3m Case Study

Jamaica runs on a free market economy. A free market economy is an economy the functions off of supply in demand. Each party involved is solely responsible for the choices that are made. This type of system works for Jamaica because its economy is relies strongly on services. According to CIA.com, services make up 65% of Jamaica’s GDP.

Economic & Monetary Environment (economic system, main products and services, economic risk, inflation rates/trends, growth rates/trends, GNP, GDP per capita, balance of payments, currency system, any deviations or changes in currency, exchange rate/trends, currency risk, investment risk, purchasing power, disposable income, unemployment rate and trends, percentage of population living in poverty, etc.)

Economy - overview: | |

The Jamaican economy is heavily dependent on services, which now account for nearly 65% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances account for nearly 15% of GDP and exports of bauxite and alumina make up about 10%. The bauxite/alumina sector was most affected by the global downturn while the tourism industry was resilient, experiencing an increase of 4% in tourist arrivals. Tourism revenues account for roughly 10% of GDP, and both arrivals and revenues grew in 2010, up 4% and 6% respectively. Jamaica's economy faces many challenges to growth: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of more than 120%. Jamaica''s onerous public debt burden is the result of government bailouts to ailing sectors of the economy, most notably to the financial sector in the mid-to-late 1990s. In early 2010, the Jamaican government created the Jamaica Debt Exchange in order to retire high-priced domestic bonds and significantly reduce annual debt servicing. The Government of Jamaica signed a $1.27 billion, 27-month Standby Agreement with the International Monetary Fund for...