COUNTRY ASSISTANCE STRATEGY (2010-2014)

Introduction: The Country Context Relevant political, economic, security, environment and social trends: Located on the United States' third border, Jamaica's interaction with our country is deep and continuous. Approximately 1.5 million people of Jamaican extraction live in the United States, more than half of Jamaica's current population. Three million people travel between our two countries each year, including over 2 million U.S. citizens traveling to Jamaica. The Mission protects and serves more than 3.5 million U.S. citizens visiting Jamaica and the Cayman Islands annually as well as 20,000 American citizens who reside in Jamaica and the Cayman Islands full time. Jamaica's economic performance has oscillated over the past few decades. Reforms initiated in the 1980s diversified the country's economic and export base, increasing the share of nontraditional exports until a lack of competitiveness and the steady decline of the garment sector stalled the diversification process after the mid-1990s. Bouts of macroeconomic instability during the 1990s prompted demand management measures, led by monetary contraction. Tight monetary policy helped to slow inflation and stabilize Jamaica's exchange rate, but resulted in high interest rates, stymied growth, and high fiscal deficits (largely due to an increase in debt servicing costs). Debt service and personnel costs leave less than 15% of the budget available for government operating costs and capital expenditures in health, education and infrastructure. In September 2007, the island's political landscape changed dramatically when Prime Minister (PM) Bruce Golding's Jamaica Labor Party (JLP) won national elections after 18 years in opposition. The Government of Jamaica (GOJ) is constrained by a lack of resources, anemic economic growth, high unemployment and inflation, and a debt-to-GDP ratio of 126%. Progress on debt repayment and modest budgetary efficiencies is stymied by recent recurrent natural disasters as well as catastrophic increases in global food and fuel prices. With over 1,400 murders committed since January 2008 (including 77 children), the high levels of violent crime compounded by deep and entrenched corruption also pose severe threats to stability in Jamaica. The new government has appointed energetic reformers to key positions and placed critical champions of national integrity in important agencies. With the help of foreign experts and public opinion increasingly intolerant of high-level corruption, these reformers are beginning to use their legislative and statutory authority to act as change agents in a country long accustomed to "business as usual". There is concern that as security is tightened in Mexico and Central America that narcotics traffickers will view the Caribbean as an exploitable weak link in the drug and larger governance enforcement chain in the Americas. Efforts to clean up ghost employee and sub rosa procurement mechanisms have resulted in at least one well-publicized assassination. State and society appear to be reaching a new tipping point: either they go forward with new energy not seen thus far or continue to tolerate the presence of rogue elements within the state, which will inevitably lead to criminal networks penetrating and weakening the justice system, government and the political process; a condition that could eventually lead to the demise of the state.download