In recent years, Jamaica’s economy has experienced rapid and potentially sustainable growth, leading some to view it as a miracle. However, others attribute this unexpected development to effective policy-making in a supportive political environment despite many challenges. While this may be true, an alternative perspective could argue that Jamaica’s economic recovery has come at the expense of preparedness for the effects of climate change. With climate change constantly posing new threats to Jamaica’s key agricultural and tourism sectors, the country’s economic future may become more problematic.
During the 1970s, successive Jamaican governments ran chronic budget deficits due to external events beyond their control. As an oil importer, Jamaica suffered from the oil price shock of 1973 which increased the cost of imports and led to recession and devaluation. This forced increased borrowing to purchase critical imports. The situation worsened when US interest rates rose in the early 1980s. By 1986, Jamaica’s debt service-to-exports ratio had risen to 35 percent up from 16 percent in 1977. Debt servicing accounted for over 40 percent of government spending by 1985. To deal with rising debt levels, Jamaica sought bailout loans from the International Monetary Fund (IMF) and the World Bank in the 1980s but this came with severe austerity measures which required significant reductions in public sector employment and public investment by the government. Austerity had a significant impact on the economy, with average growth falling from 2.3 percent in the 1980s to just 0.9 percent in the