JAMAICA

Economic Freedom Score

25

World Rank:

48

Regional Rank:

Least
free 0

economic freedom score is 67.7, making its econoJbyamaicas

my the 48th freest in the 2015 Index. Its score has increased
1.0 point since last year, reflecting gains in five of the 10

50

75
Most

100 free

67.7

Freedom Trend
69

economic freedoms, including freedom from corruption, fiscal freedom, and the management of government spending,
that outweigh a decline in monetary freedom. Jamaica ranks
9th out of 29 countries in the South and Central America/
Caribbean region.

Action to correct terms of trade issues and poor fiscal policy

has helped Jamaica to improve its overall economic freedom
score over the past five years. Since 2011, economic freedom
on the island has improved by 2.0 points, led by advances in
five of the 10 economic freedoms including freedom from corruption, the management of government spending, and fiscal
freedom. In the 2015 Index, Jamaica has achieved its highest
economic freedom score ever.
However, the foundations of economic freedom in Jamaica
are still weak. Corruption is common, and the rule of law is
weakly enforced. Violence related to the drug trade has been
prevalent. Jamaica scores only about average on trade and
financial freedom, a serious problem for an island nation
dependent on imports for basic goods and fuel.
BACKGROUND: Prime Minister Portia Simpson-Millers Peoples National Party was re-elected in December 2011 with a
large parliamentary majority. Simpson-Miller has maintained
market-friendly policies, but high interest rates and government debt burden the economy. A $1.27 billion standby agreement with the International Monetary Fund signed in 2010
required a commitment to major fiscal reforms that have
been slow to materialize. An extended IMF agreement was
approved in 2013. Most foreign exchange comes from remittances, tourism, and bauxite production, all of which declined
sharply during the 2009 recession and have not recovered.
Unemployment remains high, particularly in the formal sector. Services account for more than 60 percent of GDP. Jamaica is a member of the Venezuela-led Petrocaribe oil alliance.

How Do We Measure Economic Freedom?

See page 475 for an explanation of the methodology

or visit the Index Web site at heritage.org/index.

68
67
66
65
64

2011

2012

2013

2014

2015

Country Comparisons
67.7

Country
World
Average

60.4

Regional
Average

59.7

Free
Economies

84.6
0

20

40

60

80

100

Quick Facts
Population: 2.8 million
GDP (PPP): $25.2 billion
0.5% growth in 2013
5-year compound annual growth 0.7%
$9,048 per capita
Unemployment: 15.0%
Inflation (CPI): 9.4%
FDI Inflow: $567.1 million
Public Debt: 138.9% of GDP
2013 data unless otherwise noted.
Data compiled as of September 2014.

257

JAMAICA (continued)
THE TEN ECONOMIC FREEDOMS
Score

RULE OF
LAW

Country

World Average

Property Rights 40.0

Freedom from Corruption 38.0
0

20

40

60

80

Rank

1Year
Change

70th
83rd

0
+5.0

100

Jamaicans see corruption as a root cause of their high crime rate. The government has yet to
send a strong signal against corruption. In May 2014, a license to a Hong Kongbased company
for a major power project was revoked amid allegations of improper handling of the tender
process. The inefficient legal system weakens property rights and the rule of law.

Fiscal Freedom 81.5

GOVERNMENT
Government Spending 73.2
SIZE

67th
76th
0

20

40

60

80

+4.3
+3.8

100

Jamaicas top individual income tax rate is 25 percent, and its corporate tax rate is down to 25
percent from 33.3 percent. Other taxes include a property transfer tax and a general consumption tax. Overall tax revenue equals 24.4 percent of domestic income. Government expenditures equal 29.9 percent of domestic production, and public debt is equivalent to 139 percent
of gross domestic product.

REGULATORY
EFFICIENCY

Business Freedom 85.9

Labor Freedom 76.5
Monetary Freedom 71.4

20th
36th
138th
0

20

40

60

80

+1.3
+0.9
5.9

100

With no minimum capital required, the business start-up process takes only two procedures.
However, completing licensing requirements continues to be time-consuming, taking over
four months on average. Inefficiencies in the labor market continue to cause chronically high
unemployment and underemployment. Most prices are set by the market, but the government
regulates the prices of several goods and services.

OPEN
MARKETS

Trade Freedom 75.0

Investment Freedom 85.0
Financial Freedom 50.0

104th
13th
70th
0

20

40

60

80

0.1
0
0

100

Jamaicas average tariff rate is 7.5 percent. Tariffs are an important source of government revenue. Some imports require a license. The government does not automatically screen foreign
investment. The banking sector is diversified, providing a wide range of financial services.
Incorporating new provisions related to the evolving financial system, the Banking Services
Act was approved in June 2014.

Long-Term Score Change (since 1995)

RULE OF LAW
Property Rights
Freedom from
Corruption

258

10.0
12.0

GOVERNMENT
SIZE
Fiscal Freedom
Government
Spending

+4.0
3.3

REGULATORY
EFFICIENCY

OPEN MARKETS

Business Freedom +15.9

Labor Freedom
+8.1
Monetary Freedom +20.5

Trade Freedom
+10.0
Investment Freedom +15.0
Financial Freedom
20.0

2015 Index of Economic Freedom