amaica’s economic freedom score is 69.0, making its economy the J 45th freest in the 2021 Index. Its overall score has increased by 0.5 point, primarily because of an improvement in judicial effectiveness. Jamaica is ranked 5th among 32 countries in the Americas region, and WORLD RANK: REGIONAL RANK: its overall score is above the regional and world averages.
45 5 Jamaica’s economy remains in the moderately free category where it has
ECONOMIC FREEDOM STATUS: been since the inception of the Index in 1995. Progress toward greater MODERATELY FREE economic freedom would require clear government action to strengthen financial freedom, reform and update the judicial system, and pursue a vigorous anticorruption agenda.
IMPACT OF COVID-19: As of December 1, 2020, 258 deaths had been attributed to the pandemic in Jamaica, and the economy was forecast to contract by 8.6 percent for the year.
ECONOMIC FREEDOM SCORE
69.0 ▲ UP 0.5 POINT
0 50 60 70 80 100 REGIONAL AVERAGE WORLD (AMERICAS REGION) 59.5 61.6 AVERAGE
HISTORICAL INDEX SCORE CHANGE (SINCE 1995): +4.6
RECENT FREEDOM TREND QUICK FACTS
POPULATION: UNEMPLOYMENT: 2.9 million 8.0% 69.5 69.1 69.0 68.6 68.5 GDP (PPP): INFLATION (CPI): $27.9 billion 3.9% 1.0% growth in 2019
5-year compound FDI INFLOW: $665.4 million annual growth 1.2% $10,166 per capita PUBLIC DEBT: 91.9% of GDP
2019 data unless otherwise noted. Data compiled as of September 2020
BACKGROUND: English planters seized Jamaica from Spain in 1655 and established a plantation econ- omy based on slave labor. The island gained independence from the United Kingdom in 1962. In August 2020, incumbent Prime Minister Andrew Holness was elected to his third nonconsecutive term in early elections, and his center-left Jamaica Labour Party won 49 of 63 parliamentary seats. The international Financial Action Task Force placed Jamaica on a small list of countries requiring increased oversight to fix weaknesses in its anti–money laundering and anti–terrorism financing capabilities. Long-standing recurrent violence among powerful organized crime networks that are involved in illicit drug and arms trafficking (and are also affiliated with major political parties) is an ongoing problem.
238 2021 Index of Economic Freedom WORLD AVERAGE | ONE-YEAR SCORE CHANGE IN PARENTHESES 12 ECONOMIC FREEDOMS | JAMAICA
RULE OF LAW GOVERNMENT SIZE
(–1.5) (+4.6) (+0.9) (–0.3) (–0.4) (+2.9)
60.6 55.1 47.7 79.7 74.4 83.1 Property Judicial Government Tax Government Fiscal Rights E ectiveness Integrity Burden Spending Health
Secured interests in property are enforced, but bureaucratic The top individual income and corporate tax rates are 25 delays make the registration of property difficult. Nearly percent. Other taxes include property transfer and general 20 percent of Jamaica’s people live as squatters, mostly on consumption taxes. The overall tax burden equals 27.9 public lands. The judicial system is fair, but its inefficiency and percent of total domestic income. Government spending has large backlog of cases weaken the rule of law. Corruption, amounted to 29.2 percent of total output (GDP) over the past often linked to organized crime, is one of the root causes of three years, and budget surpluses have averaged 0.6 percent Jamaica’s high crime rate and economic stagnation. of GDP. Public debt is equivalent to 91.9 percent of GDP.
REGULATORY EFFICIENCY OPEN MARKETS
(–0.1) (–0.6) (–0.2) (+0.8) (No change) (No change)
77.6 73.4 77.5 69.2 80.0 50.0 Business Labor Monetary Trade Investment Financial Freedom Freedom Freedom Freedom Freedom Freedom
The entry costs of starting a business in Jamaica are low, Jamaica has two preferential trade agreements in force. The and the process generally takes only two days. The labor trade-weighted average tariff rate is 10.4 percent, and five force participation rate declined in 2019. Tourism accounts nontariff measures are in effect. Jamaica is relatively open to for about 20 percent of GDP, and remittances account for foreign investment, but state-owned enterprises distort the approximately 14 percent of GDP. The government continues economy. High financing costs hamper private-sector growth. to subsidize medications and health care through the National About 80 percent of adult Jamaicans have an account with a Health Fund and regulates utility prices for water, electricity, formal banking institution. and telecommunications services.
The Heritage Foundation | heritage.org/Index 239