new Bank of Jamaica has not undertaken dis-count operations so far, the commercial banks have customarily financedpart of the credit expansion in Jamaica through drawings on London. Thebalance of payments impact of this credit expansion has been self financ-ing and the price impact negligible. In the 1955-1964 period domesticcredit rose by 16 percent annually but prices increased by only ° percentannually, in line with the increase in import prices.

x. Balance of panyments developments in the past decade reflect thefact that the strong expansion of the Jamaican economy was largely stimu-lated by foreign private investment in the export sector ar.d financed bythe inflow of both private and official foreign capital. Thus, whilemerchandise exports and imports increased more than threefold in the1953-1964 period and the economy experienced a persistent current accountdeficit in that period, the country's foreign exchange reserves nearlydoubled, and amounted to a healthy L41.7 million in 1964, or about 5 monthsof imports. The econcmy has become increasingly open in the process. Ex-ports of goods and services amounted to 42 percent of GDP in 1964 as comparedto 35 percent in 1959.

xi. The main determinant of Jamaica's rapidly rising exports wast;he discovery of bauxite, mining of which started in 1952. Exportsof bauxite and alumina rose from L2.8 million in 1952 to L33 millionin 1964, or roughly 45 percent of total merchandise exports. At thesame time, however, exports of other products, such as sugar, bananasand other agricultural products, nearly doubled. In addition, from 1959onwards, Jamaica became an exporter of manufactured products, mainly ofclothing, but also of such other products as cement and industrial mach-inery, and the island's impressive tourist potential was further developedso that tourist earnings increased by over 50 percent in the years 1959-1964.The net results of these developments is that Jamaica is now less dependentuipon exports of agricultural products: the proportion declined from 69percent of total exports in 1953 to 40 percent in 1964.

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xii. In the 1953-1964 period merchandise imports increased nearlythreefold. The composition did not change appreciably. While the rapidlyrising level of imports of capital goods and raw materials was caused byJamaica's high and rising level of investment and GDP, the threefoldincrease in food imports reflected the inability of the agriculturalsector to expand in line with the rapid increase in demand for agricul-tural products. Steps have been taken, especial-ly since Independence,to substitute imported agricultural products for local production andthere are now signs that positive results are being achieved.

xiii. The high quality of Jamaica's financial management and thepresent balance of payments outlook suggest that Jamaica should notencounter unmanageable balance of payments problems in the next fiveyears or so. With this prospect, the Jamaican Government has createda very favorable environment for the development of private sectoractivity in every main sector, and the strong private sector responseso far - the private sector is engaged at present in carrying out andplanning Et substantial further expansion in its activities - Jamaica'sgrowth prospects look good. An examination of the rapidly rising levelof total investment exnenditures suggests that Jamaica's GDP shiould in-crease during the next five years at the minimum by an annual 5 percent.With the labor force increasing by bet-een 2 and 3 percent a year, unem-ployment should be gradually reduced.

xiv. On June 30, 1965 Jamaica's external public debt repayable inforeign currency totalled US$66.7 million, of which US$13.1 million wasundisbursed. Annual service charges on this debt, which amount to US$7.2million in 1965, and rise to US$8.5 million by 1970, drop from 2.5 percentof the country's earnings on current external account in 1965 to 2.3 per-cent in 1970. (Debt service charges as a percentage only of Jamaica'smerchandise exports accouint for about 3 percent throughout the entireperiod). Even if the Jamaican Government were to cover the entire publicinvestment financing gap indicated earlier by external borrowing, servicecharges for the 1966-1970 period still would not exceed 5 percent of theprojected earnings on current account.

xv. Jamaica's favorable growth prospects, the government's prudentfinancial management, sound and imaginative developnent policies and solidinternal financing effort lead to the conclusion that Jamaica has a verysubstantial margin for incurring additional foreign debt at conventionalterms.

I. INTRODUCTION

1. Jamaica, since 1962 an independent country within the Brit-ish Commonwealth of Nations, is the third largest island in the Carib-bean. About 146 miles long and 52 mi'Les across at its widest part, ithas an area of some 4,400 square miles on which it supports a rapidlygrowing population of 1.8 million in 1964 at a per capita income levelof about US$450. Although it is located 90 miles to the south of Cubaand 100 miles to the west of Haiti, Jamaica has little contact with otherCaribbean countries - except for the other British West Indies Islands -and its internal politics have not been affected by political instabilityin the area. Currently, Jamaica is not a member of the Organizationof American States. It maintains close friendly relations with the UnitedKingdom, which fostered the Island's transition from Colonial statusthrough stages of self-government to full independence in 1962, and withthe United States and Canada; the latter two countries have beccme Ja-maica's main trading partners since 1962.

2. Jamaica's transition from a colony to an independent nationhas not entailed a basic change in its form of Government, which is inmany respects analogous to that of the United Kingdom. In addition,in view of the extent of self-government which the island enjoyed asa colony, independence brought new functions and responsibilities toits government in only two major areas: foreign affairs and nationaldefense. The British military garrison has been replaced by the jamaicaRegiment and no further military forces are presently planned. While inthe past the majority of senior posts in the Civil Service - which hasa long tradition of non-political service in administering the affairsof the country and executing the policies of the Cabinet - were filledby expatriates, there are presently% few senior posts not being filledby highly-qualified Jamaicans.

3. Since 1944, a strong two-party system has been developed. Bothparties, the Jamaica Labour Party (which won the 1962 elections, ledby Sir Alexander Bustamante) and the People's National Party, draw theirstrength from labor, both command widespread popular support and togetherthey received 99 percent of the total popular vote in 1962. Betweenthe two parties there are no significant differences in matters of for-eign affairs and domestic economic and social policy. The present Govern-ment, which could remain in power till the spring 1967 elections, iswell aware of economic development necessities. It is actively engagedin promoting economic growth and fur-thering social progress through itsstepped-up public investment program - which is executed against thebackground of targets outlined in the Five-Year Independence Plan 1963-1968 - and through stimulating the efforts of the dynamic and socially-conscious private sector. Although there are no easy answers to Jamaica'spressing and complex developmental problems, their solution is beingtried in a rational environment.

4. Although the contribution of agriculture to the grcss domes-tic product is small (13%), Jamaica still is primarily an agriculturalcountry: two thirds of the population live in rural areas and about40 percent of the labor force is engaged in agriculture. Population

density is very high - about 400 per square mile. Largely due to theunfavorable nature of the terrain - 80 percent of Jamaica's surface areais mountainous - over 40 percent of the island area is unsuitable foragriculture. The cultivable area is therefore re'atively small. Partof this (55 percent) is located mainly in the rich Coastal Plains wherethe majority of the country's sugar and banana estates are. However,one of the most difficult problems in the development of agricultureon the rest of the cultivable area is posed by the large number of un-skilled farmers wh-io cultivate small plots or steeply sloping lands. This,together with a frequent occurrence of hurricanes, floods and droughts,has made small agriculture unattractive to the rapidly rising popula-tion and has led in the past decade to massive migration to the largercities and abroad. In the 1950's, about 10 percent of Jamaica's popula-tion emigrated, mainly to the United Kingdom. Migration to the cities -the Kingston Metropolitan Area now accounts for over one-quarter of thetotal population - has resulted in serious economic and social problems.Inadequacies in the levels of education and skill limited the employ-ment possibilities of these migrants. The net result has been urbanunemployment at a considerably higher level than the national averageand poor housing conditions in urban areas. This situation is a matterof serious concern to the Jamaican Government and the private businesscommunity alike.

5. In addition to its rich Coastal Plains, the country is endowedwith two other major natural resources: its bauxite deposits and itsbeaches. Since 1958, despite the development of bauxite deposits else-where, Jamaica has become the world's largest producer and exporter ofbauxite. Three internationally-based aluminum companies are activelyengaged in mining its 600 million tons of economically mineable baux-ite deposits and a fourth produces alumina for exports at two plantson the island. Jamaica's most promising resource is its attraction asa vacation resort area. Its beaches, sea and sky have earned it theappropriately descriptive name of "Island in the Sun". Thousands ofvacationers visit the island and their expenditures add materially tothe economy as well as to the balance of payments.

Structure and Characteristics of the Economy

6. Prior to the commencement of bauxite mining in 1952 the Jamai-can economy was primarily based upon the production and export of sugarand bananas. Since that date, under the stimulus of the remarkable growithof the bauxite industry, the economy has become increasingly industrial-ized and diversified and has also benefited frcm the development of asignificant tourist industry. In 1964, agriculture contributed only13 nercent to Gross Domestic Production, manufacturing 14 percent andmining 9 percent. Although per capita GNP is fairly high (u.S.$445),it is unevenly distributed among the Island's population. It is substan-tially lower in rural areas where a large segment of the population con-tinues living at a subsistence level. In addition, as noted above, unem-ployment is high - it may amount to 15-20 percent of the labor force,

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although unemployment for men is substantially lower - and there is asizeable amount of underemployment in agriculture. However, while thereis no government relief program for the unemployed, the sense of familyobligation is real and assistance is vollntarily undertaken by relatives.

7. Jamaica's pattern of economic development has produced scmeby-effects characteristic of a dual economy. High productivity and highwages prevail in plantation agriculture (in particular sugar), and evenmore important in the past few years in bauxite mining, while produc-tivity in domestic agriculture and other sectors has not risen very rapidlyand wages are much lower there. Increasingly, howzever, the higher wageshave come to be considered by the powerful labor unions and the smallfarmers alike as standards to be achieved throughout the country. Thenet result has been a substantial rise in production costs, work stop-pages from time to time, and in some parts voluntary unenployment, inrural areas, unemployment frequently exists side by side with a short-age of agricultural laborers. The rising level of labor costs has tosome extent led to the adoption of production techniques which are lesslabor-intensive than otherwise might have been the case and has, there-fore, been partly responsible for the continuing high level of unemploy-ment. The Jamaican Government is well aware of this problem and of itsimplications for the country's economic growth. It is trying to achievea solution through promoting a better understanding on the part of thelabor unions of the relationships between wages, production costs andunemployment. In addition, it is executing agricultural policies whichaim at increasing farmers' incomes largely through investment subsidies(intended to reduce agricultural production costs) and other measuresto raise agricultural production.

8. Jamaica is heavily subject to the influence of overseas condi-tions, particularly in the United Kingdom, Canada and the USA, whichare its main trading partners, and the main sources of foreign financeand tourism. Furthermore, the United Kingdom and Canada are the mainareas to which Jamaicans traditionally emigrate. The Jamaican economyis relatively open: exports of goods and services accounted in 1964for about 40 percent of gross domestic production. Although part ofthe country's exports, mainly sugar and bananas, is being sold underpreferential quotas and prices, in particular in the United Kingdom,the general trend in world production and world market prices does influ-ence Jamaica's export position. In addition, Jamaica has little influ-ence over the development of its main export products, bauxite and alu-mina, as the aluminum companies engaged in the country determine theirproduction and export decisions on the basis of their worldwide opera-tions. As a member of the Sterling Area and with a link between theJamaica pound and sterling under the modified sterling exchange stand-ard, monetary conditions in the United Kingdom have their impact on theJamaican economy. Jamaica's commercial banks operate as sterling areabanks, which means that they have easy access to the working balanceswhich their head offices keep in London. Consequently, under conditionsof rising credit demand in Jamaica, these banks are not limited by thegrowth in Jamaican deposit liabilities in expanding their loan portfolios.

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At the sene time, reverse flows may occur, such as happened in 1963,when the conmmercial banking syst.em invested part of its deposits in London,thus depriving the Jamaican economy of valuable savings. Jamaica's member-ship of the Sterling Bloc, therefore, imposes certain limits on the scopeof Jamaican monetary policies. In addition, balance of payments condi-tions in the United Kingdom and political conditions in the Caribbean deter-m.ne the e;tent by which the Jamaican Government - which in the pasthas covered the main part of its external finance requirements throughbond issues in the private capital marksets of London, New York and To-ronto - can continue to borrow abroad in order to finance its developmentalexpenditures. Also, political conditions in the Caribbean area have someimpact on the growth of the tourist industry. Furthermore, the coun-try has recently encountered increasing hindrances to emigration in theIJnited Kingdom and to employment of seasonal workers in the USA, whichfurther complicates the solution of its most pressing problem, uremploy-ment.

9. The strength of the Jamaican economy lies in the dynamic atti-tude of the private sector and in the rational approach of the stillyoung Jamaican Government towards economic development. Jamaica is fortu-nate to have a traditionally strong and development-conscious local andforeign private sector, which even owns such facilities as ports, powerand telecommunications and is now engaged in expanding these servicessubstantially, and which actively supports the government's developmentalefforts. These efforts consist primarily of creating a stimulating environ-ment for the development of private sector activity, developing the ruralagricultural economy to raise farmer's incomes thereby reducing migra-tion to overcrowded towns, providing adequate infrastructure facilitiesfad furthering social progress through an expansion of the educationsystem and other measures which include the support of a birth controlprogram. It was the interaction of these policies and private sectordynamism which largely contributed towards the resumption in 1964 ofthe high growth rate which the country experienced in the fifties andwhich had fallen off in the early 1960's.

II. ECOITOMIC GROWTH

10. During the decade 1954-64, Jamaica achieved a remarkably highrate of economic growth. In this period real GDP advanced by an annual6.8 percent, nearly doubling from L130.4 million to =252.4 million. Asmassive emigration, main'y towards the United Kingdom, reduced the in-crease of the Jamaican population from the natural rate of 3 percentper annum to 2 percent, per capita GNP rose rapidly from US$250 in 1954to US$445 in 1964. While gross investment declined in this period fromthe record "52.1 million :Level in 1957, largely because of falling invest-ment expenditures in the bauxite-alumina industry, it remained closeto 20 percent of GDP, and was mainly private. With the rise in the stand-ard of living, and the maintenance of relative monetary and price stabi-lity, there has been a substantial rise in domestic savings which, mainlyfrom 1957 onwards, have financed the greater part of the country's grosscapital formation (cf. Table 13). Gross domestic savings - althoughrapidly changing from year to year - increased from L24.7 million in

1956 to -45.8 million in 1964, and amounted to 15.7 percent of GDP in1964 as compared to 14.1 percent in 1956. This resource gap, which amountedto over 40 percent of gross domestic capital formation in 1956, droppedto 21 percent in 1964.

II. In the past decade, the Jamaican economy, once substantiallydependent upon tropical agriculture, experienced a major transformation,principally caused by the discover^y of bauxite, the rapid rise in thelevel of industrial activity, the development of Jamaica into a majorvacation resort and the upsurge in the building industry. The increasedactivity in these sectors stimulated all the main sectors except agri-culture. The growth of agriculture lagged considerably behind the over-all growth of the econcmy, mainly because of its serious structural pro-blems (see Chapter on Agriculture). As a result, agriculture's contri-bution to Gross Domestic Production fell rapidly from 20.1 percent in1954 to 12.9 percent in 1964, and imports of agricultural products rosemarkedly, causing serious balance of payments' problems. Indeed, thelagging agricultural sector constitutes the besic developmental problemin Jamaica. The resulting divergence of rural and urban income levelshas led to a large exodus of the rural population, in part to the citieswhere many of them remain unemployed. It is, therefore, largely respon-sible for the relatively high rate of unemployment in Jamaica, whichhas not been substantially reduced through emigration or the rise innon-agricultural production in the past decade.

12. During the years 1954 through 1959 the basic impetus to thegrowth of the Jamaican economy was provided by large foreign investmentsin bauxite mining, alumina production and hotel construction. Subse-quently, although the rate of investment in the bauxite industry tape:^edoff, increased investmentg in other sectors, particularly in manufactur-ing and housing, have allowed Jamaica to continue its growth writhoutinterruption, but at reduced rates for the years 1961 through 1963. Atthe same time exports of goods and services tripled from 137 millionin 1954 to T121.5 million in 1964 and have become increasingly diver-sified: in 1953 exnorts of agricultural products constituted 69 per-cent of total exports as compared to 40 percent in 1964. Jamaica isnow the world's largest exporter of bauxite and alumina (35 percent oftotal world exports of bauxite), and has become an exporter of manufactures,mainly clothing but also industrial machinery.

13. In 1962, upon reaching independence, the jamaican Governmentprepared a Five-Year Independence Plan 1963-1968, mainly motivated byits desire to raise the level of economic growth which had fallen stead-ily since 1959, largely because of the reduced rate of increase in for-eign investment, and to reduce unemployment. The targets included a5.6 percent annual rate of economic growth, the execution of a publicinvestment program at a substantially higher level than in the fifties,and an expansion of educational and other social services. The invest-ment program was mainly, and rightly, directed towards the development

of the rural agricultural economy in a determined effort to reduce migra-tion to the cities. In addition, as outlined in the section on manu-facturing, the Jamaican Government undertook appropriate policies tofurther improve the already healtly climate for private investment. Toa large extent the Jamaican Governnent succeeded in its aims. Althoughthe country experienced only a 2.5 percent rate of growth in 1963, as in1961-62, this was primarily due to the temporary reduction in invest-ment caused by uncertainties incident to Jamaica's transition to inde-pendence (including the country's withdrawal from the Federation of theWest Indies) and unsettled political conditions in the Caribbean area.In the latter half of 1963, investment rapidly recovered and the over-all growth rate accelerated to a 7.8 percent increase of real GDP in1964. Even the traditionally lagging small farm domestic agriculturalsector grew by 11 percent in 1964 (see Table 11); however, unemploymenthas probably not been reduced because of the sharp drop in emigration.

Agriculture

14. In the 1954-1964 decade agricultural production seriously lag-ged behind the overall growth of the economy. In fact, it only roseby 1.1 percent per annum in this period, or by half the level of popu-lation increase. The result has been a growing marked divergence ofrural and urban income levels, which in turn has led to a large exodusof the rural population, to already overcrowded cities and abroad. Inthis period the number of agricultural laborers declined by nearly 40percent. Despite massive emigration unemployment has remained high andi5 particularly acute in the cities where inadequacies in the levelsof skill and education limit the employment possibilities of these mi-grants. During this period, food prices rose mar'edly and imports ofagricultural products - a large part of which could have been producedlocally - increased rapidly, causing serious balance of payments pres-sures.

15. There are marifold reasons that explain the poor performanceof the agricultural sector. Firstly, natural conditions in the inter-ior of the country do not favor the development of agriculture. A largepart of the island is unsuitable for agriculture. The cultivable areais therefore relatively small (1.7 million acres) and densely populated(about 700 per square mile). About 45 percent of this area is occupiedby a large number of unskilled farmers who cultivate small plots on steeplysloping lands. Unsatisfactory growing practices and frequent floodshave created soil erosion problems which further limit agricultural produc-tivity and incomes. The problem of the small farmers is further aggra-vated by deficient marketing arrangements for crops mainly destined fordomestic consumption. In addition, the small farmers' imperfect titleto land has contributed to the inadequate use of agricultural credit.It is this smallholder agricultural sector which accounts primarily forthe poor performance of Jamaican agriculture and which poses the mostdifficult development problem.

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16. The remaining, and probably the best, 950,000 acres of thecultivable area are located mainly in the rich Coastal Plains where themajority of the country's sugar and banana estates are. These estatesare characterized by relatively advanced agricultural practices and pro-duce Jamaica's two principal export ci-ops. A surprisingly large partof this area is idle or grossly underutilized, and coinld provide thebasis for a considerable expansion of agricultural output in the yearsahead. But the pace at which Jamaica can realize this still existingpotential for bringing new lands into cultivation is subject to restraints.Intensified efforts in land reform and land settlement to bring theseidle and underutilized lands into full production i'll require largepublic expenditures for the acquisition, improvement and settlement ofthese lands and enlarged and improved facilities for farm credit andextension services to se-ttlers.

17. Since independence, the jamaican Government has bseen inten-sifying eff'orts to overcome the above-mentioned oostacles to increas-ing agricultural production and incomes on small farms by providing far-mers with technical assistance in various ways. The Government's Far-mers Production Program provides financial support and technical assist-ance to farmers who wish to improve water supply, irrigation and otherfarming facilities. It also provides improved services in agriculturaleducation, extension, research and credit. In 1964, roughly 142,000 acreswere under the irrigation program, a 50 percent increase over the 1953level. Small farmers are being resettled on viable economic units throughstepped-up execution of the Land Reform. Program. In the past ten years,the average farm size increased from 9.4 acres to 10.7 acres throughthe consolidation of small holdings under this program. In addition,the government provides marketing services on a large scale. All theseefforts have contributed substantially tow,ards a reversal in 1963 ofthe steady dowmward trend in production which the small agriculturalsector - mainly producing for the domestic market - traditionally exper-ienced and which was pronounced in the 1959-1952 period. In 1964, thissector advanced by a healthy 11 percent. In order to sustain this growthrate, the Jamaican Govern-ment is now planning to further expand its al-ready substantial support of the agricultural sector.

18. Jamaica has a long history of land reform and land settlement.Under the Government's Land Settlement Progrannne, over 26,000 farmershave been settled on roughly 140,000 acres since 1938. The primary objec-tive of this program was to give greater security of tenure to tenantson agricultural properties. To achieve this, the government acquired,with cash and/or land bonds, heavily-tenanted properties where the ten-ants were either in dange-r of eviction or subjected to unsatisfactoryconditions of tenure. After sub-division, construction of roads, provi-sion of water supplies, etc., the properties were sold in small units(2-5 acres) to settlers, to be paid for over a twenty-five year period.In 1963, the Government reviewed this program in the light of the ur-gent necessity to bring unused lands into production and to achieve arapid increase in agricultural output and decided to launch a Land

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Reform Program. Its objectives include the settlement of farmers onsmall viable units basically aimed at intensifying agricultural produc-tion and increasing incomes, thereby encouraging the rural populationto remain on the land. The experience acquired in the Christiana areaLand Authority is useful in this connection. There, farmers have beensettled on plots of roughly five acres and are netting T400 _ T500 annu-ally. They produce a selected range of export crops and local rootcropsand vegetables, and also have a few livestock and minor cultivation tosupply subsistence for the family and two acres of tree crops to pro-vide steady long-term income with low labor requirements. The exper-ience suggests that the program's further development deserves high prior-ity. The Reform Program also contemplates the creation of larger farmunits on presently unutilized land, which should have a larger and moreimmediate impact on agricultural production. Initially, the programcalls for the annual establishment of 60 dairy farms of 25 acres. Thetotal program envisages the settlement of roughly 40,000 acres duringthe next four years. But, the large amounts of money that will be needed -

largely for land acquisition and site development - will undouibtedlylimit the attainment in full of this high priorityr objective in the timeperiod indicated unless the Jamaican Government can soon bring the pre-paration of the program to the point where it would become eligible forfinancing by official external lending agencies (cf. Chapter on PublicInvestment).

19. The existing marketing axrangements for such export crops assugar, bananas, citrus, coffee and cocoa are adequate (cf. Appendix 2).However, up to 1963 the absence of proper marketing and storage facili-ties for products mainly destined for domestic consumption seriouslyhampered the development of domestic agriculture. In that year, theJamaican Government established the Agricultural MIarketing Corporationas a public autonomous body to provide farmers with assured outlets fortheir produce by creating an efficient system of marketing and storagefacilities and, in some cases, a minimum price scheme. The Corporation,which now owns warehousing facilities in 31 centers and plar.s to builda marketing terminal in Kingston, has already had a significant impacton agricultural production in its first two years of operation. Theconstruction of additional storage capacity and the installation of mcdernhandling equipment for agricultural products are of particular impor-tance to Jamaica where, in recent years, substantial losses in food produc-tion occurred due to spoilage. The government is planning to increasethe scope of the Corporation's operations, for which substantial publicoutlays and an improvement in the Corporation's operating procedureswill be required. The government recognizes that the expanded opera-tions should be on a sound commercial basis, like the public marketingboards and commodity orgEaizations dealing with export crops.

20. The credit needs of the larger farmers, who are mainly export-oriented and have clear title to their lands, are adequately met throughthe country's extended network of commercial banks (the amount of agri-cultural credit outstanding more than doubled in the 1962-1964 period).

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However, credit to the smaller farmers, which is mainly channeled throughthe Agricultural Credit Board, a public body which obtains its fundsprimarily from the Central Government, has not become available in asufficient volume. Although the volume of the Board's outstanding loansmore than doubled between 1960 and March 1965, from 12.6 million to r5.4million, a large credit gap remained uncovered. The main reason whythe Agricultural Credit Board could not increase its lending at a higherrate was the serious administrative and financial difficulties whichthe Board experienced over the past few years. The latter are primarilycaused by the Board's inability to recover its outstanding loans ade-quately. These loans were not always of a sound commercial nature asmany of them were made to disaster-struck fa;^mers on an emergency basis.The Jamaican Government has rightly decided to put egricultural crediton a sound commercial basis. In addition to reorganizing the Agricul-tural Credit Board, the government is encouraging the commercial banksto increase their lending to agriculture. For this purpose in 1965,the Farm Loans Act was passed under which the government during the nextthree years guarantees losses at an amount not exceeding 10 percent ofthe aggregate principal amount of commercial bank's outstanding loansto agriculture made under the provisions of the Act. The total guar-antee ceiling initially has been set at L5 million. Furthermore, exten-sion officers are now to assist small farmers in drafting their loanapplications to the commercial banks. This latter provision may havean even greater impact on the volume of agricultural lending to smallfarmers than the guarantee provision by itself.

21. The government is now planning to expand agricultural educa-tion at the lower and medium level, including the tripling of enroll-ment capacity of the Jamaica School of Agriculture. For this purposeit has requested the technical support of a UNESCO team of experts andt'he financial support of the IBRD.

Trends and Prospects in the Main Crops-

22. While the production of some of the major export crops stag-nated in the fifties, it appears that a significant breakthrough hassince occurred. This was largely achieved through policy improvementsaffecting almost all major crops and through private sector efforts.In addition, agricultural production for domestic consurnmtion increasedsubstantially in the past few years, largely caused by well-concentra-ted government support of the small farmers' production eifo2t'3. Theprincipal illustrations of these domestic efforts and their re:ults arenoted below.

1/ For a detailed account of trends and prospects in Agriculture, seeAppendix 2.

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23. T_he production of sugar, which is the country's chief agri-cultural product, increaSed rapidly from 335,000 tons in 1958 to 484,000tons in 1963, and would have amouinted to over 500,000 tonis in 19614 inthe absence of unusually heavy rains which reduced the 1964 crop to 474,000tons. Currently, about one half of the sugar cane is grown by smallerfarmers (as compared to 37 percent in 1953) who rapidly increased theirproduction, largely stimulated by technical assistance from the privateSugar Manufacturers' Association. The remainder is produced on largesugar plantations where pr-oductivity is relatively high. The industryis capable ofL further incr-eases in output, particularly from improve-mnents in yields per acre. At present these improvements are taking place.On the basis of these impr-ovements, sugar production could rise to 700,000tons by 19710. Howe-ver, the international sugar outlook is not encourag-ing and Jamaican cane growers and sugar produLcers are now faced withthe need to limit their expansion plans substantially, possibly to about560,000 tons. Furthermore, Jamaica is a high-cost sugar producer. Itscosts are being pushed to levels close to high preferential prices re-ceived in the United Kingdom and in the United States, largely on ac-count of union pressures on wage rates.

24. The annual production of bananas (Jamaica's second largestexport crop) fluctuated around the 14 million stems level in thle 1953-1960 period, failing to increase largely because of unsolved diseaseand other problems. Since 1961, however, following the successful ef.-forts of the Banana Board - a public body - to increase production andimprove its quality through improved di-sease control and heavier useof fertilizer, production steadily increased to 16.5 million stems in1964. The Board is the scile buyer and exporter of bananas on the is-land and operates on a sound commercial and technical basis. It cooper-ates closely with the private All-Island Banana Growers' Associationin executing a Banana Replanting and Rehabilitation Program, and pro-vides farmers writh substantial- technical and other assistance. Here,too, Jamaica is a high cost producer, which complicates the intentionsof the Banana Board to diversify exports from the United Kingdom - itstraditional e-xport market - where banana consumption is only increas-ing moderately. Although Jamaica has a substantial potential to increasebanana production, exports will rise only slowfly in line with the in-crease in U.K. consumption, with not more than marginal quantities shippedto other countries unmless production costs can be reduced through rais-ing productivity.

25. Its favorable climate and geographical situation makes Jamaicaa natural grower and exporter of citrus fruit and in recent years - underthe stimulus of a Government-sponsored Citrus Development Plan - theproduction and export of citrus and citrus products increased rapidly.in 1962, the private Citrus Growers' Association - guided by recommenda-tions of an international firm of management consultants - launched aplanting program to increase output. The program should lead to an annual10 poercent increase in production and exports, in the expectation that

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Jamaica can cortinue to compete successfullly with Brazil, British Honduras,the United States and the 1Nediterranean countries which have also launchedsizeable citrus expansion programs.

26. Exports of cocoa increased rapidly in the 1958-1902 period,frcm 339 to 2,200 tons, and could have risen to about 2,500-3,300 tonsby 1964 if the country had not been hard hit by the Flora Flood rainsof October 1963, w-hich reduaced 1964 exports to 1,245 tons. The mainstimulus to increasing production and exports came fromi the Government-sponsored Cocoa Expansion Scheme under which the acreage under cocoaincreased from 12,000 in 1957 to 35,000 in l964, the larger part of itnow being planted with high-yield hybrid trees. The scheme Jcf. Appen-dix 2) is being executed byvr the Cocoa Industry Board, a publ'c body whichis the sole buyer and e:;porter of cocoa beans. its continuing effortsto raise production and improve its quality should lead to a rapid risein production and exports in -the years ahead, from 3,000 tons in 1965to 5,000 tons by 1970.

27. The production of Jamaica's high qualit-y offee steadily de-clined since 1900, largely as a result of the subdivision of the planta-tions. However, in 1961 production started to increase and rose from18,500 bags in that year to 23,000 bags in 1964, mainly because of theefforts of the Coffee Industry Board, a public body, which launched aCoffee Resuscitation Schere. Under this scheme, pruning equipment andfree supplies of fertilizer are made available to participating growerswho agree to cut back unproductive trees. The net effect of this schemeamd other extension efforts should be a steady increase in productionto about; 40,000 bags by 1970.

28. Although the consumption of milk and milk products nearly dou-bled between 1956 and 1964, the volume of milk produced declined in thisperiod, largely as a result of deficient distribution condi'tions andunsatisfactory production practices. Tne resu'lting low incomes derivedfrom dairying led far-ers to reduce their herds. To correct this situa-tion, the Government is now undertiaking a long terrm program to devel-op the :Local dairy industry which calls for a doubling of present milkproduction by 1968 through annually settlingz farmers on 60 new farmsof 25 acres as well as through assisting in improving existing farmsranging in size between 30 and 120 acres. In addition, distributionconditions are being iLmproved. Finance for herd improvement and mechan-ical equiDment will be made available through the network of commercialbanks and dairy farmers will be trained in a new Farmers' Training Center.The programi - which is being given the high priority it deserves - ispart of a ten-year plan extending to 1973. Total costs of the firststage extending to 1967 are estimated at about UJS$6 million, for whichthe government has recently obtained a UW33.8 million loan from AID.Tfhe execution of the program should lead domestic production to coverover 50 percent of the consumption of dairy products 'oy 1963 as comparedto 3° percent in 1964.

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29. In the 1959-1964 period, especially towards the end, the in-crease in meat production lagged considerably behind the rapid increasein consumption, largely because of government policies to control pricesat uneconomical levels and unsatisfactory animal husbandry practicesof the smaller farmers. Except for poultry - the production of whichmore than doubled in five years, leading the country's self-sufficiencyin broiler meat - meat imports rose from 14 percent of domestic consump-tion in 1959 to 23 percent in 1964. They are expected to rise to 30percent in 1966 unless vigorous steps are taken to develop the country'sample potential for the production of beef and veal. Although a signi-ficant production increase should ultimately result from the expansionof the dairy industry, this by no means reduces the need to formulatea beef cattle expansion program aimed at reducing the country's depend-ence on imported meats.

30. The agricultural policies and programs outlined above, whichare being executed and planned for the years ahead, are rightly aimedat increasing agricultural productivity and incomes. These efforts,together with the planned increase in electricity, schooling and watersupply facilities in these areas should make rural life more attractiveand help to reduce migration to the cities. A local fertilizer plant,am animal feed mill and some food processing industries are being estab-lished. There are already some signs that the h gh level of food im-ports - a large part of which could be produced economically in Jamaica -which rose by 22 percent in 1964 and constituted 20 percent of all im-ports, is already beginning to decline. During the next five years,even with increased domestic consumption of agricultural products, thecountry's dependence on imported food products should be steadily re-duced. Agricultural exports are also expected to rise substantially(see Appendix 3).

Manufacturing

31. In the last decade, a relatively large and increasingly di-versified industrial sector was built up in Jamaica, which in 1964 gener-ated as much as 14 percent of the Gross Domestic Product. Industrialactivity more than doubled since the mid-1950's and, in contrast to theperiod prior to 1959 when production consisted primarily of sugar, foodsand beverages, it is now dominated by light consumer goods, construc-tion materials and chemicals. From 1961 to 1963 the rate of industrialgrowth was to an important extent affected by uncertainties incidentto Jamaica's transition to independence, which led the industrial com-munity to adopt a wait-and-see attitude. However, the policies of thenewly independent Jamaican Government rapidly restored the confidenceof the dynamic and socially-conscious private sector, and since the latterhalf of 1963, industrial production increased rapidly, attaining sevenamd eight percent in 1963 and 1964 respectively. Since 1959, Jamaicahas become an exporter of such manufactured products as clothing, cos-metics, and to a lesser extent, of industrial machinery. These exportsincreased nearly five-fold during 1959-1964 and amounted to US$14 mil-lion in 1964, or seven percent of total export earnings.

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32. This grow-th in industrial production was largely stimulatedby active government policies to create an environmenet that would helpfoster industrialization so as to increase employment, industrial ex-ports and to achieve greeter industrial self-sufficiency. Since 1950,a series cf industrial incentives laws were passed which provide forexempticn from import taxes on construction and raw materials, acceler-ated amortization for tax. purposes of fixed investment, and tax holi-days extending up to 7 years. These laws have contributed to the estab-lishment since 1960 of ,6 new manufacturing enterprises with capitalinvested to the amount of 18 million and employing over 8,000 workers,clearly an impressive achievement. In addition, in 1952 the governmentestablished the Jamaican Industrial Development Corporation which pro-motes the deve'lopment of industry in Jamaica through its Factory Build-ing Program. Since 1958, 27 factories have been built under this pro-gram at a cost of TL1.8 million for lease to private entrepreneurs, mainlyon the Kingston Industrial Estate. An important aspect of the Corpora-tion's operations is its promotional activity abroad. Through its of-fices in New York, London and Toronto, the Corporation is seeking tocreate an active interest in jamaica's industrial potential among theindustrial community. In 1959, the Jamaican Government established theDevelopment Finance Corporation which makes long-term finance availableto industry. Since that year, some L2.3 million was lent for industrialdevelopment and tourism, which has contributed to Jamaica's recent indus-trial growth.

33. In 1965, the Jamaican Government initiated a still more activerole in promoting Jamaica's industrialization. In an effort to furtherinduce the private sector to take up import-substitution actlvities,quantitative restrictions were imposed on a large number of productswhich could be produced economically in Jamaica. The government adoptedthese restrictions rather than raising the relatively low 'Level of tariffsin view of the more direct impact that restrictions would have on import-substitution. The larger part of these restrictions were imposed onlyafter a careful analysis was made of the feasibility of economical localProduction of the products that were formerly imported. Plans are underconsideration to increase the tax holiday period to 10 years (and 15years for industries that settle outside of Kingston). Further prog-ress was made toward developing a stock market in Kingston. The Jamai-can Government is taking an active part in preparations for the forma-tion of a private Developmenit Finance Company with the technical assist-ance of the International Finance Corporation, in line with its desire-to strongly support the private industrial sector in its expansion plans.

34. While the results of the government's industrialization poli-cies have been encouraging so far in terms of industrial growth, import-substitution and export-promotion, the government feels that the impactof its policies on employment has not been substantial. It is, there-fore, reviewing the Incentives Legislation under which, at present, bene-fits are not necessarily related to job creation. In addition, since

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the introduction of quantitative restrictions, the government is con-cerned to prevent high cost industries developing in the now highly pro-tected market and, to avoid the formation of monopoly situations, per-mits competing industries to establish themselves in Jamaica. It isalso increasing its supervision of costs and the price policies of indus-t;ries operating under the incentives lawfs. In this connection, a Bureauof Standards is being established to control the quality of productsmade under the protective arrangements.

35. Although the internal market is small, there is still consi-derable room for further economical import substitution and expansionof industrial production. Numerous private projects are in the plann-ing or construction stage, such as a flour mill, an animal feed mill,plants to produce tires, plastics, clothing, shoes, fertilizers and ba-gasse board. A locally-owned company is presently constructing a 30,000ton steel fabricating plant, scheduled to commence production in 1966.The 26,000 barrels' foreign oil refinery which came on stream in 1964could be Et first step towards the development of a petrochemical com-plex. The investment proposals presently being considered by the Indus-trial Development Corporation for benefits under the Incentives Lawstotal an impressive 1l0 million, and indicate that industrial produc-tion, for the domestic market as well as for exports, should increaseeat a substantially higher rate in the years ahead than in the recentpast. The prospective rise in house construction should lead to size-able increase in demand for building materials, part of which can bemet by local produiction, and should thus lead to a substantial increasein output of local industries producirg these materials.

:36. This prospective rapid rise in industrial activity should leadto a rapid increase in demand for manpower, industrial finance, elec-tric power, water and agricultural raw materials. To help provide trainedmanpowter, the Jamaican Government is now planning a substartial expan-sion of general secondary and technical education. The demand for shortand medium-term credit should be adequately met by Jamaica's highly devel-oped commercial banking system. Long-term finance should become increas-ingly available when the private Development Finance Corporation startsits operations, possibly in 1966; in addition industries are increas-ingly raising finance in the Kingston Stock Mlarket. The demand for elec-tric power should also be adequately satisfied, as the Jamaica PublicService Company is presently working on a substantial expansion of itsgenerating capacity during the next five years. In addition, the govern-ment has uinder advanced consideration a project to meet the rapidly ris-ing industrial water requirements in the years ahead.

37. The high quality of Jamaican entrepreneurship, together withthe government policies referred to above whiich are soundly designedto support the already dynamic private sector, point strongly to theconclusion that Jamaica's industrial prospects are highly encouraging.

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The prospective increase in industrial production shou'd have a favor-able impact on the country's exfternal payments position and on employ-ment. The direct impact on goveriment revenues, however, is likely tobe small, in view of the long periods of tax benefits which are beingoffered to most of the industries establishing themselves in the yearsahead.

Mining

38. Since the commencement of bauxite mining in 1952, the indus-try experienced raDid growth. Bauxite production increased nearly seven-fold between 1953 and 1964 to about eight million tons, of which sixmillion tons are exported by three United States controlled companiesto their domestic alumina producing facilities. A local subsidiary ofa Canadian company mines the remainder and processes it into alumina,which is subsequently exported mainly to Carnada and Europe. For thepast six years Jamaica has been the world's largest exporter of baux-ite and still has about o00 million tons of economically mineable re-serves, about 75 years' supply at the 1964 rate of extraction. The rela-tively high grade and easy accessibility of Jamaica's bauxite deposits,together with the Island's proximity to Txorth America, have assured Jamai-can bauxite of ready markets in the U.S. and Canada. In 1964, aboutone-half of the United States' bauxite consumption was covered by im-ports from Jamaica.

39. The development; of the mining industry provided a maJor stimu-lus to the rate of Jamaican ecoromic growsth in the past decade. Thecontribution of the industry to the Jamaican economy in the form of wagesand salaries, taxes, royalties and local purchases rose rapidly in thisperiod. The industry no, accounts for about nine percent of the GrossDomestic product as compared to four percent in 1954. Exports of baux-ite and alumina have enjo2red uninterrupted growth since mining started.With the exception of small declines in 1959 and 1963, they increasedfrom a gross value of US1i24.3 million in 1955 to US$94-8 million in 1964,eouivalent to about 36 percent of the country's gross foreign exchangeearnings. Royalties and income taxes paid by the bauxite-alumina indus-try increased rapidly to T6.6 million in 1964, or to about 13.5 percentof the government's revenues. The impact on employment, however, hasbeen considerably less: about one percent of the country's labor forceis currently employed by the industry. The industry's ability to payhigher salaries than the average prevailing elsewhere has to some extenthad an unfavorable effect on the country's wage structure. Wage ratesin the bauxite-alumina industry have set a standard which the labor unionshave been trying to achieve for most of the other sectors, frequentlywithout reference to productivity. As a result, between 1962 and 1963,wages increased much faster in the non-mining sectors than in the baux-ite-alumina industry (see Table 25) and contributed towards sizeableincreases in production costs.

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40. Presently, the three companies exclusively engaged in baux-ite mining are undertaking a substantial expansion of their export poten-tial. This should rise from about 6 million tons in 1964 to 9 milliontons by 1970. Although extensive new deposits of bauxite have been dis-covered in Australia and Guinea, and the recent revision of U. S. stock-riling policies precludes deliveries from Jamaica to the stockpile dur-ing the next fiv-e years, bauxite exports should increase in line withthe expansion of production capacity. The volume of exports, therefore,should rise from 6 million tons in 1964 to 9 million tons by 1970, yield-ing USO;66.2 million in gross foreign exchange earnings as compared troTjS$44 million in 1°64. The net contribution of the additional bauxiteexports to Jamaica's balance of payments, however, is considerably lessand may amount to only US$10 to US$*12 million (see Annexes 3 and 4).In addition, Alcan Jamaica Ltd. is presently carrying out part of theplanned expansion of its alumina producing facilities which should leadto a 14 percent increase in production during the next four years. Alu-mina exports should therefore rise from 768,000 tons in 1964 to 880,000tons by 1970, yielding US;58 million as compared to UIS$51 million in1964.

Trourism

41. Jar.aica's warm and sunny climate, beautiful beaches and moun-tainous scenery, its accessibility to the United States and Carnada, and-the availability of modern hotel facilities have contributed to a rapidexpansion of its tourist industry. Tfhe principal resort areas are lo-cated on the north coast of IEontego Bay and Ocho Pios. Kingston, wherea modern hotel has been constructed recently with the aid of a govern-ment guarantee, is noa also an im.portant tourist center. Tourist expendi-tures have become an increasingly important source of foreign exchange.In 1964 the industry generated TuS144 million, or 12.8 percent of thecountry's foreign exchange earnings.

42. Althouigh the industry developed rapidly in the past decade,its growth was interrupted in 1962 and 1963 largely on account of poli-tical tensions in the Caribbean area and competition from other (low-cost) resort areas which affected particularly tourist-traffic in theshort-stay category. To meet these unfavorable developments the govern-ment increased promotional expenditures for tourism (which doubled fromM)418,o00 in 1962 to =(35,000 for 1965) and provided increased tax andother incentives for the expansion of recreation facilities, which contri-buted to the resumption of the high growth rate in the industry in 1964and continuing into 1965. In addition, the remarkably effective effortsof the Government Jamaica Tourist Board to encourage tourism in the off-season have resulted in a 40 percent increase in tourist traffic in thefirst half of 1965 over the same period of 1964.

43. Tourism in Jamaica has a large expansion potential. Bu-t eventhough at present the private sector is developing plans to increase-total hotel capacity 'oy over 20 percernt, the industry is facing a seri-ous shortage in hotel capacity for which private capital is not easily

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available v-ithin Jamaica. This situation is further complicated by thestandard practice of leading international hotel chains to lease localhotels rather than provide the finance for constructing them. The estab-lishment of a private Development Finance ComparLy may be an additionalpossibility for financing in this area. Hotel operations are less riskynow on account of the increased stability in tourist traffic resultingfrom the Tourist Board's efforts to encourage the stay of medium-incometourists, and experienced international hotel operators are willing toprovide management facilities. However, a large finarcing gap remainsto be filled and the Jamaican Government is taking such steps as guaran-teeing loans for particular protects to help to fill this gap. The pro-spective exparsion of tourist accomodation, the recent reduction in airfares between the U. S. and Jamaica, and the promotional activities ofthe Tourist Board should lead to a strong expansion of tourism in theyears ahead and therefore to a substantial increase in fore'gn exchangeearnings as long as political stability continues to prevail in the Carib-bean area (see para. 42).

III. PUBLIC FINAICTES

44. During the 1955-1965 per-'od Central Government revenues nearlytripled from T16.6 million, in 1955 to T49.2 million in 1965, largely causedby the high rate of growth whichl the economy experienced in that period andfurther stimulated by a series of tax measures undertaken by successivegovernments. Current revenues rose from 12.6 percent of the Gross DomesticProduct in 1955 to 14.7 percent in 1962 when Jamaica reached Independence,and rose further to 16.8 percent of the GDP during the fiscal year endingMarch 31, 1965. Current revenues increased by about one-third in the 1962-1965 post Independence period alone. Since current expenditures increasedsomewhat less (even though the country had to undertake the financing ofdefense and foreign affairs' expenditures, formerly assumed by the UnitedKingdom), the current account surplus rose slightly, to 2.3 percent ofGDP in 1965. However, in this same period central government investmentexpenditures rose rapidly from 10.8 million in 1962 to Ul4.7 million in1965. The fiscal deficit, therefore, increased substantially and amountedto 19 percent of 1965 current revenues. These deficits were increasinglyfinanced by long term borrowing. Although the Jamaican Government hassuccessfully maneged to develop the local capital market (Government stock -issues rapidly increased from bl.0 million in 1962 to L5.4 million in 1965),the government's dependence on foreign borrowing (mainly in the privatecapital markets of London, New York and Toronto) to finance essential in-vestment expenditures rose markedly. (see chapter on Public Investment)An appreciable further expansion of investment expenditures is beingplanned for the near future. However, since possibilities to raise fi-nance in the United Kingdom capital market have been substantially re-duced on account of balance of payments' difficulties and access to theUnited States market has been inhibited by the Dominican Republic devel-opments during 1965, the Jamaican Government is now having to reconsiderits investment expenditure and financing plans for the next few years.

1/ In Jamaica, Government; bonds are commonly called "stocks".

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45. Jamaica's principal sources of revenues are income taxes, customsduties and excise taxes. Income taxes account for about 40 percent of currentrevenues. Collections are made at the source. The basic individual incometax is progressive, starting at 8 3/4 percent on the first L200 of taxableincome (incomes below L300 are exemqpted) and rising to a maximum rate of37 1/2 percent on taxable income in excess of Ul.050. A surtax levied ongross income in excess of L2.400 ranges frcm 6 1/4 percent on the first Ll,000of such excess to 37 1/2 percent on income in excess of L7,400. thus, themaximum total individual tax rate is 75 percent on gross income in excessof L7,400. Corporations currently pay a flat rate of 40 percent of corporatetaxable income. Recently some changes in income tax legislation have beenintroduced and some measures have been taken to improve the administrationof income tax collections. Firstly, a pay-as-you-go system has been adoptedwith respect to taxes payable by companies, which should lead to a furtherreduction in arrears. Secondly, the Jamaican Government is now studyingways to improve income-tax collections from self-employed persons. Inaddition, a 100 percent increase in the companies' profits tax will becomeeffective in 1966. These measures, together with a further increase intaxable capacity in the years ahead, should lead to a steady rise in incometax collections.

46. Income tax rates already being high, in the past three years theJcmaican Government has mainly relied on increasing excise duties and importtaxes to increase revenues. These new taxes, which yielded ,0.5 million in1963, ;1.2 million in 1964 and Ll.5 million in 1965, largely contributedtowards the 40 nercent increase of indirect tax collections in that period.In line with the government's policy to promote import-substituting activi-ties, import duties on raw materials and machinery have been kept rather low,at about six percent. The main impact of duty raises has been directed atluxury imports, which pay at present 78 percent. As imports of foods, rawmaterials and machinery contribute the bulk of the country's impo;ts, theaverage duty rate on the f.o.b. value of imports amounted in 1964 to only16 percent. In order to soften the impact of import-substitution on revenues,the Jamaican Government has been rightly and successfully pursuing policiesto depend for its revenues increasingly on taxation of domestic activity ra-ther than on customs' duties. As a result, import taxes as a proportion oftotal revenues declined from 30 percent in 1962 to 31 percent in 1965. Inthis connection, the government also passed a consumption duty law in 1965 -taxes are levied on products that were formerly imported and are now pro-duced locally - which should yield LO.3 million in 1966 and rise steadily.However, the Jamaican Government feels there is still some scope for rais-ing revenues by increased taxation on imports, in particular foods and rawmaterials which can be produced locally at reasonable cost. Such measureswould also contribute towards inducing local production of such items.

47. On the basis of existing rates, total revenues should rise bysomewhat more than the prospective rate of economic growth. The govern-ment expects collections to rise by an annual seven percent at the minimum.

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As there is some scope for increas.ng income tax collections and raising theaverage duty rate on imports and domestic activity, revenues could rise byabout 10 percent per annum once appropriate legislation is introduced.

48. Government current exnenditures rose rapidly in the 1962-1965period from _,30.7 million to P44.1 million, reflecting increased essen-tial public services made available to the Jamaican population, mainlyin the fields of education, health, agriculture and public works. De-fense expenditures accounted for 3-4 percent of total current expenditures.As current revenues increased faster, the current account surplus roseslightly frcm L6.2 million in 1962 to 16.6 million in 1965, and publicsavings available for investment, after public debt charges and sinkingfund contributions were met, rose from L5.3 million to T5.5 million inthat period. In the past, the jamaican Government consistently plannedits finances so as to cover a substantial portion of its investment ex-penditures by public savings. However, fairly constant public savingstogether with a rapidly rising level of investment expenditures have ledthe government to incur increasing fiscal deficits, which jumped fromL5.5 million in 1962 to T9.2 million in 1965. These deficits were largelycovered by long-term domestic and foreign borrowing and by the issue ofTreasury Bills.

49. In the past three years the Jamaican Government has been ableto have increasing recourse to the domestic capital market. Local long-term borrowing increased from a gross level of 1, million in 1962 to arecord gross level of T6.6 million in 1964. Most of these governmentstocks were taken up by the insurance companies; autonomous publicbodies like the Government Savings Bank and the Commodity Boards tookup a relatively small amount. At the same time, Treasury Bills wereissued up to L1.8 million in 1962 and L2.7 million in 1964. In addi-tion, in the same period the Jamaican Government raised about 115.5million abroad, by far the larger part of it in private capital mar-hets in the United Kingdom and Canada. As a result, the direct publicdebt (i.e. not includirg guaranteed debt) rose from 637.9 million in1i962 to T58.3 million in 1965, and provisions for interest, sinking fundand management charges increased from Br million in 1965, or about 8percent of total 1965 revenues.

50. The fairly rapid rise in Jamaica's public debt and the nowrelatively large importance of debt service charges in Jamaica's publicfinances has caused the government to reconsider the appropriateness ofits past and prospective policies to finance an increasing percentage ofthe country's public investment expenditures through long-term borrowingrather than increasing current account savings substantially. The pro-blem stands out clearly in the 1966 budget. Savings available for invest-ment are projected to drop to L3.6 million while investment expendituresare planned to rise by L2 million. The 1960 fiscal deficit, which willon these estimates rise to T13.1 million, is to be covered by internalloans and Treasury Bills up to 5.71 million and by foreign borrowing upto L8.2 million. Although the Jamaican Government still has a substan-tial margin to service additional debt, the government wants to use it

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cautiously. In addition, in view of the recent difficulties which thegovernment experienced in raising long-term finance in the private capitalmarkets abroad, the continuation of such financing arrangements at thelevels originally envisaged mav not be possible in the near future. Thegovernment is accordingly now faced with the prospect of having to raisethe level of budgetary savings in order to permit investment expendituresto rise as planned. Raising public savings will have to be done largelythrough increasing revenues. The main part of the envisaged increase incurrent expenditures is on essential services in the fields of educationand public health, for which new facilities are being built and whichcannot be easily cut back.

IV. PUBLIC INVESTMENT

51. While investment expenditures of the public sector remainedaround the 1l0-11 million level in the '960-1962 pericd, follovingIndependence in 1962 they increased rapidly to U14.7 million in thefiscal year 1965, or to about five percent of GDP. In 1962, the JamaicanGovernment formulated a Five-Year Independence Plan for 1963-l968 whichaimed at raising the level of public investment, particularly in thefields of agriculture, education, water supply and hotsing. The planreflected a determined e-2fort to develop the rural agricultural eco-ncmy, thereby reducing unemployment and migration to already overcrowdedcities. Although the Plan is outdated now and has only been revised inpart, it still reflects the present government's fundamental strategy foreconomic development. This strategy includes the adequate provision ofinfrastructure facilities in support of the development of agriculture,industry, tourism and the other main sectors. Jamaica is fortunate tohave a strong local and fore-gn private sector which owns such publicservice facilities as ports, power and telephones and is now engaged ina substantial expansion of these facilities. A maJor port development isunder way in Kingston at a total cost of L7 million which should meet thedemard for berth capacity adequately in the years ahead. In addition, theJamaica Public Service Company will shortly undertake a doubling of itsgenerating capacity to be carried out in the next five years at a cost ofbJS million, which should adecuately satisfy the rapidly rising power re-quirements in the years (Mead in addition to providing electricity for thefirst time to a large part of the rural areas.

52. In the past three years Jamaica's public investment expenditureshave been largely made in accordance with the priorities of the Independ-ence Plan and have contributed to the resumption of economic growth, inparticular in the domestic agricultural sector. Important projects havebeen initiated in the fields of agriculture, public works and water supply.

53. Within the past few months the Jamaican Government revised thepublic investment portion of the 1963-1968 Plan: expenditures are now torise from the -76.7 million level budgeted for the fiscal year 1966 tow21.5 million in 19b7 and B20.7 mil'lion in 1968 (see Table 33). This re-vised program rightly puts increased emphasis on public investments in

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agriculture and education., and includes such projects as the =2.2 milliondairy develooment project., the expansion of facilities operated by theAgricultural Marketing Corporation, and the expansion of the educationalsystem including the Jamaica School of Agriculture, awd other general andtechnical education. In addition, some drainage and water control schemesare to be carried otlt and the country's road system will be further im-proved. An extensive improverneit of the road connecting Kingston withthe INorth Coast will be carried out with the assistance of a US$5.5 mil--lion IBRD loan. Also included in the program is the first part of theL18 million Harkiers' Hall water supply and flood control proœect whichis presently under advanced study by the Go-.rernment. In addition tothese relatively large prolects the program includes a large number ofsmall projects that constitute the bulk of Jamaica's planned publicinvestment expenditures. These small pro'ects which are of high priorityand are concentrated in the fields of animal and crop development, agricul-tural credit, feeder roads, minor drainage, reclamation and water controlschemes, agricultural research, factory building, government buildings,markets, housing, water supply, industrial and tourist development, reflectthe priority needs of the economy.

54. However, unless budgetary savings can be raised substantiallythrough increesed taxation and, notwithstanding the present difficulties,foreign finance can be raised in larger amounts than in the past, thegovernment faces the possibility that the investment expenditures plennedfor the fiscal years 1967 and 1968 will have to be reduced somewhat.

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FINANCING OF GOVERNMENT IIVESTMENT EXPENDITURES 1964-19681J(M iTions of Jamaica pounds)

A C T U A L BUDGETED P L A N N E D1964 __965 1--i9-66 1967 !T6_ 8

T'otal Investment Expenditures 12.2 14.7 16.7 21.5 20.7

Financed from:Government Bhudget 3.3 5.5 3.6 4.7 3.5

Current Account Surp:Lus 7h.4) T6W) (7.2) (6.4) (5.4)Less Debt Service (-1.1) (-1.1) (-3.6) (-1.7) (-1.9)

Foreign Grant Assistance 0.4 o.4 0.1 - -

Net Use of GovernmentDeposits -0.7 -1.2 -0.9 _ -

Domestic Borrowing 9.3 5.74 5.7 7.1 8.2Treasury Bills (2.7) ) (1.1) T(.1) (1.2)Long term (6.6) (5.4) (4.6) (6.0) (7.0)

Drawings on existing externalloan commitments _ 4.6 8.2 2.3 2.4

Still to be Financed - - - 76. 776

l! Budget Years ending March 31.Source: Ministry of Finance and Miission estimates.

55. With present tax laws, total current bedgetary revenues shouldincrease by about 7 percent irn the years 1967 and 1968. The Jamaican Gov--ernment, however, expects current expenditures to rise by an annual 10 per-cent following the increased level of public investment expenditures inthe recent nast, in narticular for educational and public health services.Savings available for investment, therefore, would diminish from L5.5 mil-lion in 1965 to an average of about ;4 million in the years 1967 and 1968,thus covering roughly only 15-20 percent of the planned level of publicinvestment as compared to about 35 percent in 1965.

56. In line with the prospective increase in private sector sevings,the Jamaican Government judges it feasible to raise about T7 to ;8 mil-lion in the local capital market in the 1967-1968 period, as compared to

L5 to 16 million in the years 1965 and 1966. Of this amount L6 to L7 mil-lion would be raised by the issue of Government Stock, the remainder through

Tlreasury 'Bills.

57. The government has a substantial pipeline of committed but stillundisbursed external project loan funds to draw on. In the past threeyears, the Jamaican Government obtained loans from AID, totelling US$11.6million, for water supply, low cost housing, dairy development and

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feasibility studies. In 1965 it obtained a US$i5.5 million loan from theIBRD for an extensive improvement of the malor road connecting Kingstonwith the North Coast. It also completed negotiations for a Can$1.5 mil-lion loan with the Canadian Government for the construction o-f a bridgeand sewerege facilities. Disbuirsements of loans presently signed shouldamount to I-2.3 million in 1967 and L2.4 million in 1968.

58. On the basis of the above-mentioned estimates, a financina gapof about ;6 to W7 million annually will appear in the 1967-1968 period.The Jamaican Government is now considering how it cani complete the finan-cing plan for its investr:ent program. As the possibilities of the Jamai-can Government to continue to finance a large part of its developmentalexpenditures through external general purpose borrowing are now limited -excellent creditworthiness notwithstarding - the government has begunto reorient its project Prlanning to make possible increased access tothe official external lending agencies. Unfortunately, because of thesmall size of the country and the large number of government institu-tions in Jamaica dealing with the Preparation and execution of projects,the typical public sector project is too small for individual consider-ation by these external lend4ng agencies. The government is starting todevelop larger composite "packages" of small but related projects, andis considering how to organize itself for the identification, executionand administration of these "packagesi' for external financing. But inview of time limitations, it is clear that only a small part of the totalI,14 million finarcing gap for fiscal 1967 and 1968 (i.e. April 1, 1966 -March 31, 1968) can be expected to be covered by conventional externalproject financing. Even were the official external lending agencies tofinance taio-thirds of the total costs of the 'ppackages" that are beingprepared, probably no more than a total of °? million could be disbursedduring this period.

59. These estimates suggest that, while the Jamaican Governmentshould have no difficulty raising public in-estment expenditures duringfiscal 1967 and 1968 above the level achieved in 1965, additional finan-cing must still be obtained if public investments in these two years areto increase to the magnitude planned. Even allowing for some slippage inproject execution, the actual shortfall is likely to amount to about 19 toYlO million, equivalent to some 20 to 25 percent of total planned publicinvestment expenditures.

60. The Jamaican Government is now exploring alternative ways tofill this gap. One approach of the government has been to volunteer enter-ing into an understanding with the external lending agencies on the size,composition and financing of its development program and on its overalldevelopment policy in ret;urn for general program assistance. At the sametime, however, the government is reconsidering its financing plans, andrecognizes that it may have to increase taxation further in order to raisethe level of bud7etary savings and also possibly defer some expendituresnow planned for 1967-68. The need for some further increase in publicsavings is particularly likely, looking toward the longer term. While the

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total domestic savings effort has been a good one and part of the risingprivate savings flows (13 percent of GDP in 1959 and 15.5 percent in 1963)has been available to help finance government investments, the publicsector's savings effort has been deteriorating. In spite of rapidly ris-ing revenues (see para. 44), budgetary savings have not been increasing,and have declined as a percentage of GDP (from 2.8 percent in 1961 to 1.9percent in 1965). For fiscal 1966 through 1968, they are expected to fallbelow the 1959-65 level in absolute amount, and on present plans willapproximate only 1 percent of GDP by 1968.

61. In the 1960-1965 period, despite increasing reliance on externalgeneral purpose financing of government investment, on the average lessthan one-third of total public investment expenditures was financed byexternal borrowing and foreign grant assistance. Public savings accountedfor about 45 percent of the financing of investment expenditures in 1960and 38 percent in 1965; the remainder was financed through noninflationaryinternal borrowing. For the years 1967 through 1968 public savings arenow planned to cover some 20 percent of public investment expenditures andinternal noninflationary borrowing another 35 percent. The government'suse of private savings has been carefully planned to be consistent withthe private sector's own vigorous expansion plans.

62. 'The government is understandably seeking to obtain from theexternal financing agencies the largest possible contribution to plannedproject financing consistent with the policies of these agencies. Inaddition, it still hopes to raise T9 to bL10 million during the next twoyears through general purpose borrowing in the private capital marketsof London, New York and Toronto to carry out its program as now planned.However, the prospects of new market issues of this magnitude are depend-ent upon an improvement in the balance of payments' position in the UnitedKingdcm and upon the New York investment community's evaluation of poli-tical conditions prevailing in the Caribbean area and are therefore uncer-tain at present. The need for some retrenchment in the investment programand some further increase in the presently contemplated domestic financingeffort cannot therefore be ruled out at this time.

V. MOVETARY AND BALANCE OF PAYMENTS DEVELOPMENTS

Monetary Developments

63. The Jamaican banking system comprises the Bank of Jamaica (thecountry's central bank which started operations in 1961), 6 private com-mercial banks, the government-owned Agricultural Credit Board and theDevelopment Finance Corporation, which are both development finance insti-tutions and a network of government savings banks. The commercial banks,which are all branches of large foreign banks, have their principal Jamai-can offices in Kingston, and had 93 other offices in the country at the endof 1964. The government savings bank has 253 branches located throughoutthe country. The Jamaican public, therefore, is well sunplied with bank-ing services, and uses them. The principal other financial institutions

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in Jamaica consist of life and other insurance companies - most of themagain being branches of overseas companies - building societies, con-sumer credit companies and three trust companies owned by the commercialbanks.

64. As a member of the sterling area and with a formal link betweenthe Jamaica pound and sterling under the modified sterling exchange stan-dard, monetary conditions in the United Kingdom influence the monetaryconditions in Jamaica to a large extent. The six commercial banks oper-ate as sterl-'ng area banks, wh5ch means that they have easy access to theworking balances held by their head offices in London. As has alreadybeen noted earlier, under conditions of rising credit demand in Jamaica,these banks are not limited by the growth in Jamaican deposit liabilitiesin expanding their loan portfolios. As the new Bank of Jamaica has notundertaken discount operation so far, the commercial banks customarilyfinance credit exnansion in Jamaica through drawings on London. The bal-ance of payments impact of such credit expansion has been self-financingand the price impact accordingly negligible. Wher credit increases - asoccurred in 19064 - and import demand rises, these drawings are a-vailableto finance the rising flow of imports. In the 1955-1964 period domesticcredit rose 16 percent annually. Prices, however, increased by only 3percent annually, in line with the increase in imnort prices.

65. The smooth operation of this credit mechanism has depended onthe uninterrupted willingness of the commercial banks to increase theirexternal liabilities. But this willingness has reflected factors otherthan the credit needs of the expanding Jamaicar. economy; namely, thebanks' confidence in Jamaica's economic out'look and in government eco-nomic policies, and the spread between British and Jamaican interest ratesor, more specifically, betwieen the discount rate of the Bank of Englandarid Jamaicam lending rates and between the tender rates for Jamaican andUnited Kingdom Treasury Bi'Lls. As occurred in 1963, there have beenperiods when the banks have preferred to transfer cash abroad by reducingexternal liabilities rather than ircrease their Jamaican assets furtherby this amount. When interest rate differentials have made the transferof funds from Jamaica to London attractive, insurance companies operat-ing in Janaica have also tended to accelerate their normal investment ofpremium income into sterling assets. At such times, Jamaican Governmentborrowings aoroad have tended to substitute for the export of localseavings rather than supplement local savings.

66. Since the establishment of the Bank of Jamaica, the Jamaicanmonetary authorities have endeavored to reduce these elements of insta-bility in the monetary system in order to make maximum use in Jamaica ofdomestic savings collected by the banking system while still preservingaccess to the London working balances of the head offices of these banks.From time to time, the Bank of Jamaica changes its discount rate to pre-serve a reasonable relatiorishio between Jamaican and sterling mroney mar-ket rates. Even though the Jamaican banks do not rediscount in practice,

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their prime lending rates are customarily moved in line with the Bank ofJamaica's discount rate. In addition, the Bank of Jamaica recently im-posed a transfer charge designed to reduce interest differentials furtherand thereby limit the transfer of funds in search of higher short termyields abroad. Also, the authorities have to some extent successfullypersuaded the insurance companies to invest increasingly their premiumincome in locally-issued J'amaican Government stocks rather than in London-issued Janaican Government stocks.

67. The country's banking system is adequately meeting the rapidlyexpanding demand for short-term industrial credit. Between 1962 and1965 advances to industry nearly doubled. In addition, the vast networkof banks enables them to make a significant contribution towards meetingagricultural credit reauirements, although commercial bank credit foragriculture is mainly oriented to-wards the larger, export-oriented farmer.The recently passed Farm Loans Act now encourages banks to further increaseadvances to the smaller farmers by providing guarantees to banks againstcertain losses and assisting farmers to develop bankable projects.

68. While domestic credit contracted by seven percent in 1963,largely as a result of the slowdown in activity which the economy experi-enced in that year, in 1964 it rose by 31 percent to L65 million, nearlyall of the increase being channeled to the private sector. Although partof the increase was financed by the growth in domestic deposit liabilities(;6.8 mill:ion), the remainder (L6.5 million) was financed through commer-cial banks' drawings on their London Offices, as explained above.

69. The Jamaican monetary authorities have traditionally been con-cerned to maintain relative monetary and price stability and have beensuccessful so far in their endeavors. A measure of this success is thewillingness of the Jamaican oublic to hold their savings in the form ofclaims on the banks. Between December 1959 and March 1965, savings de-posits with commercial banks doubled from a16.2 million to L32.3 million.This increase is equivalent to the impressive annual rate of 14 percent.The Jamaican Government is determined to maintain these healthiy monetaryconditions in the years ahead so as to be able to claim the continuedsupport of the banking sys-tem in its development efforts.

Balance of Payments

70. Balance of payments develcpments in the past decade reflect thestrong expansion of the Jamaican economy, which was largely stimulated byforeign private investment in the export sector and financed by the inflowof foreign capital. Thus, while merchandise exports and imports increasedmore than threefold in the 1953-1964 period and, with the exception of 1963,the economy experienced a persistent current account deficit in thatperiod, the country's foreign exchange reserves nearly doubled, and amountedto a healthy I41.7 million in 1964, or about five months imports. With the

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exports of goods and services the econonmy became increasingly open. Ex-ports of goods and services amounted to 42 percent of GDP in 1964 as com-pared to 35 percent in 1959.

71. The main determinant of Jamaica's rapidly rising exports wasthe discovery of bauxite, mining of which started in 1952. Exports ofbauxite and alumina subsequently rose from L2.8 million in 1953 to L33million in 196)4, or roughly 45 percent of total merchandise exports. Atthe same time, however, export.s of other products, such as sugar, bananasand other agricultural products nearly doubled. In addition, frcm 1959onwards, Jamaica became an exporter of manufactured products, mainly ofclothing but also of such other products as industr.ial machinery, and theisland's impressive tourist potential was further developed so thatforeign exchange earnings on account of tourism increased by over 50percent in the years 1959-'964. The net results of these developmentsis that Jamaica is now much less dependent upon exports of agriculturalproducts: the proportion declined from 69 percent of total merchandiseexports in 1953 to 40 percent in 1964.

'72. In the 1953-1964 period merchandise imports nearly increasedthreefold as a result of the strong expansion of the Jamaican econcmy.As a result, imports rose from 27 percent of GDP in 1953 to 34 percentin 1964. The composition did not change appreciably: imports of foodstypically accourted for one-fifth of total imports, machinery and trans-port equipment one fifth, and raw materials and manufactured goods ac-count for the remainder. Thus, while the rapidly rising level of importsof capital goods and raw materials was caused by Jamaica's high and risinglevel of investment and GDP, the threefold increase in imports of foodsreflects the inability of the agricultural sector to expand in line withthe rapid rise in consumer demand for agricultural products. A largepart of the country's food imports could be produced economically in Ja-raaica. Especially since Independence, to stimulate the local productionof agricultural products that were imported has been the serious concernof the Jamaican Government. There are some signs that positive resultsare now beginning to show from the efforts that have been made to thisend (see paras. 14 through 21 above).

73. While Jamaica consistently exrerienced a substantial deficitin its trade account in the past decade (cf. Table 34), the currentaccount deficit was significantly smaller. Large and increasing investmentincome payZrments -directly associated with exoorts of bauxite and aluLmina -were offset by foreign exchange receipts on account of tourism and exportsof other services and remittances by the large numbers of Jamaicans residingabroad.

74. In the past decade, Jamaica's current deficit was covered by alarge inflow of foreign capital both long and short-term. Jamaica'sfavrorable investment climate, together with the discovery and developmentof its bauxite deposits, led to a large inflow of private long-term invest-ment funds. The Jamaican Government also raised large amounts of long-termfinance, mainly i n London, to finance its development expenditures. In

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addition, with the exception of the years 1962 and 1963, the commercialbanks increased their short-term indebtedness to their head offices. Thenet results of these movements was that - with the exception of 1959 and1L964 - Jamaica experienced external payments surpluses large enough to per-mit external reserves to doub'e in this neriod.

75. As econcmic development gathered momentum in the latter half of1963 and 1964, Jamaica's current account balance deteriorated sharply.Merchandise imports increased by an unusuallyr high rate of 25 percent.With stocks partially depleted (the import level remained virtually un-changed in the 1962-1963 period) and rapidly rising levels of investmentand output in 1964, imports of raw materials, capital goods and alsofoods, rose fast. The largest part of the sudden increase in importsin 1964 appears to have been attributable to restocking, and thus tempo-rary. In 1965 and beyond that year, imports should rise at a more normalrate of 6 nercent per annum. Exports increased by only 7 percent in thatyear. As a result, the trade deficit of L6.4 million in 1963 rose to L21.1million in 1964, and with it the current account balance deteriorated froma surplus of L3.2 million in 1963 to a deficit of L12.1 million in 1964.This deficit was largely financed by an increased inflow of official long-term and private "short-term" capital. External reserves only fell by1,0.7 million during 1964.

Balance of Paym~ents Prospects

76. The high quality of Jamaica's financial management and thepresent balance of payments outlook suggest that Jamaica should not en-counter unmanageable balance of payments' problems in the next five yearsor so. Although the current account deficit is likely to increase sub-stantially - the mission's projections (cf. Appendix 4) indicate a doublingof the deficit by 1970 - these should be largely coverable by inflows onthe capital account. Unless inflows of official long-term capital do notmaterialize as projected, Jamaica's reserve position is likely to be un-changed from the already very high 1964 level.

77. During the next five years merchandise exports are likely torise by an annual 4.3 percent, from about L80 million in 1964 to b102million by 1970 (cf. Annexes 3 and 4). While exports of bauxite and alu-mina will increase substantially in this period (bauxite by 50 percent,alumina by 13 percent), exports of other products such as sugar and ba-nanas will probably increase only marginally, largely on account of un-favorable world market trends. Exports of citrus and industrial productsare likely to go up by about 10 percent annually because of the JamaicanGovernment's increased assistance to agriculture and its industrial incen-tives legislation. Merchandise imports, against the background of aprospective rate of growth in GDP by at least 5 percent should go up byan annual six percent. Imports of raw materials and capital goods willprobably grow faster than six percent, but imports of foods and manu-factured products should rise by substantially less as a result of en-couraging progress having been made so far in the substitution of domestic

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for imported agricultural and industrial products and the prospect of sub-stantial further substitution in the next five years. The rapid rise intourist earnings probably will offset the increase in outflows of foreignexchange on account of investment income payments (directly associatedwith the increase in bauxite exports) and merchardise freight and insurance.In addition, although not increasing because of hindrances to emigration,private remittances from Jamaicans living abroad should continue to financea substan-tial nortion of the country's deficit on goods and services.

'78. The current account deficit is thus likely to double to aboutL25 million by 1970, but the financing of this deficit should be manage-able. Over 40 percent of the deficit should be coverable by inflows ofprivate long-term capital associated with Jamaica's rapid prospectiveincrease in econom.ic activity. The rem.ainder is likely to be covered invarious wavs: by further private "short-term capital" inflows,part of which is expected to take the form of commercial bank borrowingin London, by further official general purpose borrowing in the prLvatecapital markets abroad and by project financing by official externallending agencies. However, if the present balance of payments diffi-culties in the United Kingdom and political uncertaint,ies in the Carib-bean area (which have an impact on the New York market) continue tolimit the Jamaican Government substantially in its approaches to theprivate capital mar'k:ets in these countries, the inflow of long-termcapital will fall short of the levels as projected in Appendix 4. Ifthis happens, the level of imports may have to be reduced and the pro-spective rapid rate of economic growth may prove not to be susuainable.

79. These comments are based on a projection of the current accountdeficit for the 1965-1970 period. While there are many uncertainties re-lating to Jamaica's balance of payments performance in the period beyond1970, there are grourds for expecting a reversal of the pattern of increas-ing current account deficit now projected for the near term. Jamaica'smerchandise exports and tourist earnings may well rise faster than inthe '965-1970 period. In addition, imports (that have been conservativelyestimated for the 1965-1970 period) could well increase less fast as im-port substitution increasingly slhows results. But if there is no presentthreat of urmanageable balance of payments difficulties, the developmentsin prospect call for, as the Jamaican Government clearly realizes, closeand continuing attention to policies affecting the balance of payments,and especially long term export prospects.

VI. ECONOMIC PROSPECTS AND CREEDITORTHINESS

80. Jamaica's growth prospects are good. The Jamaican Governmenthas created a very favorable environment for the development of privatesector activity in every main sector, particularly in agriculture, in-dustry, mining and tourism. This environment is now being further improved

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Jamaica's dynamic local and foreign private sector has respondedstrongly so far, and is engaged at present in carrying out and plan-ning a substantial further expansion in its activities. Private invest-ment, therefore, will increase rapidly in the years ahead. In particular,investments in industry, mining, construction and tourism are likely togo up markedly. Private interests are also carrying out major expansionprograms in ports, power and housing and planning an improvement in thecountry's telecommunications system.

81. The Jamaican Government has rightly undertaken to supportprivate activity by creating the necessary infrastructuLre, especiallyin the fields of agriculture, road construction, water supply and educa-tion. Present government plans call for a substantial increase in publicinvestment expenditures in the next three years ahead. The distributionof these investments is in accordance with the priority requirements ofthe econory. An examination of the well-placed and ranidly rising levelof total investment expenditures suggests that Jamaica's GDP should in-crease duiring the next few years at the minimum by an annual five percent.With an annual increase in the labor force between 2 and 3 percent unem-ployment should also be gradually reduced. While in the past decade, em-ployment has not grown in line with the increase in C-DP, the increasingefforts of the Jamaican Government to provide education and training shouldcontribute towards eliminating inadequacies in the levels of education andskills of the Jamaican population, which constitute the principal obstacleto increasing employment at present. But even so, it cannot be expectedthat employment in Jamaica will in the future grow in line with the in-crease in GDP.

82. Most of the impetus for economic growth in the years ahead willhave to come from an expansion of production for the internal market,especially in the fields of agriculture and industry. The prospects forthis expansion are good. With rising incomes, the demand for foodstuffsand manufactured goods can be expected to grow faster than the populationover the next five years. The high priority which the government is plac-ing on agricultural development, which is reflected in its investment planand related policy measures, give basis to expect that a significant expan-sion in agricultural production will be achieved in the 1965-1970 period.This should contribute towards dampening the recently rising level of im-ports of foodstuffs, increasing farmers' incomes, reducing migration tothe cities, and thus relieving unemployment and otber social pressures inthe cities. Under the present and prospective healthy investment climate,industrial production both for the domestic market as well as for exportsshould go up markedly. The construction industry, both residential andcommercial, will also make an important contribution to economic growthin the years ahead, following the implementation of the planned increasein house construction, and in line with the prospective rise in economicactivity. The planned expansion of the bauxite-alumina industry - whichwill double its capacity in the next ten years - should also be an impor-tant stimulant to economic growth.

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83. On June 30, 1965 Jamaica's external public debt repayable inforeign currency totalled US$36.7 million, of which US$13.1 million wasundisbursed. Annual service charees on this debt, which amount to US$7.2million in 1965, and rise to US$8.5 million by- 1970, drop from 2.5 per-cent of the country's earnings on current external account in 1965 to2.3 percent in 1970. (Debt service charges as a percentage only of Ja-maica's merchandise exports account for about 3 percent throughout theentire period). This relatively low level of debt charges reflects acommendable management by the Jamaican Governrment of Jamaica's externaldebt. Even if the Jamaican Government were to cover the entire publicinvestment financing gap :indicated earlier by external borrowing, servicecharges for the 1966-1970 period still would not exceed 5 percent of theprojected earnings on current account.

814. Jamaica's favorable growth prospects, the government's pruderitfinancial management, sound and imaginative development policies andsolid internal financing effort leads to the conclusion that Jamaicahas a very substantial margin for incurring additional foreign debt atconverntional terms.

APPENDIX 1

LIST OF TABLES

TIable No.

Public Debt

1 External Medium and Longterm Public Debt Outstanding2. Estimated Contractual Service Payments 1965-19793. Internal Funded Debt as of March 31, 19654. Internal Funded Guaranteed Debt as of M4arch 31, 1965

Population and National Accounts

5. Population Trends 1953-19646. Trends in Gross National and Domestic Product 1954-19647. Gross National and Domestic Product at Current Market

Prices 1954-19648. Sectorial Origin of the Gross Domest-c Product at Current

Factor Costs 1954-19649. Sectorial Origin of the Gross Domestic Product at Constant

Factor Costs 1954-196410. Percentage Sectorial Origin of the Gross Domestic Product

at Current Factor Costs 1954-196411. Agricultural Origin of the Gross Domestic Product at

Constant Factor Costs 1959-196412e Gross Domestic Fixed Capital Formation by Sectors 1956-196313. Financing of Gross Domestic Capital Formation 1956-196314. Gross Investment Ratio, Gross Savings Ratio, Resource Gap,

Incremental Capital Output Ratios and Incren;ental SavingsRatios 1956-1964

Production

15. Basic Data on the Bauxite-Alumina Industry 1953-196416. Production of Agricultural Commodities 1957-196417. Basic Data on the Livestock Industry 1959-196418. Production of Specified Manufactured Products 1953-196419. Summary Characteristics of Industries Operating Under

Incentive Laws 1963-196420. Some Indicators of Activity in the Construction Industry

1960-196421. Trends in Tourism 1955-June 196522. Electricity Generated by the Jamaica Public Service Company

1953-196423. Transport and Communications 1953-1964

Prices, Wages, and Monetary Developments

24. Indices of Retail Prices of Consumer Goods in Kingstonand Rural Areas 1956-1964

25. Index of Wages in Principal Sectors 1961-196326. Surpinary Accounts of the Banking System 1953-196427. Analysis of Bank Advances 1962-March 196528. Trends in Some Categories of Personal Savings and Summary

Indicators of Cperations of Life Insurance Companiesand Building Societies 1959-March 1965

29. Comparative Bank Rates and Tender Rates, Government SecurityYields and Selected Other Interest Rates 1960-1965

Public Finances

30e Central Government Current Revenues 1955-196631. Composition of Central Government Current Expenditures 1960-196632. Fiscal Operations of the Central Government 1960-196633. Estimated Gross Public Investment Expenditures 1960-1968

External Finances and Trade

34, Balance of Payments 1953-196435. External Current Account 1959-196436. Foreign Asset;s and Liabilities 1953-196437. Value of Principal Exports 1953-196438. Volume of Principal Exports 1953-196439. Value of Exports of Certain Manufactured Goods 1959-1964400 Imports by Major Categories 1953-196441. Imports of Foodstuffs 1960-196442. Terms of Tracle 1954-1963

TABLE 1

1/JAMAICA: EXTERNAL MEDIUM AND LONG-TERi4 PUBLIC DEBT6ffSTANDING INCLUDING U'iNDISBURSED AS -OF JUNE 30, 1965

Debt Repayable in Foreign Currency(In thousands of U.S. dollar equivalents)

Debt OutstandingJune 30, 1965

Item

Net of IncludingUndisbursed Undisbursed

TOTAIA EXTERNAL PUBLIC DEBT 73,588 86,709

2/Publicly-issued bonds 61,155 61,155

Privately-placed bonds 7,162 7,162

IBRD loans - 5,500

U.S. Government loans 679 8 300Export-Import Bank - 50AID 679 7,800

Loans from U.K. Government 4,592 4,592

i/ Debt with an original or extended maturity of one year or more.

2/ Net of accumulated sinking funds of $10,463,000.

Source: IBRD-Economics Department, Statistics Division.

TABLE 2

JAMAICA: ESTIMATED CONTRACTUAL SERVICE PAYMENTS ON EXTERNAL MLDIUM - AND LONGTERMPUBLIC DEBT OUTSTANDING INCLUDING UNDISBURSED AS OF JUTE 30, 1965 /

Debt Repayable in Foreign Currency(In thousands of U.S. dollar equivalents)

Payments during y6ar ~~~~~United States GovernmentDebt outstanding PaymePts during year Publicly Privately IBRD United_S_tates_Governmen United Kingdom

including 2/ Amorti- Interest Total Issued Placed loans Total Export-Import AID governmentundisbursed- zati on Bonds Bonds Bank loans

(begin. of period)

19652/ 86,709 2,952 4,216 7,169 6,063 501 24 71 7 64 5091966 84,859 3,194 5,027 8,221 6,779 501 85 346 47 299 5101967 81,084 3,225 5,033 8,258 6,728 501 136 382 77 305 5111968 77,148 3,294 5,031 8,325 6,676 501 187 453 74 379 5091969 72,987 3,193 4,988 8,181 6,585 501 238 455 71 384 403

1970 68,763 3,507 4,979 8,486 6,533 576 363 611 68 543 4031971 64,049 3,592 4,917 8,509 6,481 576 451 598 65 533 4031972 59,060 3,684 4,838 8,521 6,429 680 453 585 62 523 3741973 53,779 7,404 4,597 12,001 10,017 680 448 572 59 513 2841974 44,651 3,038 4,356 7,395 5,422 680 449 559 56 503 285

1975 39,759 5,897 4,172 10,069 8,111 680 449 547 54 493 2831976 31,8o4 3,771 3,998 7,768 5,844 680 453 509 26 483 2831977 25,762 2,o62 3,362 5,424 3,537 680 452 473 - 473 2831978 21,711 4,769 3,118 7,886 6,0o8 680 450 462 - 462 2851979 15,587 914 2,254 3,167 1,299 680 452 452 _ 452 284

1/ Includes service on all debt listed in Table 1.

2/ Net of accurmulated sinking funds of $10,463,000

2/ Amount outstanding is as of June 30, 1965; payments are for the entire year.

Source: IBRD, - Economics Department, Statistics Division.

TABIE 3

JAI4,%CA: INTERNAL FUNDED DEBT AS OF MARCH 31, 1965

(Debt Repayable in Jamaica Pounds)

Interest Year Amount Accumulated Annual RateTitle Rate Of Date of Maturity Out- Sinking Sinking Fund

% Issue standing Fund Contribution(E~) (;) (%)

Local Registered Stock 32 1940 October 1, 1965 200,000 64,354 10Local Registered Stock 3 1936 March 1, 1966 -150,000 169,007 2,7Local Registered Stock 54 1959 May 15, 1966 654,830 41,811 1.0Local Registered Stock 3 1947 December 1, 1966 303,900 287,777 12t1Local Registered Stock 4211955 Septemberl, 1967 600,000 75,666 10 2/Local Registered Stock 3 1947 November 1, 1967 197,710 24,243 2,0Local Registered Stock 51 1964 August 15, 1968 750,0°0 - 2.5Local Registered Stock 32 1948 November 1, 1968 621,210 413,059 9.2Local Registered Stock 6 1962 July 16, 1969 841,4.45 17,454 1.0Local Registered Stock 5t 1963 April 1, 1970 750,000 9,515 2.5Local Registered Stock 1964 April 1, 1970 750,000 - 2.5Local Registered Stock 1964 April 1, 1970 750,000 - 2.5Local Registered Stock 4-3A 1956 Septemberl, 1971 1,000,000 117,531 100 4/Local Registered Stock 6 1964 March 15, 1972 1,000,000 - 2e5Local Registered Stock 6 1960 July 15, 1975 1,520,000 65,490 1eOLocal Registered Stock 61 1962 March 30, 1976 1,000,000 26,281 110Local Registered Stock 5 1957 September 16,1977 816,330 158,616 1 0 5/Local Registered Stock 5-3/4 1959 May 15, 1981 620,310 40,132 1.0Local Registered Stock 6-1/2 1962-63 November 27, 1983 2,224,065 ) 55,326 1.0Local Registered Stock 6-1/2 1963 November 27, 1983 1,917,730 )Local Registered Stock 6-1/2 1963-64 August 1, 1984 2,219,850 23,253 1.0Local Registered Stock 6-1/2 1965 October 15, 1986 1,790,065 - 2o0Land Bonds 4z - 62 1956-65 April 1976 to

March 1985 935,0o0

TOTAL INTERNAL FUNDED DEBT 121,612,845 6/ ;i,589,515(see footnotes next page)

TABLE 3(Conttd) Page 2

1/ Not iiueluding supplemental annual sinking fund contributions of 3.0 per cent

2/ it"I " " " "i 1.0 per cent

3/ " " " " 2.4 per cent

/ " " " " 1 0 per cent

5/ " " " " 1.0 per cent

6/ Excluding perpetual annuities amounting to T77,416 and National Savings Bondsamounting to E 424,389.

Source: Government of Jamaica, Ministry of Finance

TABLE 4

JAMAICA: INTERNAL FUNDED GUARANTEED DEBT AS OF MARCH 31, 1965

Debt Repayable in Jamaica pounds

Interest Authorized Actually Year Year AmountGuarantee of Government Issued to: Rate to Guaranteed Contracted of final Outstanding

(%) Guarantee (T) maturity (;)(;)

The Kingston Gas Works 4 114,900 114,900 1889 1975 2,100

Various Educational and Civil 1Service Organizations 31 - 8 909,000- 909,000 1949-63 1985 702,617

Various Building Societies,Insurance Coirpanies and Housing 1/Development Companies 7 658,750- 325,269 1959-62 1982 193,426

Jamaica Railway Corporation 7 788,000 / 673,0co 1963 1967 473,000

Jamaica Broadcasting Corporation 6 500,000 450,000 19614 1973 450,000

Kirgston and St. Andrew Water -Commission 5.4 260,000 100,000 1964 1975 100, 000

Newi Kingston Hotel Limited 7 580,000 580,000 1961 1981 557,500

Total Internal Funded Guaranteed Debt ;2,478,643

1/ No limit specified in legislation, but each guarantee requires approval of the House of Representatives

Source: Government of Janaica, Ministry of Finance

TABLE 5

JAAICA: POPULATION TRENDS 1953-1964

1/Year Population,/ Natural Net Net Birth 2/ Death 2/ Rate of Rate of Rate of Net

(thousands) Increase Emigration Population Rate Rate Natural Emigration Population(thousands) (thousands) Increase (per (per Increase (per Increase

(thousands) ( 1000) 1000) (per 1000) 1000) (per 1000)

1953 1,417 35.7 4.3 31.4 34.4 104 24cO 3.0 22.21054 1,446 37.3 804 28.9 3503 10.7 24.6 5.8 20.01955 1,468 40.4 18.9 21.5 36.2 9.9 26.3 13.0 1)4.61956 1,494 43.5 17.6 25-9 37.2 9.4 27.8 lle8 17.4

1957 1,525 46.3 15.2 31.1 39.6 8.8 30.8 10.0 20.41958 1,565 47.8 8.2 39.6 39.0 9.1 29.9 5.2 25.31959 1,600 48.1 13.1 35.0 40.9 10.4 30.5 8.3 21.81960 1,639 54.1 30e3 23.8 42eO 8M8 3332 18.5 14D5

1961 1,652 5109 38.5 13.4 40.2 8.6 31.6 23 3 8.11962 1,676 52o1 28.7 23,4 40.3 8.9 31,4 17.2 14.01963 1,720 51.3 7.3 44.0 39.3 9.0 30.3 4.3 25.61964 3/ 1,762 55.8 13.5 42.3 39.8 7.7 32.1 7.7 24.0

1/ End of year

2/ 1953 - 1959 figures: Annual Abstract of Statistics, 1962, No. 22.

3/ Provisional

Source: 1953-1959 figures: Economic Survey Jamaica 1960, Government of Jamaica, 19621960-1964 figures: Economic Survey Jamaica 1964, Government of Jamaica, 1965and Staff estimates

TABLE 6

JAIAICA: TRENDS IN GROSS NATIONAL AND DOMESTIC PRODUCT 1954-1964

1954 1955 1956 1957 1958 1959 1959 1960 1961 1962 1963 1964

GROSS NATIONAL PRODUCT ATCURRENT MARKET PRICES 129.4 147.7 171.4 206.4 213.5 228.9 209a2 224.8 24044 249.9 267.4 280.7(millions of Jamaica pounds)Rate of Growth (%) - 14.2 16e0 20e4 3.5 7.2 - 7.5 7.0 3.1 7.0 5.0

GROSS DOMESTIC PRODUCT ATCURRENT MARKET PRICES 132.2 150.9 175.5 210.6 218.9 236.O 216X3 235.0 251.7 260.9 277.2 292.4(millions of Jamaica pounds)

Rate of Growth (%) - 14.2 16.3 20.0 3.9 7-8 - 8=7 7.1 3.6 6.2 5.5GROSS DONESTIC PRODUCT ATCURRENT FACTOR -COSTS 119.7 136.4 158.5 191.9 198.7 212.1 198.2 215*4 230.7 239.2 254.0 274.7(millions of Jamaica pounds)Rate of Growth (%) - 14.o 16.2 21.0 0.4 6,7 - 8.7 7.1 3.7 6.2 8.2

GROSS DOMESTIC PROLUCT ATCONSTANT FACTOR COSTS 130.4 143.5 158.5 181.5 184.0 195-0 203.5 215.3 223.8 228.2 233.8 252.1(millions of Jamaica pounds)

Rate of Growth (%) - 10.0 10.5 1145 1.4 6.O - 5.8 3.9 2.0 2.5 7.8PER CAPITA GROSS NATIONALPRODUCT AT CURRENT MARKETPRICES

In Jamaica pounds 89 101 114 135 137 143 131 137 146 149 155 159In U.S. dollars 249 283 319 378 384 400 367 384 409 417 436 445

Rate of Growth (%) - 13.7 12.7 18.5 1.6 4*2 - 4.6 6.5 200 4.6 2.0

1/ 1959 - 1964 figures are not entirely comparable to 1954 - 1959 figures

Source: Tables 7, 8, 9.

TT3;LZ 7

J:~, CLx ~GflO"3:; >3~TI0UIiL "--1 DGii,,~2iC £XYC TCL.1,i --SXL 7` ±Ci1 12cL194-12(r41iions of Jar.ieca pouncs)

1954 1955 1956 1957 195l' 1959 1)59 1960 1961 1962' 1963% 19 64a/

?tivate Consuniption 100.6 121.0 131.3 145.; 155.3 169.6 161.1 173.2 181 .. 190.4 200.3 216.2Public Consuzption 11.3 13.2 16.2 1;.0 19.1 1.'5l.9 19.7 21.7 214.3 27.3 29.2 31.8

Totnil Consurmtion 117.9 134.2 17.Ja5 1:)3 S 17A.7 191.7 180.8 124., 205.k`0 217.7 229.5 L8 .0

Gros:: Pi-xed Capital Fonrrt:-ons 17.3 21.5 3 .0 52.1 47.1; 4.1 45.6 49.3 40.3 45.3 45.8Chann, in ;nvontory 1.5 3.1- 5.2' 3.5 5.0 4.7 2.3 4.1 2.9 5.2

Total C a)ial Fo:.matins 10.S 24.6 /I.: 57. 50.9 51.1 50.3 1.5 5 '2.k4 9.2 51.0 58.0

,xportb of Goods anc Servi.ces 37.0 41.0 45.9 60.2 61.2 64.4 72.9 91.6 93 95.6 108 .2 115.5Loss: opor'C'fO Goods a:ndServicos 44.3 52.1 63.7 75.0 73.3 783.3 95.9 112.9 114.3 114.5 118.7 140.83Stttical JJiLSCipancy _ - - - -t 1.1 - 0.4 - 1.5 1.9 - 2.3

GC2;X- > ';liO QL l--Q'DUCT.:-T U :A'. , . -.-i'IC3EC .. 129D.4 147.7 17l-2CG.1 5 2 2 2L4 2 24C./2 'L4.9 26°7.4 2&O.7

V;ct ;Incorm Trans2c:.s broad 1.L 3.2 4.1 4.* 5.4 7.1 7.1 10.2 13.3 11.C 9. G) 11.7

GldW :A;' i h i'iAC 1-iDCu.. LJ 1iC. .;6 132.2 150.9 17j' 210 Z ?19 236.0 21r02 7 2'0.9 277.2 202

~/ 1959-1964 fi3mures are not entirely cormparable to 1954-1959 figures.2/ ProvisionalSoixcC5: iT:stio.LIl f.Ocouo1. 950, 1959% Tr.;mer-4*nt o, -statistics.

2coriornic I;:vcoy Ja c-rauct o964, Central ?i t.atistics.;:R'conorifc Survey Jamd:ca,, 1964, Cantrcl Paaning, unit.

Ti'DL::' 8

JAI-ICA: SMCTCRIPL 01-aGII CUT T-fl G"033 -D0-:23TC 17)OWFUCT AT CUIThZ}AT FACrOR CC(TS 193/,-1961 '(rzilliors o_ Jc? cn -pounds)

1954 1955 1953 1957 195' 1?59 1959 19(0 1961 1962 1963a/ 1964?/

;A3ricul-Lure, 7'oLwo;ctry and_ i5hint 74. 0 25.? 25.; 26.6 '5 C 2u.2 26.3 26.0 27.7 28.7 34.2 35.4

inin,, t uarr5ring anc1;-e il:inE, 4. 6.5 2.!,7 1G., 1 '7.5 15.6 1'. 2'0. 22.)1 23.1 22.8 25.5

.nur acturinz 1n..I 18.3 20.7 24.1 24.9 27.9 27.9 30.1 33.4 32.2 36.7 39.3Cons;,ruction anC :lstLllation 10.4 12.9 20. 2 2.1 24.5 24.9 24;.2 25.7 2Q;.5 27.2 26.6 30.4.lactricity, Gas aic. k r 0.9 1.C 1. 1.7 1.9 2. 2.1 2.7 2.9 3.1 3.5

Co t..nIca2 iOnS on. 9.I 10.5 12., 12.L 13.9 15.2 1.:.7 6.5 19.2 1.1 20.;aStributivo Tr<3.eo .0.1 2. 25.7 31.9 33.3 35.2 35.? 38.?) 3 .2 3L.5 40.1 43.6zn ncia1 Institutions /j.3 5.1 7.4 9.0 11.7 13.0 7.5 7.4 c9.5 9.' 10.1 10.3

oC1ners11ip of Dwe11invs 5.7 4 .0 6.2 6.4 $,.5 3.§ 3. ' 5.7 7.5 6.0 f.6 9.1Fu bici inia-tration 7.5 9.0 1T.3 12,4 13.1 15.4 12.1 13.9 14. 17.0 1$.- 20.31iscellnmeous 3crvicos 25.9 16,.3 20 . 2.2- 25. - 2 7. 25.4 27. 29.7 31. 34.7 37.1

'.'3 D)C;;2-SSIC i£.OD)uCTLT '2 ( i, .T j? CI'O0. CCS3TS 119.7 1: /.h 1 1..5 191.9 16 _ 7 12.1 198.? -17.4 07 239. 254.0 ?7L.7

iPlus: Ineircet 'faxes ( 12.5 1,.5 17.0 lr.7 20.2 2 5 19. ?1.0 '.4, 23 .5 24,. ) 17.7,.,lus: :-,uisic'ii1s ( .5 1.3 1.3 1.0 1.4)

AT1£ CU..±U27j.' i,; !-. ICS t132.2 150.(,9 175;.7 210., 216.9 236.0 2 1 ." 23'.1 251.6 290.9 277.2v_ 292.4

1J 19:s59-1954 fi uros a -iot 3ntir31y co:aipaz.blc to 1954-1o59 Zi;u;s./ ±±'rovisional

.ourcc: zat.o:laa I ccounU- 1'59, 139, Laartri:11Ct ao ; ;tci stics.!atioia1 : nCicomra ai J.'roduct- 1959-1l963, lcpa,rtnvaC of St.:.tis'cics.-'cononic Survey Jamaica, l9c64, Cont-:- n1anning Uniit.

TABLE 9

JA11AICA: SECTORIAL ORIGIN OF TnE GROSS DINESTIC PRODUCT AT CONSTANT FACTOR COSTS 1954 - 1964

(millions of Jamaica pounds)

1954 1955 1956 1957 1958 1959 1959 1960 1961 1962 1963 1964

Agriculture, Forestry andFishing 25-3 26c5 25.7 26.4 26.8 29.4 25.7 26.0 26.0 25.8 26.8 28.7

Mining, Quarrying andRegining 5.9 7.0 8.7 14J3 14.7 14.4 15.9 20.8 22.5 23.2 23.0 24.7Manufacturing 16.9 19o0 20.7 23.7 23.8 26.6 31.0 30.1 32.5 33.5 36.1 39.0Construction and Installation 11.1 14.3 20.2 23.1 21.9 22.2 23.5 25.7 25.0 24.3 2494 27.7Electricity, Gas and Water 1.0 1ol 1.2 1.4 1.5 1.7 2.2 2.3 2.7 2.9 3.2 3.6Transportation, Storage and

Communications 8.7 9.8 1065 12.4 12.3 12.7 15.6 16.7 19.1 20.6 20.7 22.9Distributive Trades 22.3 24.3 25.7 30.7 31.8 34.0 35.5 38.9 36.7 35.9 35.5 3749Financial Institutions 6.4 7.2 7.4 8.3 9.3 9.8 7.7 7.4 8.9 8.2 7.9 8.5Ownership of Dwellings 507 6.0 6.2 6.2 6.1 5.8 6.9 6.8 6.9 6.9 7.1 7.4Public Administration 9.7 9o2 11.3 12.4 12.4 13.7 12.0 13.2 14.2 15.8 17.0 17.3Miscellaneous Services 17.4 19.2 20.9 22.5 23c5 24.8 27.4 27.5 29.9 31.1 32.1 34.4

GROSS DOMESTIC PRODUCTAT CONSTAINT FACTOR COSTS 1304 143.6 158.5 18165 18480 195.0 203.5 215.3 223.8 228.2 233.8 252.1

1/ 1959-1964 figures are not entirely comparable to 1954t-1959 figures1954-1959 figures are based on 1956 prices; 1959-1964 figures have been revised, and are expressed in 1960 prices.

Source: National Accounts 1958, 1959, Department of Statistics.National Income and Product 1959-1963, Department of Statistics.Unpublished Data, Department of Statistics.

TABLE 101/

JAMAICA: PERCENUAGE SLCTORIAL ORIGIN OF THE GROSS D07HESTIC PRODUCT AT CURRENT FACTOR COSTS 1954-1964

1954 1955 1956 1957 1958 1959 1959 1960 1961 1962 1963 1964

GROSS DOMESTIC PRODUCT ATCURREN-T FACTOR COSTS 119*7 136.4 158.5 191.9 198.7 212.1 198.2 215.4 230.7 239.2 254.0 274.7(millions of Jamaica pounds)

(Pe r c e n t a g e o f T o t a l)Agriculture, Forestry and

Fishing 20.1 19.2 16.2 13.8 13e5 13.3 13.3 12.1 12.0 12.0 13.4 12.9Mining, Quarrying andRefining 4.0 4.8 5.5 8.8 8.8 7-9 8.2 9.7 9.6 9.7 9.0 9.3

Manufacturing 14.0 13.4 13.1 12.7 12.5 13.2 14.1 14.0 14.5 13.9 14.4 14.3Construction and Installation 8.7 9.5 12.7 13.6 12.3 11.8 12.2 12.0 11.5 11.4 10.6 11.1Electricity, Gas and Water 0.8 0,7 0.8 0.9 1.0 1.0 1.0 1.0 1.2 1.2 1.2 1.3Transportation, Storage and

Communications 6.9 7.0 6.6 6.4 6.4 6.6 7.7 7.8 8.0 8.0 7.1 7.4Distributive Trades 16.8 16.8 16.2 16.6 16.8 16.9 17.7 18x0 16.6 16.1 15.8 15.9Financial Institutions 3.6 3.7 4.7 4.7 5.9 6.1 3.8 3.4 4.1 4.1 4.0 3e7Ownership of aDellings 4.8 4.4 3-9 303 3.3 2.9 3.1 3.1 3.2 3.3 3.4 3.3Public Administration 6.3 6.6 7.1 6.5 6.6 7a3 6.o 6.1 6.4 7.1 7.4 7.4Miscellaneous Services 14.1 13,8 13.2 12.6 12.9 13.0 12.9 12.8 12.9 13.2 13.7 13.5

TCTAL 100l 0 100*0 10000 10000 100.0 10000 100.0 l00Oo 100.0 100l 0 100.0 100.0

1/ 1959 - 1964 figures are not entirely comparable to 1954-1959 figures

Source: National Accounts 1958, 1959, Department of StatisticslNational Income and Product 1959 - 1963, Department of Statistics.

Economic Survey, Jamaica 1964, Central Planning Unit.

TABLE 11

JAMAICA: AGRICULTURAL ORIGIN OF THE GROSS DOMESTIC PRODUCT ATCONSTANT FACTOR COSTS 1959-1964

(millions of Jamaica pounds - 1960 prices)

1959 1960 1961 1962 1963 1964

TOTAL AGRICUILURE, FORESTRY AND FISHING 25.7 26.0 26.0 25.8 26A8 28.7

Export Agriculture 10.4 11.2 10.9 10.7 11.3 11.6Sugar Cane (6.5) (7e3) (7.4) (7.0) (7.6) (7.8)Other Exports (4O0) (3.8) (3,5) (3.7) (3e7) (3.8)

Domestic Agriculture 8.5 8.1 7.8 7.7 8.2 9.1Root Crops (3-5) (3.1) (2.6) (2.8) (2.8) (3.0)Other Products (5.0) (5cl) (5.2) (4.9) (5.4) (6.2)

Livestock and Hunting 4.2 426 4.7 4.9 5.4Fishing 1.3 192 14 1.5 1.3 1.4Forestry 1.2 1.2 1.2 1.2 1.1 1.2

Source: National Income and Product, 1965. Department of Statistics and Unpublished Informationreleased by the Department of Sta,tistics.

TABLE 12

JAMAICA: GROSS DONESTIC FIXED CAPITAL FORMATION BY SECTORS 1956-1963

(millions of Jamaica pounds, current values)

1956 1957 1958 1959 1959 1960 1961 1962 1963

Agriculture, Forestry andFishing 3.5 4.9 4.2 4.6 5.6 6.n 5 5 14.8 4.8

Milling, Quarrying and 2/ 2/Refining 11.6 10.7 4.6 1.6 1.6 1.5 1.3 6.3 10.5

Manufacturing 4.1 4.5 5.5 5.0 7.7 7-5 8.8 6.5 5.1Electricity, Gas and Water 0.6 0G7 1.4 1.8 1.8 1.7 2.2 1.3 0.8Public Administration 208 5.6 4.9 5.6 5.6 5.3 505 5.0 4.5Residential Dwellings 4.0 5.3 6.4 7.6 7.2 8.6 703 6.5 6.2Other 12.2 2004 20.4 19.9 18.6 18.7 17.8 16e0 13e9

of which:Construction and Installation - - - 2.1 2o2 2,2 2 1 2elTransportation, Storage and

Conmmiunications - - - - 5.7 6.0 5.8 5.7 5.0Distributive Trades - - - - 602 8.5 7.1 5.7 4.1Financial Institutions - - - 0.5 0.3 08 0.6 007Miscellaneous Services - - - - 1.6 1.7 1.9 1.9 2,0

TOTAL 38.8 52.1 47.4 46.1 45.6 49e3 48.3 L&603 45.8

1/ 1959 - 1964 figures are not entirely comparable to 1954-1959 figures.

2/ Includes estimates for oil refining totalling e 4,5 million for the two years.

Source: National Accounts 1958,1959, Department of Statistics.Niational Income and Product 1959-1963, Department of Statistics.

TABLE 13

JALMAICA: FINANCING OF GROSS DCMESTIC CAPITAL FOR3MATION 1956-1963 1,(millions of Jamaica pounds, current values)

1956 1957 1958 1959 1959 1960 1961 1962 1963

GROSS DOMESTIC FIXED CAPITALFORMATION 38.8 52.1 47.4 46.1 4506 49°3 48.3 46.3 45.8

CHANGE IN INVENTORY 2.8 5.2 3.5 5.0 4X7 2.3 4-1 2.9 5.2

GROSS DOMESTIC CAPIITAL FORMATION 41.6 57.3 5o°9 51.1 5o03 51,6 52.4 49.2 51.0

Financed by:

GROSS DOMESTIC SAVINGS 24.7 4009 36.8 35,6 32,,7 35e3 40.5 38.4 44.7

Depreciation 1006 14.1 15.0 15.8 14n6 16.0 17.5 18.2 19.8

Net Savings 14.2 26.8 21.9 19.7 18.1 19.3 23.0 20.2 24.9Savings of Corporations 4.9 7cO 7.5 81 9.9 10.1 10.7 10.5 12.9Personal Savings 6.0 12-7 8.0 5.1 2.6 3.8 6.4 5.4 8.8Public Savings 3.3 7.1 6.4 6.5 5.6 5.4 5.9 4.3 3.2

NET BORROWING FROM ABROAD 16.9 16.4 1400 15e2 18.7 15.9 104 12.7 3.6

STATISTICAL DISCREPANCY - - 0.1 0.3 - 1.1 04 1.5 - 1.9 2.6

I/ 1954 - 1959 figures are not entir'ely comparable to 1959-1963 figures.

Source: National Income 1958, 1959, Department of StatisticsNational Income and Product 1959-1963, Department of Statistics.

TABLE 14

JAMAICA: GROSS INVEESTMENT RATIO. GROSS SAVINGS RATIO. RESOURCE GAP, INCREMENTAL CAPITAL OUTPUT RATIOS AND INCREMENTAL SAVINGS RATIO 1956-1964 1/

1956 1957 1958 1959 1959 1960 1961 1962 1963 1964

1. GROSS DOMESTIC PRCDUCT' AT 'CURRENT 1AARKET PRICES 175.5 210.6 218.9 236.0 216.3 235.0 251,7 260.9 277.2 292.4(millions of Jamaica pounds)

2. GROSS DOMESTIC CAPITAL FORMATION(millions of Jamaica pounds) 41.6 57.3 50.9 51.1 50.3 51.6 52.4 49.2 51.0 58.o

3* GROSS DOMESTIC SAVINGS(m111ions Of JamaiCa pounds) 24r7 40.9 36.8 35.6 32.7 35,3 40.5 38.4 44.7 45.8

4. tET BOCRROWING FROM ABROAD 16.9 1604 14,O 15.2 18.7 15.9 1094 12.7 3,6 12,2(mi11ioIr of Jaimiaica pounds)

5. RATE OF GROWTH OF THE GROSSDOMESTIC PRODUCT (%) 1603 20,0 3,9 7e8 - 8.7 7.1 3.6 6.2 5.5

6. jROSS INVESTMENT RATIO (%) 23.7 27.2 23.3 21.7 23.3 22.0 20.8 18.9 18.4 19.8( 2 I

7. GROSS SAVINGS RATIO (%) 14.1 19.4 16e8 15.1 15.1 15-1 16.1 14.7 16.1 15.7( 3_ 1 )

8. RESOURCE GAP AS A PERCENTAGE OFTHE GROSS DOMESTIC PRODUCT 9.6 7.8 6.5 6.6 8.2 6.9 4,7 4.2 203 4.1

(= 4:1)9. RESOURCE GAP AS A PERCENTAGE

OF GROSS DOMESTIC CAPITAL 40e6 28.6 27.5 29.7 37.2 30.9 19.8 2508 701 21,0FORMATION ( = 4 ; 2 )

10 INCREEliTAL CAPITAL-OUT PUTRATIO (one-year lag assumned) .. 1Q2 700 3e0 - 2.7 3.1 5,8 3.0 303

11.XNCREMENTAL SAVINGS RATIO-/ ____ 18.0 220 23.5-

1/ 1959-1964 figures are not entirely comparable to 1956-1959 figures. Source: Table o-12 and Staff Estimates.Z/ End year of period over begin year.

TABLE 15

JAMAICA; BASIC DATA OM- THE BAUXITE-ALUMINA INDUSTRY 1]953-1964

1953 1955 1957 1959 1960 1961 1962 1963 1964

Volume of Production ('000 tons)Bauxite 1,220 2,666 4,634 5,181 5,779 6,541 7,519 6,903 7,811Alumina 193 436 418 651 688 663 710 745

Volume of Exports ('000 tons)Bauxite 1,253 2,172 3,641 4,197 4,148 4,975 5,987 5,162 5,967Alumina - 184 436 399 665 703 628 725 768

Value of Exports (thousands of US$) 7,742 24,270 60,127 57,182 77,059 83,843 84,446 82,603 94,774of which:Bauxite 7,742 10,875 26,776 30,845 30,484 36,565 44,019 37,940 43,859Alumina 2/ 13,395 33,351 26,337 46,575 47,278 40,440 44,663 50,915 4

Price of Aluminunm(US ' per lb.) .. .. 25.0 2206 24.5

Disbursements of the Bauxite -Alumina Indust in Jamaica .. O. .0 9,691 9i381 12,127 15,076 15,237 15,437(thousands of Jamaica pounds)a) Wages and Salaries .. .° .0 2,960 3,309 3,447 4 094 4,000 4,250b) Other Expenditures of which: .. .. 2,92 22847 674,562

Investment Expenditures .. .. 1,22& 795 1,948 3,6959Materials and Supplies .. .. 1,002 832 1,062 1,244 1,123 )Services *8 .. 389 508 569 254 291 ) 2,588Payments to Railway Corporation O- 275 395 421 437 516 )

c) Payments to Government 5/ e 3,839 3,624 5,833 7,099 5,612 6,625of which:Royalties o . 723 744 855 919 869 1,015Income Taxes X. Q. . 3,116 2,880 4,978 6,180 4,743 5,610

Employment Bauxite - Alumina Industry *. .. 5,893 b,683 4,659 5 444 5,762 5,000of which: Mining and Related Operations.. 3,9105 2,990 3 3,720 57.

Construction d C 6 -i * 669 69 89 654 826Agriculture and Other .. we co 2,119 1,577 1,232 1,421 1,312Prospecting co e 4 7 132 109 67

1/ Preliminary 3/ Average 1956-1962 urce: EcobMFT STuvey Jamaica 1962-J-964, Central Planning2/ Domestic unalloyed ingot / December 1964 Unit. Annual abstract of St,atistics, 1961-1963,Dept.

99.5%, at New York § / Fiscal y6ar beginning April 1. of Statistics. IDRD Econormic Depta - Stat-istics Div*

16

dJ .J5C: rOiCL'LI0 '. KTLC-'ULi-tIK CGiiDG GUii.DTIi 9L157-1961L

U±- i t ofquantity 1957 195r19 1960 1951 1962 1963 19G4

:;u£gar 1000 tons 359 335 376 424 440 433 48.4 4743anana, 100.000 ste ms 145 140 140 145 145 155 156 165

Cof.O bags of tU 1;. :13.4o± 14.951 1 .909 1l.4Jt 10.313 12..9° 12.738 13.478oco ./ 1000 lbs. . . 760 .03'. 3.5`1 2.430 4.919 2.7'9 3.230

r l&o' lOOQ1000 lbs .. 5.15' 3.7U5 7.139 '.51;' 5. )$3 5.647 4.970

.. n,e±4J 1000 lOOGbiDS. .. io9<31 1.073 1.711 1.311 1.01r9 .1 1.427tons 5.500 .. 5.00 2.000 3.000 3.500 3.,00 3.CO

Corn tons 3.OO ., 3.500 3.90 3..000 0 3.370 4.000Copra tons 10.383 . 1').178 1.',757 13.439 1. 46',3 15.139 16.337Pot toes tons 4.241 '6.534 9.531 7 7.81- ;.80 10.3`7

C,r nu es 1000 boxecs 1.O(C .. 1.450 1.350 1.550 1.575 1. 070 1.7"0Gralmc fruits 1000 bo. es 'S80 .. 730 733 733 906 1.040 960;ilaT l 10OC quarts 3-).0 3?.800 33.092 37.>0 33.202 33.60 33.20 33.762

1J f;xpor ts .

* ource: -cono--n c S i vyvoy Ju2zzi ca 1°G4, Ceintr;-.l elis Uni tUnpublished .Datv. r 1clasod by tlio . s y ol.' f.,-,ricultu:re .-ar Lanc's.

JAiTiv±Co: m :ci. I JJD'L'.O Till', LLD R3C5' j 'vU1E 1959-19:4

(,liou.sands lb5)

2stimated1959 1960 1961 196.2 1063 1c,964/k 1966

1. f ro(:uction

Cattlo 25,939 26,G66 30,633 2.9,1o0 29,266 30,400 29/,500Pigs3 9,104 ,<,23 7,:1C 3,622 2,GI, 1 7,000 9,200Goc.ts 6,016 5,'601 5,564 5,:,,G 5,137 5,000 5,000

-he^p 140 154 134 130 110*oultry -,600 _ / _.20a 10.50 13 .dO0

Tote'Jl all i,.e-ts: 43,66'9 4, ., 0, 1o3 1 51,20 51,40.>3 52,/900 5.,7CO

2. Ir:xports

e3f' anCld Veal 3,434 2,429 1, i73 3,356 49,L'00 Is,5 *1;utton, Lv.Pb 66s 751 794 o72 740 1,015

Pork 320 330 120 105 1 56Poutltry Nleat 2, 022 1 ,91 1 ,770 , 73!;. ,56'i ,3,0.O'.,l2rl Nieat 1,I3 1,592 1 ,90 2,5&E2 3,319 5,111.'ouJl,lry, livo (;ioOOO) 1. _ 1.030 405 35 4 , ..

Tot.l -Nc;t Iniports 9,205 6,59:3 6;,L4.7 9,655 12,427 1$',170 .,c000

3. TotaJl 1eat Conisu,Otion. 53,9354 53,037 5G,610 0,-57 ; '-3,30 69,070 ; 0,700

4. l eait '.ports as a rjercen-tCa-eofI ,eat; Consumi3tion 15.4- 12.4 11.4 1,.9 19.5 23.4 29.7

5, W!11,1,.- o:C '.-O-t, ir 2orts. -000 1, 935 1 ,77 1,771 2,150 .,413 3,149 1 r700

S/ : -. irJti nar2 ource: l irnistry of' A!gricUltu.rc and' L.ads, tUnpulblished Dact4* cor.o>-ic Suxrvey of Jaxnaica, 196;2 andl 1964.

TABLE 18

JAiMIICA: PRODUCTIOA Qi' SRICf1ID MOiUrCUiZ PRODUCTS 1@93 49&;

Unlit Of;: uantity 1953 1955 1957 1959 1960 1961 1962 19.'3 19,64,

Sugar loco -oils 330 397 373 37t6 424 4140 433 434 474ULum anc! Alcohol 1000 liq....:ls. .1404 1541 2974 29o 7 1 37 2064 14'Yr 20141 2569

1000 liq.-als. ., 19'3 18322 21069 2.5543 26742 23177 24290 24727Conent 1000 tons 99 107 14,2 194. 209 212 197 198 277ihlurana 1000 tons - 193 436 41O 651 63e3 663 710 745

:extilo5 1000 yards 494/52/ 4555 7110 7353 6997 7435 6727 5894 7500

Beer 1000 lio.ga1s. 1553 2009 23/4l 3029 3361 3908 /4495 4015 4773Carbonatod Bevora-es 1000 liq. -1s .. *. * 5 642 5750 62976 644 7176 8891condensed 1dlk 1000 1;)0. 129, 11153 20003 2C3/13 3021$ 3'257 33524 31659 35130Ccnn1d Fruit 1000 1V S. .. . 0322 12216 16039 1572') 1C'69 I1?2091;'ruit Juices 1COO as. *. 930 1557 1156 1353 1701 1333_ssmntial Oils 1000 lbs. .. * * 192 210 234 252 211 181

Cigarettas vl 11ion 540 637 784 761 694 727 676 776 1002Cigars m111ion 20 19 17 22 13 16 22 23 23liotor Spirits rall1on -nls. - - - - - - - - 39Kerosene Aillion gals. - - - - - - - - 19Gas, Diesel ann, Fuel Oils 1S .tliion -als. - - - - - - - - 173Other I3ro1C mO Procucts Li11ion gals. - - - - - - - - 7

Soap tons 53 6r 53D10 7418 7551 73C0V 7846 6030 7D66 7300Copra 1000 tons 5 10 11 12 15 15 16 15 16Corrnmcal 1000 lbS. 99`40 311 15144- 17929 15195 16855 1'.137 18008 19033T'Jdiblo Oils 1000 liq.gcls. £65 11`5 1377 1750 17V` 1560 1705 1794 2065. diLle fats tons *. .. 3064 3335 2937 3150 3413' 3/65

1/ ri-ovisionalj/ *Slnls figrure

Source: EcononLc Ourveys Jau.aica 1962-1064, Contr :l Planning Unit.-Annual . bstract oi 'sta-tistics 1961-19,64, . cpartment of 3ta 1iStics.Report and. Stotement of ,Accoumts for thle year cnoed 31 Dece,n5oer 1964, Mank of Jamaica.

J!CA: ;31,1U-LA11Y ClUARNCGRTSTIC5 Oj I DllSTDRT& 0PEF,-VTIi!G UlIDI2.R IPCENTIVr:s ILFWS('housand's oF Ja,ar ca pounds)

p3iploymnt ;sX01'CIL LCOAL SAI.) 2.'CJ-T S.2.L',E]3 CT; L .' . Averageend per ;.nnual Pay

717DU3TRY G.'OUP 1964 (no.) 1963 1964 1963 1964 1963 1964 Total \/orkerr(L) perEm-ployce (I.)

Cheritcals 295 1U2 209 914 1.346 147 173 1.242 4.210 710

I.Tonl-ietallC cc nerals 631 173 191 US6 194 56 76 1.045 1.660 300

Vct.al Products 472 12 11 871 1e362 11 15 492 le.)0 3SQ

Plastic Products 114 27 30 139 167 21 27 161 1.410 330

Containcrs and PackagingUateriols 1.001 391 +94 1.858 2.255 120 176 2.152 2.150 490

Llectrical Froducts 147 32 64 165 242 .eglible 15 130 880 440

Clothing 2.755 405 470 ;il iTil 2.258 2.599 375 140 170

Loath3r Products 705 60 73 1il iUl 301 322 118 170 100

isceflaneous i-anufacturers 2.113 632 803 1.350 7 73 993 2.161 1.02-0 3g

TU0'JL 8.253 2.023 2.531 5.415 7.32G 3.652 4.396 7. 7O 950 310

Source: Jamaica Ineustrial Developr,ment Corporation and Sta' Estiretes.

T2312 20

3 ;. .ICA: 3,01 I-:i .C;'X.TOIC._ ' C'CTIVITY TFE C. C SC'C9OR lc60-1Q6.

1960 7 °1]. 1962 1933 1S4.

Local 3ales of Ca-ent (1000 tois) 197 194 17G 1'. 225

ILmport.i of Cons ,ruction. a;,mrXia1s (1000 1,) 642'9 3567 576 7:70

llous's _,v-Llt undor Sche-iisCorerc(' by iiortr&age Insuirnce (no.) Slo 13?, 721 1/ 401/

Priv.ate !,;uilL(in,; C omp1 ;ed

8esi/ )11i;; al (no. ) 720 345 331 194. X 475Cor,narcial an(e Industri al (no.) 12, 52' 5 59 65

Aujicings Cor-mletuc' underDaepr.rt:tant of housinC rO -ojc`s: (no.) .157-

OlvyiRN - VOccUOied 3 chcrno .. 3 ,5.Lnc!i ,_nt flousin..

1'n-ir11 llousing .. .. .. 570 906.ur.l Govt. Iiousin.7 3cheoic .. .. 24C 213

Slumi Cleaorance . 03 327Ot,h¢r 100 72

1/ D. occenb-r 1964it, 395 units waro neaa co: z Ulon, no.r!i.r- par- o. a 1.091 Unl 'ms' housin, schema.:/ i1t ;?ecamber 1934 10005 housce wure ne-riln co lpl:tion.

S ouicco: -:cono!ic ")ulrvcy Jmaneica 1964, Cc1nrt. ?-lanlinrg Uni.t

TA1DiJi 21

J.: A._ICI.: T. :v;i.r I' TCUmu3I: 1955 - J1u 3 1965

January- January-1955 1957 1959 1960 19G1 1962 1963 1964 June June

1964 1265~

TOU?.IST A -IUVUiS:TC'T'kL (1000) 122 16 191 227 2 207 2O2 227 11164

Lon:,-stay!/ 45 59 72 80 76 79 81 97 49 0231lort-stay 77 102 119 1)47 1l.9 1. 121 130 70 S

TOflUI3T ACCOGOPATIG.I,!

Yotal 3ed Capacity 3300 4200 5,000 !L4O 6750 7471 7563 7512 .. ofIur.blr of lNotel; 53 3 62 66 67 73 75 70 .. .. * IuEb.er of 2oesort Cottac.;zs

anC Guest houses 123 147 137 13S 190 1G3 103 .. .. ..

TCU I :,T J J. I Tl--b D(T;llion of Jai"Aica pound3) 5.4 / 5.C 10.0 14.4, 14.6 13.1 13.5 15.6 6.32/ 8.62/

Over 3 days2/ 19562/ Jalnuary - i.ay

Source: Jconomx c Zurvey Jaiz:Ca 1964, Contr.rg P1;nnin Unit.The Balance of iPayLiouts oi Jai&aica, 159-1/60v, and 1961, Dep.rtrment of Statistics..Oview o., ,conor .c Conditions iiay-June 1965, 13ank of Ja3eica.

Unpuiiliohad -. nfri.iation released by the Jarvaica Tourist Bovd.

T23i.3J 2 2

JAICAG: EIECTRICITY GTIIER?LYAD BY BHE JiNlICA PU3LIC S-RVIC"O CULiPAIN 12(raillion K ZH)

,lectricity S_l Distib_ s _Copany LossesYear Gcnerated Total Ilesioential h gricul- Cornir-rciaal Industrial PuLoiic Street Use in

Sales tural Authorities Ligh>'ting Tran,.Tis-

1953 108.3 91.4 18.9 25.7 18.7 21.8 4.4 1.9 0.6 16.31954 118.4 98.4 21.0 24.3 21.5 25.6 4.3 1.2 0.7 18.61955 135.1 112,1 25.3 26.8 25.6 28.0 4.4 2.0 1.2 21.71956 162.c 131.8 26.3 37.2 30.2 29.6 6.1 2-4 0.9 30.2

1957 192.0 159.7 32.1 43.3 35.9 37.7 7.7 3.0 0.9 31.41958 208.0 173.4 37.4 39.4 42.2 42.3 9.9 2.9 1.0 33.61959 245.0 207.9 44.9 48.5 51.9 48.2 11.0 3.4 1.0 36.11960 256.5 214.7 560.5 34.7 61.2 4/9.2 9.3 3.8 1.1 40.8

Conmmercial and Coranerciol andIndustrial Industrial

1961 305.2 258.9 65.7 136.3 42.4 1109 4.1 1.5 43.41962 332.1 284.4 72.0 150.9 46.3 12.0 4.3 1.4 4s4.61963 366.4 320.4 77.9 164.9 59.2 13.1 5.4 1.2 44,71964 425.9 373.1 87.5 190.1 75.4 1G.0 6.1 1.3 4v/.4

1J DLxc1udcs electricity generated by private companies for their owrn use which anounted to 289 rd.llion K~IH in1964: bauxita cor,panies 200 r.illion W3;, su-._ companies 54 mil].ion K11.1i and. cey!ent coiAmany 35 llion KVIfI1I.

Source: 'iconomic Survey Jt-aica 1964, Contr.l iTlanninr Unit.A'nnual Abstract of ,tr-tistics 1963, i0o. 23, Department of St..tistics.Unpublished Da.a released by the Einistry of Tradle and Industrye

JAtIIACAT TA'1AiSPORT Ai]:D CMiU-IOCATIONS 1953-

1953 1955 1957 1959 1960 1961 1962 1963 1904

:1.otpr Vehicles Licensedl'Cars 14.G92 17.198 2.31034 31.24c' 32.970 42.275 4J.50 5 ,.504 49.901Truicks, Tractors and Buses 4.44+6 5.407 7.138 8.854 9.207r 10.732 31.710 17.559 19.259i;otorcycles 971 1.106 1.614 2.,°56 2,935 2.936 3.523 3.429 4.809Trailors n.a. n.a. 1.235 1.3-45 1.782 1.. o 1.870 2.298 2.606

-'aiwyCrprationg.oute il.eame Open to biolic 207 20. 208 203 203 203 208 225 205:~ui.ber of Pa3sant,-rs (ioou) 9140 1.026 1.107 1.0.,5 1.043 801 974 1.038Tonrage of Goods Carried (1000) 409 325 764 9C0 1.009 1.320 1.200 1.345 1.930

S hi)p~i n;zA rio1,JU22ber 1.044 1.147 1.221 1.449 1.492 1443 1,519 1.557 n.a.

iT-t Re;;i7ztermd Tonnage (1000) 2.852 3.0 3 0.6 3.342 4.2U4 4.593 4.3"9 4.721 4.751 n.a.

Volume of Seacaro.. Ha4dledl/JavaL ca 1.813 n.a. 6.646 7.69- 7.935 3.353 10.k45 9.256 11.235;ingston 865 n.a. 1.244 1.557 1.507 1.274 1.5Q0 141, 2.315Outports 948 n.t .. 5.402 6.140 6.42" 7.584 8- 7.815 o.920

Comiercial Aircraft Lrrivr.sA/ 5.644 n.a. 3.113 7.216 6.540 (. 19 8.316 '.196 8.9,49)

r-uunbor of TelephOns./ 18.020 22.922 27.766 33,565 35.537 39.030 41.152 43.041. 45.79/4

-~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~11/ 2irac31 yern' beginnin., April 1. 4] j'Jflgtsonfl Arport only.g/ PIort of ;Aingston only. i/ Jzumaicca Tclo-ollon : Co*:p7ary Ltd.

100lOC tons.

&JourSce: A!mlUal Abostraicts of St&tistics, Department of t -t'.tiCS.

Unpublished Data relcasod lb-y the ii1aistry of 'T'raCe &znd InCuotry.

TABLE 24

JAMAICA: INDICES OF RETAIL PRICES OF CONStMER GOODS

KINGSTON AND RURAL AREAS 1956 - 1964

(monthly averages, December 1955 = 100)

A 1 1 I t e m s F o o d H o u s i n g C 1 o t h i n g Fuel and CleaningKingston Rural Kingston Rural Kingston Rural Kingston Rural Kingston Rural

Areas Areas Areas Areas Areas

1956 101 - 102 - 102 -- 100 - 101-

1957 lo4 102 105 103 105 102 100 101 104 102

1958 110 107 113 108 111 102 100 103 110 103

1959 113 108 1-16 110 117 104 102 10h 112 104

1960 116 110 118 113 128 108 102 108 117 106

1961 124 118 126 121 138 119 104 114 125 113

1962 126 121 126 123 145 122 106 116 126 112

1963 128 121 126 123 154 12h 107 115 131 109

196h 131 125 129 129 155 126 109 118 132 111

Source: Department of Statistics.

TABLE 25

JAMAICA: INDEX OF WAGES IN PRINCIPAL SECTORS 1961-1963

Agri- M a n u f a c t u r i n g Con- Trans- Distribu- Selectegculture Minting Sugar Food and Woods Metal struction portation tion Servic,

Beverages Products Products Industri1. Mean hourly wage rate (pennies),

September 19lUnskilled males 214 58 17 20 22 20 25 25 25 17Unskilled Females 9 34 14 19 13 14 15 16 17 15Motor Mechgnics 37 90 37 37 .. 51 .43General Office Clerks . 123 58 49 42 53 57 52 61Typists and Stenographers .. 98 55 56 56 61 58 50

2. Mean hourly wage rate (pennies),September l963

Unskiled males 14 78 24 31 25 28 37 52 34 24Unskilled Females 12 42 18 24 16 25 15 34 22 21Motor Mechanics 41 105 41 45 .. 64 .. 49 .General Office Clerks .. 137 74 78 52 72 75 87 87Typists and Stenographers .. 108 66 70 .. 74 73 70 69

3.. Percentage Increase in Mean hourly wagerates September 1961 - September 1963

Unskilled males - 34 41 55 14 40 48 108 36 41Unskllled Females 33 24 29 26 23 79 - 113 29 40Motor Mechanics 11 17 11 22 .. 25 .. 14 ..General office clerks * l1 100 59 24 36 32 67 43Typists and Stenographers .. 10 20 25 .. 32 20 21 38

4. Wage differentials by sectors 1963(mining = 100)

Unskilled males 24 100 29 34 38 34 43 43 43 29Unskilled Females 26 10O 41 56 38 41 44 47 50 44Motor Mechanics 41 100 41 41 .. 57 .. 48..General Office clerks .. 100 47 40 34 43 146 42 50Tistand Stenopraphers . 100 557 I 57 62 59 51Source: Mizcq'i- ETt. -i' De'it. of S,ett W17e Rates )963, Annual abq -cts nf Statistics :.961 through 1-964.

TABLE 26

Tf. MA Tr'f Ah C' 'AM1 TCJAMAICA: STUTh4AIY AOC12JITS OF THE 3ANI'IMG SYSTEM 1/19-53 e 1964

(millions of Jamaica pounds)

1953 1955 1957 1959 1960 1961 1962 1963 1964

A. Net Foreign Assets 9.4 13.6 15.2 8.1 4.7 2.2 °.5 21.9 14.6

1. Foreign Assets 2/ 10.0 14.0 17.9 13.9 11.1 18.2 20.3 28.1 27.42. Foreign Liabilities -0.6 -o.4 -2.7 -5.8 -8.7 -16.0 -10.8 -6.2 -12.7

B. Domestic Credit 17.0 16.4 26.0 40.4 46.o 49.6 53.5 49.5 65.0

1. To Government (net)!/ 1.9 0.4 1.2 2.2 2.3 3.2 9.5 10.2 11.7a. Central Bank (0.8) (0.2) (1.5) (3.6) (3.8) (1.0) (2.6) (-0.1) (1.5)b. Commercial Banks ) (1.1) (0.2 (-0.3) (-1-14) (-1.5) (2.2) (4.2) (6.9) (6.4)c. Government Savings Bank ) (2.7) (3.)4) (3.8)

2. To Private Sector 14.0 15.2 23.9 34.6 39.3 43.5 41.4 38.3 52.23. Capital and Unclassified Items 1.1 o.8 0.9 3.6 h.L4 2.9 2.6 1.0 1.1

C. Liabilities to Private Sector 26.L4 30.0 41.2 48.3 50.8 52.1 63.2 71.4 79.6

1. Money 15.0 16.8 21.6 25.1 26.1 23.9 30.5 30.1 33.3a. Demand Deposits 11.7 12.2 15.9 17.8 13.6 1.2 21.5 20.2 22.0b. Currency in Circulation 3.3 4.6 5.7 7.3 7.5 8.7 9.0 9.9 11.3

2. Time and Savings Deposits 11.4 13.2 19.6 23.2 24.7 28.2 32.7 4!3 46-3

1/ Includes the Central Bank, the six commercial banks and the Government Savings Bank.

2/ Includes gold sibscription to IiiF - S 1.2 million from March 1963 through June 196h, thereafter T 1.4 million.

3/ A statistical discrepancy exists with data presented in Table 32.

Source: International Mlonetary Fund.

TABLE 27

JAiMAICA: ANALYSIS OF BANK ADVAINCES 1962 - March 1965

(millions of Jamaiaca pounds)

March1962 1963 1964 1965

1. Government and Other Public Bodies 1.1 0.7 1.3 1.6

2. Cre!dit and Financial Institutions 0.8 0.9 1.4 1.8

3. Personal and Professional 5.6 5.4 7.1 7.3

4. Agriculture and Fishing 3.2 2.1 3.7 4.7

5. Mining 4.0 2.0 2.0 2.0

6. Industry (total) 5.7 6.3 10.6 11.1Sugar, Rum, Molasses (1.5) (1.6) (2.7) (2.7)Food, Drinks, Tobacco (0.8) (1.4) (2.0) (2.0)Textile, Leather, Footwear (0.8) (0,7) (0.7) (0.8)Other Industry (2.6) (2,6) (5.2) (5.6)

7. Building and Construction 1.7 1.5 2.6 3.0

8. Land Development 1.4 2.0 3.9 4.0

9. Distributive Trades 12.1 10.7 13.0 13.5

10. Hotels 2.0 2.2 1.7 1.6

11. Ente:rtainment 0.3 0.6 0.8 0.8

12. Public Utilities and Other 2.6 3.3 3.1 3.7

T O T A L 40.7 37.6 51.1 55.1

Source: Monetary Statistics 1964, Department of Statistics,Bank of Jamaica, Quarterly Report March 1965.

TABLE 28

JAIIAICAt T-REDjo IN ovi i CATEGORIE UrF u ERS AL SAvINGS AND SUMMARY

INDICATORS OF OPERATIOQS OF LIFE INSURANCE COMPANIES AND BUILDING SOCIETIES 1959 - March 1965(millions of Jamaica pounds)

March1959 1960 1961 1962 1963 1964 1965

1. Savings' Deposits with CommercialBanks 16.2 17.5 18.7 21.6 26.1 30.7 32*3

2. General Deposits with theGovernment Savings Bank 4 .5 L4.6 4.6 51 5.7 6.2 6.4

3. Building Society Deposits 3.1 3.3 3.6 3.7 4.2

4. Building Society Shares 2.9 3.2 3.5 4.0 4.8

5. Gross Premium Received by LifeInsurance Companies 2.6 3.0 3-3 3.5 4.4 --

T O T A L 29.3 31.6 33.7 37.9 45.2 --- ---

6. Life Insurance Policies in Forceat End of the Year 64.4 77.2 87.5 97.4 123.4

7. Assets of Building Societies 6.6 7.3 7.9 8.5 9.8

I/ End of year

Source: Monetary Statistics March 1965, Department of Statistics.

TABLFE 29

JAMAICA: COMPARATIVE BANK RATES AND TENDER RATES, GOVERNMENT SECURITY

YIELDS AND SELECTED OTHER INTEREST RATES 1960 - 1965

1960 1961 1962 1963 1964 1965

Rate of Discount 1/Bank of Jamaica --- 6.0 5.5 4.0 5.0 5.0Bank of England 5.0 6.0 4.5 4.0 7.0

Treasury Bills' Tender Rate 2/Jamaica 3.70 4.06 4-95 4.89 3.33 4X33United Kingdom 4.05 4.25 5.35 3.51 3.72 6.54

Government Security Yields 3/Jamaican Government

Local --- 7.25 6.95 6.95Sterling --- 7.47 7.15 7.23

United Kingdom Government --- --- 5.31 5.53 6.23

Deposit Rates3 months 1.7 2.8 4.0 3-0 2.66 months 2.2 3.3 4.5 3.5 3.112 months 2.7 3.8 5.0 4.0 3.6Savings 3.2 3.2 3.5 2.5 2.2

Commercial Banks' Prime Lending Rate 6.2 6.9 7.4 6.4 7.0

Mortgage Rates 7.4 7.6 7.8 7.8 7.9

1/ End of year.2/ Three monthsT paper.3/ Longdated.

Source: Quarterly Abstract of Statistics, December 1964, Department of Statistics,Annual Abstract of Statistics 1963, Departn,ent of Statistics,Monetary Statistics, March 1965, Department of Statistics,Eank of Jamaica: Report and Statceent of Accounts for the year ended December ).96h4

TABLE 3Q

JA,4kICA: CE11TRAL GOVE?RNviEWT CURRENT REVENUES 1955-1966 1/

(millions of Jamaica pounds)

RevisedEstimate Budgeted

1955 1957 1959 1960 1961 1962 1963 1964 1963 19b6

1. Taxes 14.1 18.6 25.6 28.1 30.1 32.9 36.1 37.0 14.5 147.1

Direct taxes 4.2 5.J 10.2 10.2 10. 13.7 15.7 15.2 17.5 17.6Income tax 3.9 77 906 10.3 12.9 I5T 1T.2 5577 17.1Land and Property tax 0.1 0.1 0.1 0.2 0.3 0.4 0.5 0.4 0.5 0.5Death Duties 0.2 0.2 0.3 0.4 0.2 0.4 0.2 0.6 0.1 --

Indirect taxes 9.9 13.3 15.4 17.9 19.3 19.2 20.4 21.8 27.0 29.5Customs Duties 7 77 9.7 11.9 12.9 1.8 12.9 13.0 13.9 14.5Excise Duties 3.6 4.3 4.4 4.5 4.7 5.5 5.6 6.7 10.6 11.8Consumption Duties -- -- -- -- -- -- -- 0.3Stamp Duties 0.2 0.3 0.14 0.5 0.6 0.5 0.5 0.5 0.6 o.6Licenses 0.2 0.5 0.7 0.8 0.9 1.2 1.1 1.3 1.6 1.7Other 0.1 0.1 0.2 0.2 0.2 0.2 0.3 0.3 0.3 o.6

2. Non-tax Receipts 2.5 3-3 3.6 3.3 4.6 4.0 4.5 4.7 147 4.2

Post Office 0.5 0.7 0.8 0.9 0.9 1.0 1.1 1.2 1.4 1.4Royalties 0.1 0.2 0.7 0.7 0.7 0.6 1.1 0.9 1.0 1.0Departmental and Other

'Iiscellaneons Revenues 1.9 2.4 2.1 1.7 3.0 2.4 2.3 2.6 2.3 1.8

TOTAAL CURRE1,T REVENUES 16.6 21.9 29.2 31.4 34.7 36.9 40.6 41.7 L9.2 51.3

Revenue as percentage of thaGross Domestic Product 12.6 12.5 _ 13.9 114.5 14.8 14.7 15.6 15.0 16.8 _-- -

1/ Fiscal years ending March 31-Source: Ministry of Firance and Staff estimates.

TABLE 31

JkMA'ICA: COGPOSITION OF CENTRAL GOVERNI,E,T' CURRENT EXPE1NDITURES 1/ 1960-1966

(thousands of Jamaica pounds)

RevisedEstimate Budget

1960 1961 1962 1963 1964 1965 1966

General Administration 6600 7847 7834 9954 11076 12400 12220

Agriculture 1765 1769 1959 2037 2118 2727 2518

Education and SocialWelfare 5851 6499 8611 9326 9628 10926 11943

Public Health 3488 3781 4074 4812 5066 5794 5951

Communications and Works 3940 4333 4856 5096 5314 5783 5577

Trade and Industry 258 288 312 380 442 440 476

Judicial and Legal 335 349 388 458 521 552 563

Other 3863 2834 2666 2737 3135 3978 4852

TOTAL 26100 27700 30700 34800 37300 42600 44100

1/ Fiscal year ending March 310

Soi0Uce: Estimates 1960-1966, Gcvernm.ent of Jamnaica.

TABLE 32

JAMAICA: FISCAL OPERATIONS OF THE CENTRAL GOVERNTNIET 1960 - 1966 _/

(millions of Jamaica pounds)

1960 1961 1962 1963 1964 1965 1966

Current Revenues 3104 34.7 36.9 40.6 41a7 49.2 51.3

Current Expenditures 26.1 27.7 30.7 34.8 37.3 42.6 44h1

Current Account Surplus 5.3 7.0 6.2 5e8 4hL 6.6 7.2

Less: Sinking Fund Contributions andDirect Debt Repayments -0,5 -0.5 -0.8 -0.9 -0.7 -0.9 -1.4

Less: Debt Redemption -0.3 -0.1 -0.3 -0.3 -0.6 -2.0 -2.4

Plus: Debt Repayments to Central GovernmentV _ 0.3 0.1 0.2 2.3 0.2 1.8 0.2

Savings available to finance investments 4.8 6.5 5.3 6.9 3.3 5.5 3.6Investment Expenditures 10.7 10.6 10.8 119 12.2 14.7 16.7

Deficit, 5.9 4.1 5.5 5.0 8.9 9.2 13.1

Financed by:

Foreign Grant Assistance 1.3 0.3 0.1 0.4 0.4 0.4 0.1Net VJse of Government Deposits 2.1 0.1 2.7 -2.0 -0.7 -1.2 -0o9Total Borrowing 2.4 3.7 2.8 6.7 9.3 10.0 13-9

Domestic Borrowing 2.7 0.3 2.7 :- 9.3 7--7Treasury Bills (1.1) (-1.2) (1.8) (1.1) (2.7) (---) (1.1)Long term (1.3) (1.5) (1.0) (2.9) (6.6) (5.4) (4.6)

Foreign Borrowing --- 3.h ___ 2.7 --- 4.6 8.2

1/ Fiscal year ending March 31. 2/ Loan repayments made by StatutorY BodiesSource: Ministry of Finance and Staff estimates.

TP1LTE 33

JAMAICA: ESTriqATED GROSS PuBLIC lN-VESTKET zEXPENDITURES 1960-1968 1/

(thousands of Jamaica pounds)

RevisedPlne

EStimate Budget Planned1960 1961 1962 1963 196h 1Tb-;- 1966 1967 1968

1. Agriculture 141l 1014 1356 1239 1317 1834 2490 2'CC 14400Animal Developnent 71 - 66 -7-7 69 68 79 125 1000 1000Irrigation 57 89 95 51 30 53 155 200 200Afforestation 69 62 121 113 d1 84 227 300 200Land Reform 661 229 326 452 416 679 766 1000 1200Marketing --- --- --- --- --- 131 270 4C0 600Other 553 568 7h 7 551 722 808 947 1000 1200

2. Public Works 2514 2742 3273 26 54 3902 5093 5725 68()G 6000Roads and Highways Thg 1208 1122 1311 1010 1000 12C 1800Feeder Roads 400 382 418 400 653 687 490 600 700Water Control, Flood Damage 173 85 122 376 832 974 719 700 700and ReclamationDrainage 349 346 329 436 899 2074 2055 2200 800Sewerage --- 105 262 57 42 250 825 ?00 700Other 709 961 634 173 165 98 636 1200 13.00

3. Water Supplies 575 699 598 492 650 1402 15144 1800 12004. Education 1022 994 909 863 727 868 995 2000 23005. Housing 732 306 668 572 568 1618 1676 1200 12006. Health 470 485 1a418 293 334 326 1h45 700 8007. Other Investment 3976 4360 3548 5787 4702 3559 3825 5100 48CC

Expenditures

TOTAL 10700 10600 10800 11900 1.2200 14700 16700 21500 20700

1/ Fiscal year ending March 31.

Source: Miinistry of Finance.

TABLE 34

JAMAICA: BALANCE OF PAY1,EITES 1953 - 1964(L million)

1953 1955 1957 1959 1960 1961 1962 1963 1964

1. CURRENT ACCOUNTExports f.o.b. 25.9 34.4 50.7 46.9 58.8 63.6 65.7 74.4 79.7Imports c.i.f. 35.6 45.7 66.8 69.3 77.5 75.4 78.6 80.8 100.8Trade Balance -9.7 -11.3 -16.1 -22.h -18.7 -11.8 -12.9 -6.4 -21.1Services (net)Foreign Travel 3.9 5.6 5.1 8.0 12.0 12.0 10.1 10.2 11.4Insurance -O.8 -1.1 -1.5 -3.4 -3.7 -3.7 -3.7 -4.1 -L.2Investmrent Income -2.2 -3.2 -4.2 -7.4 -10.9 -12.5 -12.6 -13.1 -40.4Other Services 1.6 0.5 0.3 6.7 7.4 7.h 9.8 9.9 10.1Balance on Services 2,5 l.o -003 3.9 r3.2 3.6 2.9 2.9

Balance on Goods and Services -7.2 -9.5 -16.4 -18.5 -13.9 -8.6 -9.3 -3.5 -18.2

Unilateral Transfers 3.0 3.3 5.1 4.6 6.0 4-9 6.7 6.7 6.1

CUPREN,'T ACCOUNT BALANCE -4.2 -6.2 -11-3 -13.9 -7.9 -3.7 -2.6 3.2 -12.1

2. CAPITAL ACCOUNT n.a. n.a. 13.3 12.4 10.6 9.8 1.3 7.1 ]1.3Official Longterm n.a. nOa. 3.0 3-0 -T- 0.5 2.2 I-.Private Longterm n.a. n.a. 904 6.9 4.7 4.1 5.7 9.5 0.7Private Short term noa. n.a. 5.4 2.5 2.9 7.3 -5.2 -4.6 6.5

3. NET ERRORS AND OMISSIONS n.a. nOa. -3.7 1.4 -2.4 -4.8 2.0 -1.1 0.2

S UPLUS OR DEFICIT (-) n.a. n.a. -1.7 -0.1 0.3 1.3 0.7 9.2 -0.6

4. CHAMGE IM RESERVES (ITCREASE -) n.a. n.am neaO 0.2 -0.2 -1.3 -0.6 -9.2 0.7Coiimercial Banks n.a. n.a. n.a. -T7 -0.1 1.2 -1.2 -3.2 2.9Bank of Jamaica n.a. n.a. n.a. -0.7 0.3 -6.0 -1.0 -404 -2.0Governnent Holdings n.a. noao n.a. 2i4 -o.4 3.6 2.7 -1.8 -0.2

Source- M'inistry of Finance and Dcpartment cf Statistics.

TABLE 35

JAMAICA: EXTERNAL CURRENT ACCOTJNT 1959 - 1964 ;(millions of jamaica pounds)

1 9 5 9 1 9 6 0 1 9 6 1 1 9 6 2 1 9 6 3 1 9 6 4Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Debit

GOODS Exports f.o.b. 46.9 58.8 63.6 65.7 74.4 79.7Imports f.o.b. 61.4 67.0 68.1 68.9 71.1 88.5

Balance on Goods 1465 8.2 4.5 5.2 3.3 8.8

SERVICES (total) 28.0 32.0 34.9 40.6 36.3 40.4 36.8 42.9 38.1 14U-9 41.8 51.2Merchandise Freight 1.0 7.2 1.1 9*8 1.0 6T6 1.0 9.0 1.0 -T9 11T lle3Merchandise Insurance --- 0.7 --- 0.7 --- 0.7 --- 0.7 --- 0.8 --- 1.0Other Transportation 4.1 3.5 4.5 4.4 4.3 5.0 4.6 3.2 4.7 3.0 5.7 4.1Foreign Travel 10.0 2.0 114. 2.4 114.6 2.6 13.1 3.0 13.5 3.3 15.6 4.2Investment Income 2.2 9.6 2.3 13.2 2.3 114.8 2.3 14.9 2.3 15.4 2.4 16.8Government Transactions (n.i.e) 1.0 0.1 1.2 0.1 1.3 0.2 1.1 0.5 0.7 0.7 0.6 0.9Other Services 9.7 8.9 11.4 10.0 12.8 10.5 14.7 11.6 15.9 12.8 16.4 12.9

Insurance (1.7) (5.1) (2.1) (5.8) (2.4) (6.1) (2.8) (6.5) (3.5) (7.6) (3.5) (7.7)Other (8.0) (3.8) (9.3) (4.2)(104) (4.4)(11l9) (5.1)(12,4) (5.2)(12.9) (5.2)

Balance on Services/ 14.1 5.7 4.1 6.1 6.9 9.4

TOTAL GOODS AND SERVICES 74.9 93.4 93.7 107.6 99.9 108.5 102.5 111.8 112.5 116.0 121.5 139.7

Balance on Goods and Services 18.5 13.9 8.6 9°3 3.6 18.2

Transfer Payments 6.7 2.1 8.0 2.0 7.6 2.7 8.6 1.9 8.7 2.0 8.4 2.3Private (37.) (07) ( 7 ) ('U) (777) (°-9) (7f:5) (°*7) (77T) (0.6) (77.) (07.)Government (1.1) (1.4) (1.1) (1.2) (0.2) (1.8) (0.6) (1.2) (0.6) (1.4) (0.8) (1.7)

Balance on Transfer Payments 4.6 6.0 4.9 6.7 6.7 6.1

CURRENT !5CCOUNT BALANCE 14.0 8.0 3.7 2.7 3.2 12.2

1/ This' table incorporates revisions not included in Table 314. Therefcro, some figures are slightly different.

2/ Service account balance differs substantially from the Balance in table 34 where inportQ are entered on a CIF basis.Source: Miristry of Finance.

TABLE 3£

JAMAICA: FOREIGN ASSETS AND LIABILITIES 1953 - 1964

(millions of Jamaica pounds)

1953 1955 1957 1958 1959 1960 1961 1962 1963 1964

1. Gross International Reserves of 1070 14.0 17.9 1165 13.9 13.4 18.2 20.3 28.1 27.4the Banking System

Currency Board/Bank of Jamaica 1/ (4.2) (6.4) (7.1) (6.3) (7.0) (6.7) (12.7) (13.7) (18.1) (20.1)Cormerclal Banks (5. 8) (7.6) (10.8) (3e2) (14."' (4e8 (3.6) (148) (8 (5.1 )Government Savings Bank (2.0) (2.2) (1.9) (1.9) (1.8) (2.0) (2.2)

2. Government Funds 16.7 114.2 14.9 11.4 10.3 12.2 12.6965 8.7 12.0

3. Other Quasi Government Institutions 3.2 3.1 3-1 3.0 265 2.2 1.7

4. TaOAL FOREIGN ASSETS 1965 22.7 29.9 31.4 31.2 31.4 32.6 33.1 4265 41.7

5. Commercial Banks' Liabilities -0.6 -0.4 -2.7 -3.3 -5p8 -8.7 -16.0 -10.8 -6.2 -12.7

6. TOTAL NET HOLDINGS 18.9 22.3 27.2 28.1 25.4 22.7 16.6 22.3 36.3 29.0

1/ Includes the IMF gold tranche.

Source: International iMonetary Fund and Ministry of Finance.

TABLE 37

JAMAICAT VATLUE O PR,'TACIOTPATL EXPORTS, i953-1964 1/

(millions of Jamaica pounds)

1953 1955 1957 1959 1960 1961 1962 1963 19,64

TOTAL EXPORTS 24.5 32.4 49.5 45.3 55.8 60.6 62.2 70.2 75.8

Alumina and Bauxite 2.8 8.7 21.5 20.4 27.5 300 30.1 29.6 33.9of which: Alumina --- 4.9 11.9 9.T2T T 17 16.07

Bauxite 2.8 3.9 9.6 11.0 10.9 13.1 15D7 13.6 15.9

Other Products 21.7 23.7 28.0 214.9 28.3 30.6 32.1 40.6 41.9of which: Sugar 10. 10.8 12.6 11.7 13.0 114.2 T). 21.2 T37

Bananas L.6 5.0 6.8 4.9 .8 14.9 145 4.8 6.2Pimento 0.6 0.7 0.8 0.9 1.0 1.5 1.2 1.5 1.4Cocoa and By-products 0.6 0.8 0.5 0.5 0.7 0.5 0.5 0.4 0.3Coffee 0.6 1.1 0.6 0.4 0.3 0.3 0.3 0.3 0.3Fresh Citrus and By-products 1.2 1.3 1.6 1.4 2.4 2.1 2.0 3.0 2.7Rum 0.9 1.0 1.4 1.2 1.3 1.1 1.0 1.1 1.4Molasses 0.3 0.5 0.3 0.5 0.5 0.9 0.8 1.1 0.8Tobacco 0.5 0.4 0.4 0.3 0.4 0.4 0.5 n.a. n.a.Manufactures ---- --- 1.2 2.1 2.9 L.3 .14 5.5

of which: Clothing --- --- --- (0.3) (1.0) (1.4) (2.2) (2.5) (3.0)Other --- --- --- (0.9) (1.1) (1.5) (2.1) (1.9) (2.5)

Other Products 2.3 2.1 3.0 1.9 1.8 1.8 2.4 2.8 3.5

1/ Export totals differ from those presented in the Balance of Paymentst Table. The latter incorporate recentrevisionsO

Source: External Trade of Jamaica, 1955, 1957, 1959, 1961, Government of Jamaica.Report and Statement of Accounts for the Year Ended 31 December, 1964, Bank of Jamaica.Economic Survey of Jamaica 1964, Government of Jamaica, 1965.

TABIE 38

JAIVIAICA: VOLUINE OF PRINCIPAL EXPORTS 1953 - 1964

1953 1955 1957 1959 1960 1961 1962 1963 1964

Alumina (1000 tons) --- 184 436 399 665 703 628 725 768

Bauxite (1000 tons) 1253 2172 3641 4197 4148 4975 5987 5162 5967

Sugar (1000 tons) 330 / 397 1/ 359 1/ 376 424 44o 433 484 474

Coffee (bags of 60 kilos) n.a. 32776 23461 16909 11439 10313 12999 12788 13478

Cocoa (tons) n.a. n.a. n.a. 910 1599 1098 2196 1245 1442

Bananas (100,000 stems) n.a. n.a. n.a. 103 102 103 109 116 135(1000 long tons) n.a. n.a. n.a. 138 137 138 1h6 160 174

Citrus - Fresh Fruit (1000 pkg) n.a. n.a. n.a. 121 194 256 299 438 278Canned Fruit (1000 lbs.) n.ae n.a. n.a. 8822 12216 16899 15728 18069 18128Fruit Juices (1000 gals) n.a. n.a. n.a. 980 1557 1156 1353 1701 1833

Essential Oils (1000 lbs.) n.a. n.a. n.a. 192 210 234 252 211 181

Marmalade pulp, peel (1000 lbs.) n.a. n.a. n.a. 1359 428 2163 848 4234 745

Pimento (1000 lbs.) n.a. n.a* n.a. 3785 4139 6512 5253 5647 4970

Ginger (1000 lbs.) n.a. n.ao n.a. 2073 1711 1511 1019 1281 1427

Cigars (lb.) n.a. n.a. n.a. 27 190 132 72 122 1968

Rum (1000 liq. gals) n.a. n.a. n.a. 1536 1463 1236 1231 1354 1689

l/ Crop year.

Source: Economic S n vey jai,7aica, lS62, 1963, 1964, and unpublishad inforrnation released by the Min-s'ry o' 'gricul'Uure aridLand, the Banana Board, Coffee Industry Board and Cocoa Industry Board.

TA3LE 39

JAMAICA: VALUE OF E@ORTS OF CFRTAIN MANUFACTURED GOODS, 1959-1964

(thousands of Jamaica pounds)

1959 1960 1961 1962 1963 1964

Cosmetics 52 47 41 79 91 99Medicinal & Pharmaceutical Products 11 22 24 22 36 36Dentifrices - - 92 172 196 187Paper Bags, Cardboard Boxes, etc. 43 61 51 83 63 106Fabric of Jute - - - 9 347 600

Textile Yarn and Fabrics 199 130 346 211 69 108Buttons and Studs 32 48 53 87 148 162Footwear 122 167 191 252 203 249Travel Goods, Handbags 84 71 37 21 12 10Sports Goods - 40 102 70 97 119

Cl-othing 325 991 1423 2217 2472 3003PasketTware 22 14 9 11 12 9FLrnituire and Fixtures 40 52 53 24 21 14Phonograph Records 5 15 15 12 21 27Tin Caiis 125 233 283 694 101 139

Paints 69 78 69 124 133 175Glycerine 29 40 20 15 27 7Portland Cement 19 96 95 175 286 289Table Pottery - - - - 22 109Sugar Machinery _ - - 10 43 40

Total 1177 2105 2904 h288 44oo 5488

Oource: Ecoromic Survey Jamaica, 1964, GovernmXent of Jamaica, 1965.

TA3LE 40

J T A-Lull. : 111mc' I Y MJO CATEGORIES, 1953 - 1"964'

(C.I.F. Value in millions of Jamaica pounds)

Percentage ofAnnual Increase

1953 1955 1957 1959 1960 1961 1962 1963 1964 1953-62 1963 1964

Food 7.8 9.1 11.5 14.6 14.6 14.4 16.2 17.1 20.8 8.4 5.6 21.6Beverages and Tobacco 0.6 0.9 1.3 1.6 1.8 1.6 1.8 1.6 1.7 13.0 -11.1 6.3Crude Materials, Inedible, except Fuels 1.8 1.7 2.7 2.6 2.8 2.3 2.5 2.6 3.4 3.8 4.0 30.8Mineral Fuels, Lubricants and Related 3.2 4.0 6.1 6.6 6.4 7.7 7.4 7.3 8.9 9.8 -1.4 21.9

MaterialsAnimal and JVegetable Oils andFats 0.3 0.3 0.5 0 0.6 0 0.4 0.4 3.3 --- .0Chemicals 2.3 3.6 4.8 5.8 6.2 6.2 6.5 7.0 9.1 12.5 7.6 30.0

Manufactured Goods 9.6 13.0 19.1 16.3 19.6 19.4 20.1 21.3 26.2 8.6 6.0 23.OMachinery and Transport Equipment 7.4 9.4 15.8 14.3 18.5 16.3 18.1 16.6 21.6 10.5 -8.3 30.1

of which:Non-electrical Machinery (3.1) (4.4) (8.0) (6.1) (7.1) (7.5) (8.0) (7.1) (10.0) (11.1) -11.3 40.8Electrical Machinery (1.7) (1.8) (2.9) (3-1) (3.8) (3.6) (3.7) (4.0) (3.7) (9.9) 8.1 -7.5Vehicles and Transport Equipment (2.6) (3.2) (4.9) (5.1) (7.5) (5.3) (6.3) (5.5) (7.8) (10.5) -12.7 41.8

Miscellaneous Manufactured Articles 2.4 3.6 4.8 5.9 6.9 6.8 6.5 6.5 8.3 11.5 --- 27.7Miscellaneous Transactions and

Commodities 0.1 0.1 0.1 0.1 0.2 0.2 0.2 0.2 0.2 7.0 --- ___

T O T A L 35.5 45.7 66.7 68.6 77.5 75.4 79.6 80.6 100.7 9.4 1.3 24.9

1/ Import totals differ from those presented in the Balance of Payments' Table. The latter incorporate recent revisions.

Source: Economic Survey Jamaica, 1964.External Trade of Jamaica 1955, 1956, 1957, 1959.

TABLE 41

JAMAICA: IMPORTS OF FOODSTUFFS, 1960-1964

(thousand lbs.)

Percentage Increase In1960 1961 1962 1963 1964 1960-1964 1963 19iF--

Rice 48,359 41,063 41,900 49,745 60,213 25 19 21Corn 28,494 30,723 33,f14 36,972 57,270 101 12 55Cornmeal 4,766 6,800 8,838 6,477 10,446 119 -28 61Baking Flour n.a. 95,838 94,063 94,034 113,252 181/ - 20Counter Flour 88,256 86,936 93,336 92,939 77,860 - 1 - 7 - 7

Beans, peas, etc. 5,700 5,379 7,405 6,633 9,183 61 -21 33Onions 7,618 6,956 7,000 7,834 8,440 11 12 3Otber Vegetables 1,075 1,815 1,430 1,233 1,561 45 -13 27Beef and Veal 2,429 1,873 3,354 4,800 6,153 143 43 23rkatton and Lamb 751 794 872 740 1,015 35 -15 37

Pork 330 120 105 1"/ 56 -70 - -Poultry Nleat 1,491 1,770 2,734 3,567 3,835 157 30 8Otber Meat 1,592 1,890 2,588 3,319 5,111 221 28 54Poultry, Live3/ 1,030 944 405' 35 4 - _ _Fish: fresh,chEilled and

frozen 516 424 435- 556 670 30 28 21Potatoes4/ 7,943 11,301 12,006 10,788 7,042 - 11 -10 -31

Eggs•/ 67 46 26 43 10 - _ -

Milk and Cream, Drv 10,363 8,981 13,777 12,160 13,991 35 -11 15

1/ 1961-1i614 3/ Numbe-, in thousands 5/ 000 dczens2/ A ba.n eqas inposed upo;n pcrl; iniports duriig 1963 ! Inolud.as Weod potatces for pla,itii.gSource: Economic Survey Jamaica, 1963 and 1964

TABLE 42

JLMAICA: TERNS OF TRADE 1954-1963

(1954 100)

P r i c e i n d i c e s Terms of

Imports Exports Trade

1954 100e0 100.0 100.0

195' 110.1 10797 97.8

1956 117.4 107.3 91.4

1957 120.8 123,1 101 9

1958 123o5 114.2 92.5

1959 126.2 111.9 88.7

1960 125.9 110X7 87e9

196L 131.8 110 0 84.2

1962 143.7 110.1 76.6

1963 143,2 129.7 1/ 20-6

1/ Primarily due to the rise in the average export price ofsugar

Source: Economic Survev Jamaica, April 1965,

Central Planning Unit.

A P P E N D I X 2

TRENDS AND PROSPECTS IF AGRICULTURE

1. Sugar is Jamaica's main agricultural product. Although theindustry accounted for only 8 percent of GDP in 1964, it generatedabout 25 percent of the country's merchandise export earnings. In addi-tion, at the peak of the season, the 18 sugar estates provide direct em-ployment to 33,000 persons!, and the entire sugar industry, including canefarmers, offers direct employment to between 80,000 and 90,000 persons,or to about 15 percent of Jamaica's labor force. Currently, about one-helf of the sugar cane is grown by the smaller cane farmers (as comparedto 37 percent in 1953) who have rapidly increased their production in thisperiod, largely stimulated by extension and research activities undertakenby the private Sugar Manufacturers' Association of Jamaica Ltd. and theAll-Island Jamaica Cane Farmers' Association. The production of sugar in-creased rapidly from 335,000 tons in 1958 to 484,Ooo tons in 1963 and wouldhave amounted to about 500,000 tons in 1964 were it not that unusually heavyrains just before and at the commencement of the 1964 season reduced sugarnroduction to 474,000 tons..

2. The sugar industry in Jamaica is capable of further increases inoutput, particularly from improvements of yields per acre, mainly throughthe introduction of new higher-yield varieties and a heavier use of fertili-zers: yields on the large estates average about 35 tons per acre as comparedto 20 tons on the smaller farms. Programs in execution aim at increasingthe yields on the estates to 45 tons per acre and to about 30 tons on thesmaller farms. At present cane-loading machinery is gradually being intro-duced on some of the larger estates where a lack of cane loaders - whichis considered undignified work - at various times has resulted in transportdelays, causing sugar yields to drop. These programs should lead to asubstantial increase in cane deliveries to the 17 sugar factories whichat present operate below their 600,000 tons production capacity. Moreimportant, sugar production costs should thereby drop, provided that wageincreases do not exceed the resulting rose in productivity and that labordisputes can be kept at a minimum. The reduction in sugar production costsis especially important in the light of the prospective lower level ofsugar prices.

3. The value of sugar exnorts nearly doubled in the 1958-1964 periodfrom Tl0.4 million in 1958 to 119.6 million in 1964, as a result of a 40 per-cent increase in the export volume and a 25 percent rise in the average unitvalue of sugar exports. Although the world market price of sugar hasfluctuated widely during the past three years and is now substantiallybelow the levels prevailing in 1963 and early 1964, the effect of thesefluctuations on Jamaica has been largely reduced by Jamaica's marketingarrangements with the United Kingdom, Canada and the United States. Jamai-can sugar exports had been traditionally concentrated in the United Kingdomand Canadian markets although in recent years, following the reallocationof the United States sugar quota in 1962, a significant percentage of exportshas been shipped to the United States. In 1964, the United Kingdom purchased583 percent, and Canada and the United States about 21 percent each.

4. The various expansion schemes undertaken by the Sugar Manufacturers'Association and the All-Island Jamaica Cane Farmers' Association could haveled to a substantial increase in sugar production, expecially now that theJamaican Government has agreed to give certain invrest.ment allowances tosugar manufacturers to encourage them to increase their factory capacity.In addition, the Jamaican Government has worked out a "crash program" ofadditional incentives for the expansion of cane production to satisfy fullypresent factory capacity of 600,000 tons during the next two or three years.Sugar production, therefore, could have risen from 474,000 long tons in1964 to about 700,000 tons by 1970. However, the limitations which Jamaicaexpects to encounter in increasing its exports, has led to a substantialreduction in the country's present production targets. Production, there-fore, is now expected to rise only in line with the limited growth indomestic consumption and exports, to about 560,000 tons by 1970, out ofwhich about 480,000 tons should be exported.

5. Bananas, the country's second largest export crop, are grownthroughout the island on both larger plantations (about 40 percent oftotal production) and small holdings. Production hardly changed from the1.4 million stems level in the 1953-1960 period, largely due to unsolveddisease problems, unsatislactory cultivation practices on the smal-ler farms, and occasional labor unrest on the plantations. Since 1961,however, banana production steadily increased to 16.5 million stems in 1964,despite the setback which the industry received from the Flora flood-rainsof October 1963, mainly because of the successful efforts of the BananaBoard to increase the quantity and quality of production. The Board - apublic Statutory Body - is the sole buyer and exporter of bananas on theisland and operates on a sound commercial and rational technical basis. Itcooperates closely with the private Pll-Island Banana Growers' Associationin executing a Banana Replanting and Rehabilitation Program which aims atimproving yields on existing acreage (about 80,000) largely through improvedcontrol of leaf spot diseases achieved by an integral spraying program andthrough inducing farmers to closer planting and heavier use of fertilizers.The heavier use of fertilizers is facilitated by the recent institutionof a Fertilizer Credit Scheme under which growers pay for fertilizer issuedto them by the Growers' Association through deductions by the Banana Boardon their deliveries. In addition the Board operates a Fertilizer SubsidyScheme for the benefit of the small farmer. The increase in production inthe 1961-1964 period has been the result of these programs; the acreage didnot change appreciably.

6. In 1962 steps were taken to further improve the organization ofthe banana industry. An international firm of management consultantsinvestigated all aspects of the industry during 1963, including the organi-zation, administration, and operation of the Banana Board, the Banana Indus-try Insurance Board and the All-Island Banana Growers' Association and sub-mitted recommendations for improving the industry's efficiency. These arenow being implemented and arrangements are being made to integrate thesethree organizations.

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7. In line with the increase in banana production, and also due tothe Banana Board's efforts to raise quality, which resulted in a markeddecline in the volume of bananas relected for export, the volume of bananaexports increased steadily from 10.2 mill4on stems in 1960 to about 13.5million stfms in 1964. All of these exports were to the United Kingdcm.Tle TK imports on a duty free basis bananas from Commonwealth countriesunder preferential quotas and prices. Jamaica, however, faces increasingcompetition from the Windward Islands which resulted in part in an occas-ional oversupply of bananas in the tUK mark-et with the consequent loweringof prices. The average greenboat price dropped by about 20 percent in the1958-1965 period (1965 prices oscillate around L60 per long ton) and thiscaused export earnings to remain virtually constant between 1958 and 1903.Only in 1964 did export earnings rise appreciably (25 percent) to L6 million.At various times discussions have been held to provide for the orderlymarketing of benanas in the United Kingdom with a view to concluding ar-rangements satisfactory to both Jamaica and the Windward Islands, whichtogether supply about 90 Percent of UK banana consumption.

8. Banana production costs in Jamaica have risen appreciably in thelast decade, mainly because of the granting of substantial wage increases.This high-cost situation complicates the Banana Board's intentions to di-versify exports fron the United Kingdom where the consumption of bananasonly increases moderately, although recently efforts have been successfulto export high-quality bananas to Western Germany and Italy.

9. Unless labor costs rise faster than productivity in the next fiveyears, the volume of Jamaica's banana exports should rise from about 174,000long tons in 1964 to 210,000 in 1965 and thereafter to aoout 235,000 tonsby 1970, mainly as a result of the yield improvements vhich the industryis successfully trying to achieve. This should be feasible expecially nowthat new higher yield varieties (Valery Suckers) are being introduced.

10. Its favorable climatic and geographical situation makes Jamaicaa natural grower and exporter of citrus fruit, and in recent years - underthe stimulus of a Government sponsored Citrus Development Plan - there hasbeen substantial growth in the production and exports of citrus and citrusproducts. Under this plan interest-free loans are made available to farmersto acquire fertilizers and to undertake spraying activities through the pri-vate Citrus Growers' Association, which is the sole exporter of fresh fruiitand the main exporter of citrus products (canned fruit, fruit juices, es-sential oils and other by-products) which are processed by the Association'stwo factories. In 1962 the Association launched a Planting Program whichaims at a substantial expansion of the acreage under citrus, an improvementof fruit quality through the introduction of new high-yield trees and theuse of proper cultivation practices. At present out of the total acreageunder citrus amounting to about 30,000 acres, about 27,000 acres have beenbrought under the Program, which should lead to a sizeable increase in pro-duction in the years ahead, provided that unfavorable weather conditions donot affect Jamaica as they did in 1964, when citrus production fell con-siderably for this reason. In addition, about 5,000 acres of oranges and

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grapefruits are being planted at present, which should lead to further pro-duction increases by 1970. In the execution of this relatively large ex-pansion nrogramn the Citrus Growers' Association is being guided by the recom-mendations of an international firm of management consultants which investi-gated the administration of the citrus industry in 1964.

11. In line with the prospective increase in citrus production - whichshould rise by about 10 percent annually in the 1965-1970 period - exportsof citrus and citrus products should go up from US$9 million in 1965 toUSI;15 million in 1970, an increase of about 65 percent, in the expectationthat Jamaica can continue to compete successfully with Brazil, British Hon-duras, the United States and the Mediterranean countries.

12. Exports of cocoa increased rapidly in the 1958-;°62 period from 339tons in 1958 to about 2,200 tons in 1962, and could have risen to about 2,500-3,000 tons in the years 1963 and 1964 if the country had not been hard hit bythe Flora flood-rains of October 1963 which resulted in a considerable de-cline in cocoa exports to 1,245 tons in 1963 and 1,442 tons in 1964, mainlydue to the blockage of roads, damage to trees, and to severe attacks ofdiseases in high rainfall areas. The main stimulus to increasing productionand exports came from the Government-sponsored Cocoa Expansion Scheme underwhich the acreage under cocoa increased from 12,000 in 1957 to 35,000 in1964, the larger part of it now being planted with high-yield hybrid treeswhich should raise productivity from the present low level. The Schemeis being executed by the Cocoa Industry Board - a public statutory Bodywhich is the sole bWrer and exporter of cocoa-beans and operates thecountry's fermentaries. Although recently larger farmers have gone intococoa, the main part of the crop is produced by small farmers who grow anaverage two acres in cocoa. To some extent the expansion in cocoa acreage -running at about 4,000 acres annually - is being encouraged under the Hill-side Subsidy Scheme which forms part of the Farmers' Production Programdesigned to encourage small farmers to improve the productive capacity oftheir lands by subsidizing part of the land improvement costs. In recentyears exports of cocoa by-products have fallen rapidly largely due to in-creasing local consumption, and to the fire which destroyed the largestfactory of by-products in 1963.

13. The efforts of the Cocoa Industry Board to raise the quality ofcocoa production, to improve yields and to expand the acreage under cultiva-tion rapidly should lead to a rapid rise in production and exports, on theassumption that Jamaica will continue to be able to command premium priceson Ghana cocoa in the years ahead. Exports should rise rapidly to 3,000tons in 1965, and thereafter to about 5,000 tons by 1970.

14. Most of Jamaica's high quality coffee is grown on the slopes ofthe hills of the main mountain ranges that cut right across the island byabout 55,000 small growers who produce roughly 95 percent of the courntry'soutput. Production has steadily fallen since 1900 when about 100,000 bagswere exported by the larger estates. These estates were subdivided subse-quently. The resulting continuing decline in coffee production was only

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reversed in 1961 when the efforts of the Coffee Industry Board - a publicStatutory Body - to raise the quantity and quality of production startedto show results and coffee production steadily increased from 18,500 bagsto 23,000 bags in 1964, out of which about 10,000 bags were exported in1961 and 13,500 bags in 1964. The Coffee Industry Board launched a CoffeeResuscitation Scheme in 1.963, under which prunirg equipment and free sup-plies of fertilizer are being made available to particpating growers whoagree to cut back unproductive trees. The net effect of this scheme andother extension efforts should be a steady increase in productionestimated to arrive at about 40,000 bags by 1970, out of wlici some 30,000bags could be exported. This expoit estimate is based on the expectationthat local sales will not rise beyond 9,000 bags following the implementa-tion of the Coffee Industry Board's plan to import some low quality coffeefor domestic consumption.

15. Except for the famous "Blue Mountain" coffee, the CoffeeIndustry Board is the sole buyer, processer and exporter of Jamaica'scoffee which adds strength to the organization of the industry. AlthoughJamaica is currently not a member of the International Coffee Organization,plans are afoot to Join the Organization, especially in view of the factthat coffee exports should soon exceed 25,000 bags. It is not expectedthat export quota provisions under the International Coffee Agreement wouldprevent Jamaica increasing its exports to about 30,000 bags by 1970.

16. Although the consumption of milk and miJ.k prod.ucts nearly dou-bled between 1956 and 1964, the volume of milk produced declined in thisperiod and home production has been falling steadily as a percentage oftotal milk consumed over these past eight years, from 58 percent in 1956to 33 percent in 1964, largely as a result of herd slaughtering, deficientdistribution conditions and unsatisfactory production practices. A cardi-nal goal of the Government's efforts to expand agriculture production is,therefore, to develop the local dairy industry. A long-term dairy programprovides for a doubling of present milk production by 1968 through estab-lishing annually 60 new farms averaging 25 acres as well as improving exist-ing farms ranging in size between 30 and 120 acres, by loans - through thevast network of commercial banks - for herd improvement and mechanical equip-ment, by the proper training of dairy farmers in a new Farmers' TrainingCenter and by improving distribution conditions. The program - which de-serves high priority - is part of a ten-year plan extending to 1973. Totalcosts of the first stage are estimated at about US$6 million for which theGovernment recently obtained a US$3.8 million loan from AID. The executionof this program should reduce imports of dairy products slightly from E3.5million in 1964 to L3.3 million by 1968. However, with an annual rise ofseven percent in demand for dairy products, domestic production should coverover 50 percent of domestic consumption by 1968, as compared to 33 percentin 1964.

17. In the 1959-1964 period, especially towards the end, total meatproduction lagged considerably behind the increase in consumption, largelybecause of Government policies to control prices at unattractive levels

and also because of ursatisfactory animal husbandry practices applied by thesmall farmers. Except for poultry - the production of which more thandoubled in five years, leaiding to the country's self-sufficiency inbroiler meat - meat imports as a percentage of domestic consumption rosef'rom 15 percent in 1959 to 23 percent in 1964 and are expected to rise to30 percent. in 1966, unless vigorous steps are taken to develop the couln-try's ample potential for the production of beef. Although significantquantities of beef will ultimately result from the expansion of the dairyindustry these will by no means reduce the need for formulating a beefcattle ex:pansion program aimed at reducing the country's deper.dency onimported meats.

A P P E N D I X 3

EXORT PROJFCTTONS 1965 - 1970

(Mission Estimates)

1. Export Prosegcts 1965 - 1970(estim.ated volume in thousands of long tons)

ACTUAL PP O J E C T E D1963 1964 1965 1966 1967 1968 1969 1970

Bauxite 5,162 5,967 6,500 7,000 7,500 8,000 8,500 9,000IAumina 725 768 780 820 840 860 880 880Sugar 1/ 400 424 435 445 455 465 475 485Coffee 2/ 12,788 13,478 17,000 20,000 23,000 26,000 29,000 31,000(Cocoa 1,245 1,442 3,000 3,40o 3,800 4,200 4,600 5,000Bananas 160 1714 210 215 220 225 230 235Citrus:Fresh

fruit 3/ 18,069 18,128 19,900 21,900 24,100 26,500 29,200 32,000Fruit

juices 4/ 1,701 1,83:3 2,000 2,200 2,400 2,650 2,900 3,200Essential

oils 5/ 211 181 200 220 240 265 290 320Marmalade

etc. 5/ 4,234 745 2,500 3,00 3,500 4,000 4,500 5,000

1/ Metric tons2/ Bags of 60 kilos3 1,000 packages4 1,000 gallons5/ 1,000 lbs.For explaiations see: Paragraphs 3 through 10 and Appendix 2.

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2. Export Prospects 1965 - 1970(Estimated value in millions of US$)

ACTUAL P R O J E C T E D1963 X 964 1965 1966 1967 1968 1969 1970

Bauxite 37.9 43.9 47.8 51.5 55.1 58.8 62.5 66.2Alumina 44.7 50.9 51.5 54.1 55.4 56.8 58.1 53.1Sugar 59.4 54.9 51.2 52.3 53.2 54.9 55.7 56.8Coffee 0.8 0.9 1.1 1.3 1.5 1.7 1.9 2.0Cocoa o.8 0.7 1.0 1.2 1.4 1.7 2.0 2.2Bananas 13.4 16.8 19.4 19.0 20.3 20.8 21.3 21.7Citrus 8.5 7.5 8.8 10.2 11.3 12.6 13.7 15.2

Fresh fruit 2.4 1.3 2.3 2.6 3.0 3.4 3.7 4.1Canned fruit 2.7 2.8 3.0 3.3 3.6 4.0 4.4 4.8Fruit Juices 2.6 3.0 3.0 3.6 4.0 4.4 4.8 5.3Essential

oils 0.5 0.4 0.4 0.5 0.5 o.6 o.6 0.7Marmalade

etc. 0.3 - 0.1 0.2 0.2 0.2 0.2 0.3

Trotal 165.5 175.6 180.8 190.5 198.2 207.3 215.2 222.2

Other 42.8 47.6 50.0 52.5 55.1 57.9 60.8 63.8of whichmanufactures 12.3 15.4 16.9 18.6 20.5 22.6 24.9 27.4

GRAND TOTAL 208.3 223.? 230.8 243.0 253.3 265.2 276.0 286.0

In millionsof Jamaicapounds 74.4 79.7 82.4 86.8 90.5 94.7 98.6 102.1

For explanations see: Paragraphs 3 through 10 and Appendix 2.

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Export projections of bauxite and alumina should develop asfollows:

BAUXITE ALUMI IA

Volume Price Exnort Volume Price Export(1,000 per ton Value 1,000 per ton Valuetons) (US $) (US $ tons) (US $) (US $

million) million)

1962 5,987 7.35 44.o 628 64.40 40.41963 5,162 7.35 37.9 725 61.60 44.71964 5,967 7.35 43.9 768 66.30 50.91965 6,500 7.35 47.8 780 66,00 51.51966 7,000 7.35 51.5 820 66.oo 54.11967 7,500 7.35 55.1 840 66.oo 55.41968 8,000 7.35 58.8 860 66.oo 56.81969 8,500 7.35 62.5 880 66.oo 58.11970 9,000 7.35 66.2 880 66.co 58.1

Kaiser Bauxite Company has a L10.5 million development plan under con-struction to develop bauxite reserves on the Morth Coast, Reynolds JamaicaMines Limited has announced plans to increase production by one milliontons, and Alcoa Minerals of Jamaica Inc. intends to increase productionby 500,000 tons shortly. The net effect of these expansions should leadto an increase of Jamaica's export potential from about 6 million tonsin 1964 to 9 million tons by 1970 which should yield - at the imputed 1/price of US",7.35 per ton -- about us$66 million in gross foreign exchangeearnings as compared to at)out us$44 million in 1964. In addition, AlcanJamaica Limited is presently carrying out part of its planned expansionof its alumina facilities which should lead to a 13 percent increase inproduction during the next; four years. Alumina exports, therefore, shouldrise to 880,000 tons by 1970 yielding US$58 million as ccmpared to US$51million in 1964, at the imputed price of us$66.00 per ton. The projectedrate of growrth in bauxite export volume from 1964 to 1970 is consistentwith the projected growth trend in US demand for aluminum (about 6.3%per year). The projection is subject to some uncertainty. Exports inthe base year (1964) include about 800,000 tons of bauxite (about 13%of total exports) destined for the US stockpile lmder contracts whichterminated this year with no prospect for renewal. This quantity couldeventually be absorbed by commercial channels (except if competitionfor the US market increases greatly) but there are some uncertaintieswith respect to the next one or two years. There is also a longer runfactor which could have some restraining effect on bauxite and alumina

1/ Bauxite exports constitute inter-company transactions. This exportprice is therefore used for assessment of income taxes only.

exports from Jamaica to North America: a major expansion for alamiuaproduction in Australia with the North American market as a leading tar-get. According to industry reports both Alcan and Kaiser are planningto ship alumina from Australia to supply their Pacific coast smelters.If this happens, substitute markets may be slow to develop since Jamai-can bauxite is reported to be comparatively high cost and the re-fineriesoutside North America have not had much exoerience in using it.

4. Jamaica's sugYar .ports should develop as follows:

UK-Negotiated Price Quota US-Jamaican Portion of West Indies Quota

Volume of Value per Total Volume of Value per TotalExports ton Export Exports ton Export

Year (000 metric (S) Value Year (000 metric (E) Valuetons) ( T mil.) tons) ( mil.)_

1965 221 46.57 10.3 1965 63 41.83 2.61966 221 46.57 10.3 1965 67 41.83 2.81967 221 46.57 10.3 1967 70 41.83 2.91968 221 46.57 10.3 1968 73 41.83 3.11969 221 46.57 10.3 1969 76 41.83 3.21970 221 46.57 10.3 1970 79 41.83 3.3

CANADA UK - Free IMarketVolume of Value per Total Volume of Value per Total Value ofExports ton (:) Export Exports ton (E) Export Total

Year (000 met- Value Year (000 me-t- Value Sugar ex-ric tons) {E mil.) ric tons) (T. mil.) ports from

Jamaica(;, mll1ion)

1965 °5 38.18 3.6 1965 56 31.49 1.8 18.31966 100 38.18 3.8 1966 57 31.49 1.8 18.71Q67 l06 38.18 4.0 1967 58 31.49 1.8 19.01968 112 38.18 4.3 1968 59 31.49 1.9 19.61969 118 38.18 4.5 1969 60 31.49 1.9 19.91970 :125 38.18 4.8 1970 60 31.49 1.9 20.3

a) Jamaican exports to the United Kingdom are regulated by theConmonwealth Sugar Agreement. In fact, Jamaica, for the operations ofthe Commonwealth Sugar Agreement, is a member of the British West IndiesSugar Association. The Sugar Association has been allocated an overallagreement quota, which it distributes among its members. Until the endoI 1964, part of this overall agreement quota consisted of the negotiatedprice quota, which the Ulnited Kingdom undertakes to purchase and the members

agree to sell at prices which are negotiated annually and fixed at levelsconsidered to be "reasonably reiaunerative to efficient producers,"usually above the free world marlket price. Prior to 1965, the negotiatedprice quota was related to the consumption trend in the TK. Whenever sugarconsumption increased beyond 2.5 million tons, the negotiated price quotawas increased by the amount of the percentage increese and was similarlyreduced when consumption went down. This is no longer trive. It has beendecided that from 1965 onwards the negotiated price quota of the UK marketwill remain at the present level. This quota for the West Indies has beenfixed at 737,000 metric tons, which will not be subject to any changes.Jamaica's share in the total West Indies negotiated price quota in 1964amounted to 30 percent. Jamaica's future share in the next five years,therefore, will remain at 221,000 metric tons. The f.o.b. Jamaicannegotiated price for the UK throuighout the entire period is likely to bethe same as the average '"purchase price" for 1957-1963, i.e. f44.07 p2-us13.25 per long ton, or B46.57 per metric ton. Jamaican exports of sugarunder this quota should remain at 110.3 million for the years 1965-1970.

b) Allocations under the US Sugar Act have been made to the BritishWest Indies Sugar Association since 1960, when they began to have a signi-ficant share in the US mark5|et. In the years 1960-i964, total British WestIndies imports into the US market averaged 149,000 metric tons annually, ofwhich Jamaica supplied 48 percent, or 72,000 metric tons. Under the pro-posed US legislation presently before the Congress, British "Test Indies'share for 1965 has been determined at 131,000 metric tons. On the basisof the 1960-1964 share of Jamaica in the West Indies quota, it would pro-bably receive a share of' no less than 48 percent, which would amount to63,000 metric tons in 1965. With US consumption of sugar expected to in-crease to 10.5 million short tons by 1970, Jamaica's share - based on the1960-1964 average - could approach 79,000 tons by 1970. Throughout theentire period, the US market price is assumed to remain at US¢5.3 per lb.,or L41.83 per metric ton. The value of Jamaica's sugar exports to theUS market, therefore, could rise from M2.6 million in 1965 to B3.3 millionby 1970.

c) Under the Commonwealth Sugar Agreement, free quota deliveries canbe made to the United Kingdom and Canada. The free auota is the differencebetween the overall agreement quota and the negotiated price quota. Sulchsugar deliveries are purchased at the free world market prices, but receivetariff preference in the UK and Canada. In addition, the UK makes cashpayments for certified colonial preference, which is distributed over thetotal negotiated price quota. Jamaican exports on "free quota" in 1964amounted to 43,000 metric tons, i.e. about 16 percent of all deliveriesto the UK market. On the basis of past performance, Jamaica would havea share in the free market of the UK not exceeding 60,000 metric tons by1970. These exports are sold at prices which are based on the free worldmarket price and are estimated to remain at US¢4 per lb. or .,31.49 permetric ton throughout the entire period. The value of these exports, there-fore, should rise only slowly from L1.8 million in 1965 to bl.9 millionby 1970.

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d) Jemaican exports to Canada were restricted until the end of 1961by the International Sugar Agreement. However, in 1962 the export controlprovisions of the agreement were abandoned and are not lilcely to be reintro-duced. Jamaica should be able to maintain its average 1959-1964 share ofabout 14 percent of Canadian sugar consumption. This would amount to a-totual export volume of about 95,000 metric tons in 1965, thereafter risingto 125,000 metric tons. Under the Canadian preferential tariff for sugarCanadian importers purchase sugar at the free world market prices plusfull duty but a rebate is made of about b6.80 per ton to the Commonwealthexporters. For the years 1965-1970, the Caradian market price would, there-fore, be near the free world market price of T31.h19 per ton, plus a rebate,which would on 1962 basis, be L6.69 per metric ton. With the volume ofexports to Canada estimated to rise from 95,000 metric tons in 1965 to125,000 tons by 1970, and at the price of T38.18 per ton, the value of sugarexports should rise in the 1965-1970 period from L3.6 million to T4.8million.

e) The total value of Jamaica's sugar export, therefore, shouldrise frcm 1l8.2 million in 1965 to 120.3 million by 1970.

5. Banana exports are projected as follows:

Export Tonnage(1000) Greenboat Net Earnings-/ et Export Ear ngsPrice (E) per ton (E) million B million t

1962 146 62.35 30.90 4.5 12.61963 160 62.43 30.28 4.8 13.41964 174 65.18 34.74 6.o 16.81965 210 60.00 33.00 6.9 19.41966 215 60.00 33.00 7.1 19.91967 220 60.00 33.00 7.3 20.31968 225 60.00 33.00 7.4 20.81969 230 6o.oo 33.00 7.6 21.31970 235 60.00 33.00 7.8 21.7

1/ 55 percent of Greenboat price for 1965-1970.

Jamaica is a high-cost banana producer. It will be difficult for Jamaica tomarket bananas outside the United Kingdom where it enjoys preferential treat-ment, unless production costs diminish. Consequently, export projectionsare based entirely on the prospects for increasing shipments to the UnitedKingdom with only marginal quantities going elsewhere. Per capita consump-tion of bananas in the United Kingdom is not expected to rise unless theprice of bananas in the United Kingdom is allowed to fall by removing importrestrictions. Such a course could, however, be detrimental to the interestsof Jamaica. Exports, therefore, should rise from 210,000 in 1965 to235,000 tons by 1970, yielding US$21.7 million as compared to US$19.4million in 1965.

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6. Exports of citrus products should develop as follows:

a) Volume of exports of fresh citrus and citrus nroducts

Fresh Fruit Canned Fruit Fruit Juices Essential Irma1ade,Year oils pulp, -eel.

1,000 pkg. 1,000 lbs. 1,000 gals. 1._Olbs. 1,000 lbs.

1958 192 9,091 1,245 165 3,228

1959 121 8,822 980 192 1,359

:1960 194 12,216 1,557 210 1428

1961 256 16,899 1,156 234 2,163

1962 299 15,728 1,353 252 848

1963 488 18,069 1,701 211 3,123

1964 278 18,128 1,833 181 745

P R 0 J E C T E D

1965 500 19,900 2,000 200 2,500

1966 550 21,900 2,200 220 3,000

1967 605 24,100 2,400 2140 3,500

1968 670 26,500 2,650 265 4,000

1L969 735 29,200 2,900 290 4,500

1970 810 32,000 3,200 320 5,000

b . Value o r exports of Fresh Fruit, Canned Fruit and Fruit Juices

Freshl Fruit Canned Fruit Fruit JuicesTotal export value Price Total Export Value Price Total Export Value Price1,000 1,000 per 1,000 1 ,000 per 1,000 1,000 per

I us$ pkg. B US$ lb. 1 US$ gal.(us$) (usO) (us$

1958 276 773 4.03 505 1,414 16 823 2,304 1.851959 177 496 4.10 501 1,403 16 727 2,036 2.081960 294 823 4.24 788 2,206 18 1,144 3,203 2.061961 382 1.070 4.18 856 2,397 14 660 1,848 I 6o1962 443 1,240 4.15 789 2,209 14 625 1,750 1.291963 842 2,358 4.83 947 2,652 15 931 2,607 1.531964 453 1,268 4.56 997 2,792 15 1,082 3,030 1.65

P R 0 J E C T E D

1965 803 2,250 4.50 1,o66 2,985 15 1,178 3,300 1.651966 932 2,610 4.75 1,173 3,285 15 1,296 3,630 1.651967 1,080 3,025 5.00 1,291 3,615 15 1,414 3,960 1.651968 1,196 3,350 5.00 1,419 3,975 15 1,562 4,375 1.651969 1,312 3,675 5.00 1,564 4,380 15 1,709 4,785 1.651970 1,446 4,050 5.00 1,714 4,800 15 1,885 5,280 1.65

c) Exports of Essenti-al Oils, Marmalade ru_p, plan total citrus exports:

Essential Oils Marmalade,pulp,peel TOTALYear Total export value Price Total export value Price Total export value

1,000 1,000 per 1,000 1,000 per 1,000r US$ lb. US$ lb. L us$

(us$) (us})

1958 161 451 2.73 108 302 9 1,872 5,2441959 143 400 2.08 42 118 9 1,59]. 4,4551960 162 4 14 2.16 14 39 9 2,402 6,7261961 129 361 1.54 66 185 9 2,093 5,8601962 129 361 1.43 27 76 9 2,013 5,6361963 164 459 2.18 89 249 6 2,973 8,3241964 138 386 2.13 10 28 4 2,680 7,504

P R O J E C T E D

1965 150 420 2.10 45 125 5 3,425 9,0801966 165 460 2.10 54 150 5 3,619 10,1351967 179 500 2.10 62 175 5 4,003 11,2101968 196 550 2.10 71 200 5 4,446 12,14501969 218 610 2.10 80 225 5 14,883 13, 751970 240 670 2.10 90 250 5 5,375 15,050

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In line with the prospjective increase in citrus production - which shouldrise by about 10 percent annually in the 1965-1970 period - exports ofcitrus and citrus products should go up from US$9 million in ]965 to US$15million in 1970, an increase of about 65 percent, assuming that prices forfresh fruit gradually rise from $4.50 per package to $5.00 per package asa result of quality improvenents, and that prices of canned fruit, fruitJuices and essential oils remain at the 1964 level and that prices fornarmalade, pulp and peel remain at US¢5 per lb. during the 1965-1970 period.A major accomplishment has been that the Citrus Growers' Associations ofJamaica and of Trinidad and Tobago signed a ten-year agreement in January1964 with the Florida Citrus Industry and a firm of distributors in theUnited Kingdcm under w-hich frozen orange juice concentrate from Jamaicaand Trinidad will be marketed in the UJnited Kingdom without quantitativelimit, and will have priority of sale over the similar product from the USA.However, these projections assume quality improvements to continue, so thatJamaica can continue to compete successfully with Brazil, British Honduras,the United States and the Mediterranean countries.

7. Exports of coffee should develop as follows:

Volume of Local Sales 'Jolume of Unit price Value ofYear Production (bags of exports per lb. exports

(bags of 60 kilos) (bags of (US $) (US$ million)60 kilos) 60 kilos) _ _

1965 26,ooo 9,000 17,000 40.o 1.11966 29,000 9,000 20,000 40.o 1.31967 32,000 9,000 23,000 40.0 1.51968 35,000 9,000 26,ooo 40o. 1.7a1969 38,ooo 9,000 29,000 40.o 1.91970 4o,ooo 9,000 31,000 40.o 2.0

Except for the famous "Blue Mountain" coffee, the Coffee Industry Boardis the sole buyer, processor and exporter of Jamaica's coffee. AlthoughJamaica is currently not a member of the International Coffee Organiza-tion, plans are afoot to join the Organization, especially in view of thefact that coffee exports should soon exceed 25,000 bags. It is not ex-pected that export quota provisions under the International Coffee Agree-ment would prevent Jamaica from increasing its exports to 31,000 bags by1970. With an assumed price of US$0.40 per pound the value of coffee ex-ports should rise from US$0.9 million in 1964 to US$2.0 million by 1970.

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8. Eports of cocoa should develop as follows:

Volume of Volume of Estimated Value ofYear Exports Exports price per lb. Exports

(tons) ('000 lbs) (uS$) (US$ million)

1965 3,000 6,720 0.15 1.01966 3,4oo 7,616 0.16 1.21967 3,80C 8,512 0.17 1.41968 4,200 9,408 0.18 1.71969 4,600 10,304 0.19 2.01970 5,000 11,200 0.20 2.2

The efforts of the Cocoa Industry Board to raise the quality of cocoaproduction, to improve yields and to expand the acreage under cultiva-tion rapidly, should lead to a rapid rise in production and exports, pro-vided that Jamaica will continue to be able to comnand premium pricesover Ghana cocoa in the years ahead. Exports, therefore, should riserapidly to 3,000 tons in 1965, thereafter to about 5,000 tons by 1970,yielding, with prices expected to rise from TS$0.15 per lb. in -965to US$0.20 per lb. by 1970, US$2.2 million in 1970, as compared to US$0.7million in 1964.

9. Exports of manufactured products should rise by an annual 10 percentduring the period 1965-1970 following the execution of a substantialamount of industrial projects currentlUr under consideration by the Ja-maica Industrial Development Corporation. Exports of other products,therefore, which also include pimento, ginger, etc., should rise fromUS$47.6 million in 1964 to US$63.8 million by 1970.

10. On the basis of the above-presented analysis, Jamaica's totalexports during the 1965-1970 period should rise by an annual 4.3 percentfrcm US$223.2 million in 1964 to US$,286.0 million by 1970.

Appendix 4

JAMAICA: BALANCE OF PAYMENTS PROJECTIONS 1965 - 19Ju(millions of Jamaica pounds)

A c t u a 1 P r o j e c t e d

1962 1963 1964 1965 1966 1967 1968 1969 1970

1. CU.RR-E:JT ACCOUNTGOODS

-7- f o7 f 7 747 . 80 970 95.0 99.0 102.cImports f.o.b. 68.9 71.1 88.5 93.8 99.4 105.4 111.7 118.4 125.5

Balance on Goods -3.2 3.3 -8E -11. 5 -12.4 -14.4 -16.7 -19.4 -23.-,

SERVICES -6.1 -6.9 -9.4 -8.0 -8.0 -7.9 -7r7 77.5 -.7.2Merchandise Freight and Insurance -. 87 -11.9 -T2@ -73IT -1T41 -T 5I0v;Other Transportation 1.4 1.7 1.6 1.8 2.0 2.2 2.4 2:6 2.EForeign Travel 10.1 10.2 11.4 14.5 16e0 17.6 19.4 21.3 23.4Investment Income -12.6 -13*1 -14.4 -15.4 -16.4 -17.4 -18.4 -19.4 -20.5Other Services 3.7 3.1 3.2 3.0 3.0 3.0 3XO 3.0 3.C

Balance on Goods and Services -9.3 -3o5 -18.2 -19.5 -20.4 -22.3 -24.4 -26.9 -30.7Unilateral Transfer 6.7 6.7 6.1 6.0 6.O 6.0 6.0 60 6.cCURR[ENT ACCOUNT BALANCE -2.6 3.2 -12.1 -13.8 -14.4 -16.3 -18.4 -20.9 -24-7

2. CAPITAL ACCORNT 13 7.1 11.3 13e5 15.5 17.0 18-5 21.0 21*5Official Longterm 57 2.2 4@1 3 5.0 ZT77 -?7 6gPrivate Longterm 5.7 9.5 0.7 7.0 8.0 8.5 9cO 9c5 10.0Private Short term -5.2 -4.6 6.5 3.0 3.5 4.0 4.5 5.0 5.5

3. NET ERRORS Ad\!D OMISSIONS 2.0 -1.1 0.2 7 _ - -- --

4. CHANGE IN RESERVES(Increase -) -0.6 -9.2 0.7 0.3 -1.1 -0.7 -0.1 -041 3.2

Source: Ministry of Finance and mission estimates.

A P P E N D I X 4

1. Merchandise exports are projected to grow at an annual averagerate of 4.3 percent. See Appendi.-; 3 for deta'led export projections.

2. Merchandise jmports are projected to rise by an annual 6 per-cent on the basis of the estimated import comconent of projected totalinvestment, the rise in industrial and agricultural output and the in-crease in demand for imported consumer goods restulting from the expected' percent annual rate of growth in GDP. This projection incorporates es-timates as to the prospective substitultion of imports.

3. Merchandise freight and insurance payments are expected to increasein line with imports. Payments are projected to account for 12.6 percent ofthe FOE value of imports and are based on present freight rates and insurancepremiums.

4. Other tranportation includes port charges and passenger fares.Port charges are projected on the basis of expected volume of Jamaica'sexternal trade (excluding bauxite and alumina). Passenger fares are com.-l.u-ted on the basis of estimated travel by Jamaicans abroad.

Projections of foreign travel receipts include an e-pected lo per-cent annual increase in tourist earnings. Foreign travel payments are alsopro4ected to increase by an annual 10 percent.

6;. Investment Income Payments consist mainly of corrective entriesincluded to assess the net contribution of exports of bauxite and aluminato the Jamaican reserves of foreign exchange. The remainder consists of"investment income payments proper" and interest payments on Jamaica's ex-ternal debt. Corrective entries for bauxite and alumina exports are basedupon the protected rise in exports for the 1965-1970 period. Interest pay-ments on Jamaica's external debt are projected on the basis of interestpayments on the debt already contracted and on the amount of external debtJwaaica is likely to contract within the next 4 years. "Investment incomepayments prope;-" are protected to rise substantially during the next fiveyears following the increase in foreign private investment in Jamaica.

7. Other Services include non-merchandise insuirance, estimatedexpenditures of Jamaican farm workers in the U.S., Government contributionsto the University of the West Indies and income of' Jamaican farm workersin the U.S. For the 1905-1970 period a positive balance of L3 million islikely to prevail.

el. Transfer payments are likely to remain at the L6 million levelduring the 1965-1970 period. They include remittances from Jama-can emi-grants, principally in the U.K., that may diminish somewhat because of thereduced prospective rate of emigration. However, the reduction should becompensated by increasing official transfers.

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9. The inflow of o.fi'cial long._er S capatal is expected to risegradually f'rom L3.5 million in 1965 to L6 million by 1970. These estimatescre based on likely disbursements on project loans already contracted andon project loans likely to be contracted in the years ahead. They alsoinclude an estimate of the arount which the Jamaican Government may be ableto borrow in the private capital markets ab'oad. The latter estimate pre-supposes that the Jamaican Government will be able to make regullar ap-proaches to the private markets abrcad. The overall estImate takes intoaccount repayments of principal of Jamaica's present public external debtand repayments of the public debt that is likely to be contracted in thenext 5 years.

10. Private Tong-term captl inflows are expected to rise from17 million in 1965 to 110 million by ].970. Tnese estimates are basedupon the 'Likely prospective high level of foreign private investment inJ.amaica in the bauxite-alumina industry, industry, electric power, ports,and telecommunications.

11l. Private short-term caiJtal inflows should rise from L3 mil'ioni'n 1965 to L5.5 million by 1970. It is expected that the commercialbanks will continue to finance part of their credit expansion in Jamaicat,hrough borrowing in London. In addition, it is likely that the inflowof private long-term capital will be accompanied by inflows of short-term capital to cover part of the working capital requirements of foreigncompanies operating in Jamaica.