For the greater part of the past 20 years, Jamaica has been caught in a pernicious cycle of low growth and unsustainable fiscal and debt dynamics. This type of situation is not sustainable in the long run as high public sector debt imposes high debt servicing costs, leaving the country vulnerable to adverse shocks, increasing macroeconomic uncertainty and lowering its ability to produce long-term growth as public investment capacity is crowded out by debt service obligations. On the social side, the result has been inadequate infrastructure, the declining quality and quantity of public services and rising rates of crime and violence. This untenable situation has kept the country on the brink of crisis.
Jamaica's debt problem has been coupled by a history of low growth. Our growth rate over the past decade has been anaemic at best, at an average of 1.3% from 1999 to 2008. That 10-year period represented a time of insurmountable growth for emerging markets, and our neighbours Trinidad and Tobago and Barbados grew at rates higher than ours, 7.7% and 2.1%, respectively.
