Editorial | How to grow by five per cent a year
Growth of one per cent a year won’t cut it. At that rate, it will take 70 years for the Jamaican economy to double in size and to bring the island’s per capita GDP in range of some of its smaller eastern Caribbean CARICOM partners.
The recently re-elected Holness administration understands this. However, after a decade entrenching its policy of macroeconomic stability, it hasn’t been able to deliver on its aspiration of growth of five per cent per annum, which was projected for after its first four years in office.
Yet, growth at that rate can be achieved! Here is how: It starts, as this newspaper has previously outlined, by breaking the loops that have held back productivity and faster GDP expansion.
In addition to the broad framework we have already proposed for getting this done, The Gleaner is offering seven practical priorities, some of which were previously identified, for a decisive shift in the growth trajectory.
First, Jamaica must immediately reset its energy and logistics costs, which are among the highest in the hemisphere. Until this happens, talk of industrial upgrading is fantasy.
So, while the government negotiates with Jamaica Public Service Company (JPS) for a new electricity generation and distribution licence, it must accelerate competitive renewable-energy auctions; ensure the opening of the grid to commercial and industrial power-purchase agreements; and invest in storage to stabilise supply. On the logistics front, we need a 24-month “port-time and cost blitz” that includes paperless gates; joint inspections; and reliable cold-chain facilities around major ports in Kingston and Montego Bay.
If effective electricity tariffs fall to the Latin-American median, and port dwell time below two days, export competitiveness will change overnight.
Second, crime and justice must be seen and treated as economic infrastructure. Violence and weak justice impose a hidden tax of roughly three percent of GDP every year. Investors calculate that risk long before they look at incentives.
The government should therefore continue to build on the current anti-crime strategy but link it directly to growth. This calls for sustained focus on modern forensics, firearm-interdiction cooperation with US ports, and digitised case-management systems. Economic zones in high-risk areas should pair enforcement with job pipelines and apprenticeship quotas. Safer communities mean lower business costs, higher property values, and stronger fiscal revenues.
Next, there must be a National Productivity and Quality Mission. Stability alone does not create prosperity; productivity does. A dedicated National Productivity and Quality Mission should deliver extension services covering management training, export-standards coaching, digital adoption to at least 3,000 firms over five years.
The mission can operate through sector labs in logistics-tech, agrifood-tech, creative-tech, and health services. Each lab would blend HEART, the universities, and private investors around measurable output targets. If labour productivity rises two per cent a year and total-factor productivity becomes positive by 2030, the growth momentum will sustain itself.
Getting this done will require a transformation of the present Productivity Council at Ministry of Labour and Social Security. The council in its current iteration is too narrowly focused on labour productivity data collection. It must shift focus to total factor productivity.
Building and ascending skills ladders for the AI age is crucial. Artificial intelligence is the new electricity of the world economy. It will either hollow out mid-skill jobs or multiply them. Jamaica must choose the latter. The government, industry, and HEART should urgently explore signing an Apprenticeship Compact guaranteeing 10,000 placements a year in AI-relevant fields: data analytics, mechatronics, cybersecurity, and creative technologies.
A new AI Readiness Curriculum should be mainstreamed from secondary school upward, teaching data literacy, coding, and low-code automation. The government must use AI for permitting, fraud detection, and customer service, showing the productivity revolution in practice.
The fifth recommended priority is finance for production and resilience.
Jamaica’s domestic savings are strong; what’s weak is the pipeline from savings to productive investment. A suite of blended-finance windows – using the Development Bank of Jamaica (DBJ), pension funds, and insurers can fund acquisition of export-related equipment, technology upgrades, and climate-resilient infrastructure.
Additionally, receivables-based lending and scaled-up export credit will free MSMEs from collateral traps. Transparent diaspora bonds should mobilise patient capital tied to named projects, such as logistics hubs or solar farms, with quarterly performance reporting.
Our sixth area for sustained attention is spatial transformation, that is corridors, serviced land, and housing. Growth and development take place in a spatial context. Economic density drives productivity. The expansion of the tourism industry on the island’s north coast after major infrastructure development in the 1990s, including the redevelopment of the North Coast Highway, underlines this fact.
The major development challenge now is to move this and other corridors to high value-added services and industries. In that regard, a National Growth Corridor Plan must connect Kingston–May Pen–Montego Bay through reliable roads, broadband, water, and climate-defence works. Serviced industrial parks and worker housing along these corridors will cut commuting time and attract investors. Faster land titling and a digital cadastre will unlock capital trapped in informal holdings. When firms and workers share serviced space, Jamaica’s urban productivity gap will close.
Finally, The Gleaner recommends strong attention to developing a governance and macro-resilience spine by enacting a Growth & Resilience Act to hard-wire fiscal discipline, create a rules-based Disaster Fund, and enforce digital, time-bound approvals.
A Delivery Unit located, probably in the Office of the Prime Minister, should track every priority through public dashboards and quarterly Productivity Statements to Parliament. Governance quality is the silent determinant of growth; without credibility, even sound policy fails.
These seven missions are not seven silos. They should be seen as interlocking gears in one flywheel: lower costs and faster approvals bring investment; investment creates jobs; jobs raise productivity; productivity drives exports; and exports fuel growth that reduces debt and builds trust. The government must move on all fronts simultaneously, with clear five-year targets:
• Gross capital investment above 25 per cent of GDP;
• Total Factor Productivity growth above one per cent a year;
• Homicide rates down 40 per cent;
• Electricity cost down by 30 per cent; and
• Permitting time halved.
If Jamaica sustains these metrics, five per cent annual growth is not a dream; it is the logical outcome of system reform.