P ReportN 0. EA-69-a Public Disclosure Authorized This report was prepared for use within the Bank. In making it available to others, the Bank assumes no responsibility to them for the accuracy or completeness of the information contained herein. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Public Disclosure Authorized JAMAICA - MISSION REPORT Public Disclosure Authorized March 5, 1957 Public Disclosure Authorized Department of Operations Europe, Africa and Australasia CURRENCY EQUIVALENTS 1 Jamaican Pound = 1 Pound Sterling f1 = U.S. $2.80 f 1 Million . U.S. $2.8 million REPOqT uF T-7 ,ISIOE TO JAURICA Page I. Introduction - Purpose of the .ission ............... 1 II. Political and Constitutional Position - Federation of the British Uest-Indies ............... 1 III. Economic Situation ................................. 4 iain Agricultural Exports Tourist Trade Bauxite Importance of 3auxite Revenues to the 3udvet IV. The Develolment Pro,ra, ................. ....... 8 The Programi and the Creditworthiness of the Government V. Possible Projects ................................... 11 1. The Jamaican Governient Railuay 2. The Fort of Kingston 3. Electric -swer 4. Airports 5. Other Projects in the Developent Program 6. Import Requireaents VI. The U.K. Colonial Loans Act ......................... 17 VII. Conclusions .............................. ....... 17 JAMAICA Taoic Dohta Area: 4,400 square miles Population: 1.5 million National income (1952): 906 million Income per head: N6 = ($168) Origin of Gross Donestic Product (1952) 1 Nillion Agriculture, (including forestry, fishing and mining) 25.8 116 Manufacturing Construction 10,3 Electricity, gas, water, etc. 0.9 5.6 Transport and communications Commerce 15.5 2.2 Banking, insurance and real estate 4.6 Ownership of dwellings 6,0 GovernDent, central and local 12.4 Services Total 94.9 & 9.6 million Net Capital Formation 19t0 1952 1955 (L million) 34.4 Total Exports (f.o.b.) 11.4 18.6 Of which, sugar 3.9 7.7 10.8 bananas 2.3 1.9 5.0 bauxite - 0.4 9.0 Imports (c.i.f.) 19M7 36.4 45.7 (1954) Volume of exports 100 115 186 Volume of imports 100 129 137 (1954) Export prices 100 134 138 (1954) Government Budget - Estimates 1956/57 Million General revenue 19.3 Of which customs and excise 11.2 direct taxes 4.7 Extraordinary receipts 1.3 Total revenue 20.6 Government Budget - Estimates 1956/57 (cont'd) T Million Ordinary expenditures 18.7 Expenditure from loans and development funds 6.2 Public Debt I Million External debt 11.4 Local debt 7.9 Total 19.3 76° 76° REYNOLDS METALS CO HARBOR 1NSTALL£AT1ON CABLEWAY Falmoutth BAUX/TE PROCESS/NG PL ANT Montego BayS s Cabe ALUMAINA JAMA/CA LTO PROPOSE NEW PLANT ..... .... .... .T R E L A W N Y ..... S T A N N ST M A RY Annotto Bay .-- ····...... So PO T L0 Por.o Black ' ever Townvingsto Mondev.lle.ST.CATH.RINE..'---......---...-.. ... MAnhoone p.ish ST ANDR BAUX/E PROESSINH oll HARBOR,T RINSTALL....TION.. 0c5 STT OM S AS M E R E N D6W PAr' c,A E LSi ZABLE ··. 8S0T Bo /HW RSho'oPers 8°- Hil.. C AS E D 41~AN RHllI'--W--S HIGHWAYSNDRE ALUM/cV JAMAeC LTDt SPU A cAL R AIL WAY IOU r PA IS DAEE ······---- · ···· /V~~~ ~ ~~ HASO INTLAI BoI ý MARCHV 957IC TB°2 JBRD-AIC6 REPORT OF THE MISSION TO JAEAICA I. INTRODUCTION - PURPOSE OF THE MISSION 1. The mission to Jamaica took place as a result of two visits to the Bank in the summer of 1956 by Mr. N%.N. Nethersole, the Jamaican Minister of Finance. Mr. Nethersole wished to discover whether the Bank would con- sider financial assistance for the Jamaican development program which was then in the course of preparation by his government. The projects which he thought might be most suitable for the Bank were the improvement of the Jamaican Railway and of Kingston harbour. It was decided to send an explora- tory mission to Jamaica to study the general situation of the economy and the development program and to take a first look at the harbour and railway problems, even though it was known that the proposals for improving them might not have reached a stage when they could be examined as a basis for a loan application. The mission consisted of Mr. J. H. Collier of the Department of Operations, Europe, ?frica and Australasia, and Messrs. H.J. van Helden and T. Finsaas of the Technical Operations Department. 2. Just before the mission's departure Mr. E. R. Richardson, Financial "ecretary of the Jamaican Government, paid a visit to the Bank during which he said that the Government might have to find additional capital to finance electric power expansion. No provision had been made for this in the develop- ment program since the program is concerned only with public investment while electric power is supplied by a private company. Although the mission was n#ot to include a power expert, it was authorized to discuss this matter in general terms in Jamaica. II. POLITICAL AN CONSTITUTIONAL POSITION - FEDERATION OF THE WEST INDIES 3. Jamaica is a British Colony in which the process of achieving self- government is by now virtually complete. The bulk of the population of 1.5 million are negroes, but there is a small group of white residents consisting largely of sugar planters, agricultural estate owners, businessmen and pro- fessional people. In addition there is a substantial "middle class" of people of mixed ancestry who form a link between the black at one end and the white at the other. This group has supplied most of the political leaders and its members have now almost completely replaced British expatriates in the civil service. 4. The modern movement towards self-government in Jamaica began in the depression when Alexander Bustamante organized the sugar workers into the Bustamante Industrial Trade Union. Economic distress and unemployment in the West Indies was so great that the British Government established a Royal Commission to make an investigation. Its report was one of the more important factors leading the U.K. Government towards a policy of stimulating economic development in the Colonies by means of financial assistance, first expressed in the Colonial Development and lelfare Act of 1940. - 2 - 5. During the war and the postwar period economic conditions in Jamaica improved. At the same time more power was gradually handed over to the local population. Bustamante organized the Jamaica Labor Party which, supported by his Trade Union, maintained him as the most important political leader until early 1955. 6. The opposition to the Jamaica Labor Party was provided by the People's National Party led by Norman Washington Manley, a London educated lawyer. These two parties competed for a majority in the wholly elected House of Representatives. The P.N.P. is a "left-wing" party which gains much of its inspiration from the British Labour Party. In practice its policy seems to be "economic development and as much of the welfare state as can be safely afforded". This party won its first general election in early 1955 and the reaction of local businessmen towards it has on the whole been favorable. They felt that its leaders were able men who were making a sincere effort to cope with the island's problems. There has, for example, been no talk so far of nationalizing anything. 7. There is almost no "racial problem" in Jamaica. The explanation of this is probably complex but it may well be largely due to the smallness of the white population which made it unrealistic for it to attempt a monopoly of political power. Moreover, the existence of a substantial class of mixed ancestry made it impossible to draw any firm lines. This does not mean that there is no consciousness of color in Jamaica; there is, but it seems to have been transmuted into a matter of social prestige rather than a discriminatory bar. It lacks the explosive potential which so often causes unrest in, for example, Africa or even in some other parts of the West Indies. 8. This fact is probably connected with another characteristic of the Jamaican situation; namely, the comparatively minor role played by the desire for self-government. As there has been no doubt that self-govern- ment would be achieved in the end, the only question was one of the approp- riate speed and on this point no major disagreement has arisen between the Jamaicans and the British. The movement towards Dominion status now concerns the new Federation of the 'est Indies rather than Jamaica alone. Mr. Manley has talked about dominion status in five years; it does not appear, therefore, that there will be any great hurry. 9. At the present moment the authority of the People's National Party is limited only by the Governor's reserve powers and the British Government's responsibility for external affairs and defence. Just recently, with the appointment of a Jamaican to be Financial Secretary (a position corresponding to the permanent head of the Treasury), local responsibility for financial matters became complete. The two party system and the existence of a middle class has brought a large measure of stability to the Jamaican political arena. It is safe to say that Jamaica's fundamental problems are economic rather than political. - 3 - 10. The new Federation of the West Indies is to include Jamaica, Trinidad and the smaller British lest Indian islands, with the exception of the Virgin Islands. It is expected to come into operation sometime this year and the first Federal elections are scheduled for early 1958. In its early years the authority of the new Federal Government of the British West Indies will be limited and it will be financed by a levy upon the units.