Kingston, May 6, 2022— Greater private investment in sectors with significant untapped potential, such as high-value agriculture and outsourcing services, along with necessary reforms, will help Jamaica spur recovery, accelerating greener, inclusive, and sustainable growth, and creating more and better jobs, according to a new World Bank Group (WBG) report.
The Jamaica Country Private Sector Diagnostic (CPSD) report, prepared by IFC and the World Bank, identifies ways to reduce constraints to private investment, and examines private investment opportunities in two sectors: agriculture and outsourcing services. The CPSD also assesses climate change and digitization, which are fundamental for private sector development and Jamaica’s efforts to restore growth.
Agriculture is a major pillar of the Jamaican economy. With rising demand for high-value horticulture products globally, Jamaica has an opportunity to increase exports in this segment, with climate-smart approaches that will contribute to a greener and sustainable growth. In outsourcing, the country can leverage its success with call centers to move toward higher-value services, including knowledge process outsourcing, information technology outsourcing, and eventually digital services for creative industries.
Judith Green, IFC Country Manager for the Caribbean, said “this CPSD comes at a crucial time in the country’s push to increase private sector investments. Despite the impacts of COVID-19, there are opportunities in agriculture and outsourcing, which are complementary to the government’s private sector development strategy. For a resilient recovery, Jamaica will also require investment in climate adaptation and digitization while diversifying into sectors with strong potential for growth and job creation.”
The country’s private sector continues to face constraints including business regulations, access to finance, worker skills, and transport and logistics, undermining short-term recovery efforts and long-term competitiveness. Also, energy costs are among the highest in Latin America and the Caribbean, constricting competitiveness of local firms and limiting their capacity to integrate with global value chains.
The Ministry of Finance, Nigel Clarke stated that “CPSD recommendations are aligned with the government’s priorities and shared several initiatives that are planned or underway, including integrating tax codes to simplify processes for companies and creating a public entity for insolvency proceedings, among others. The government has been strengthening its investment climate reform program, including with support from the WBG, to prioritize private sector development.”
To optimize emerging prospects in agriculture, the CPSD recommends greater access to land, strengthening connections between producers and markets, as well as between actors in agri-value chains, and improving financial services, among others. In outsourcing, Jamaica will need to focus on advanced digital skills training, a key deterrent to developing higher-value outsourcing services.
In addition, the report calls for more climate-informed policies to restore growth and signals renewable energy and energy efficiency as areas that can reduce production costs and accelerate decarbonization. In parallel, accelerated technological adoption, innovation, and digitalization can be transformative for Jamaica’s economy, according to the CPSD.
“The World Bank is pleased to be supporting the Government of Jamaica on key reforms around strengthening the business environment, increasing energy security and efficiency, and boosting information and communication technologies,” said Lilia Burunciuc, World Bank Country Director for the Caribbean. “A competition policy agenda that advances innovative financial solutions and public-private partnerships will be important to attract private investment.”
The CPSD for Jamaica is part of the WBG’s ongoing efforts to boost private sector investment in support of development over the next three to five years. The full CPSD can be downloaded here.
