U.S. Response to Jamaica's Economic Crisis

Assistance from the Agency for International Development (AID) to Jamaica increased sharply in 1977 with balance-of-payment support and developmental aid of nearly $30 million. This increase reflected the U.S. interest in the Caribbean and a concern for the economic deterioration of a neighboring nation. Despite the efforts of the United States, Jamaica, and other donors to halt the decline, the economic situation remains critical with little hope of immediate recovery. Jamaica's balance-of-payment position has suffered as a result of the rise in oil prices, a decline in tourism, a high level of commodity consumption, an undiversified export economy, and a capital outflow partly due to the government of Jamaica policies. Negotiations between the Government of Jamaica and the International Monetary Fund were unsuccessful in reducing the Government's budget to promote economic stabilization and recovery. Compounding matters, sufficient alternative funding sources have not been identified. Nearly all of the AID projects in Jamaica have problems, which include inadequate project planning, poor commodity procurement, inability of the implementing agency to manage the project, or differences between AID and the Government of Jamaica concerning project goals and interest.