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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. About the CPSDThe World Bank Group's Country Private Sector Diagnostics aims to identify sectors where private sector solutions can create or expand markets and make substantial contributions to development impact. The diagnostics use a structured approach to analyze key sectors with unrealized private sector potential in each country and make recommendations for policy action. The sector analyses, conducted with significant input from teams across the World Bank Group and from external partners including governments, provide valuable information on the challenges and opportunities to better leverage the private sector to achieve developmental objectives. The CPSD aligns with the World Bank Group's Maximizing Finance for Development (MFD) approach, which looks to private sector solutions to reach the 2030 Sustainable Development Goals.
About the World Bank
The World Bank provides financing, global knowledge, and long-term commitment to help low- and middle-income countries end poverty, achieve sustainable growth, and invest in opportunities for all. We comprise the International Bank for Reconstruction and Development (IBRD), the world's largest development bank, and the International Development Association (IDA), one of the largest sources of funding for the world's poorest countries. With the other World Bank Group institutions as well as partners across the public and private sectors, we are helping build solutions to the global challenges of the 21st century in all major sectors of development. A world where no one lives in poverty and everyone has the opportunity for a better life is within our reach.
About IFC
IFC —a member of the World Bank Group— is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2021, IFC committed a record $31.5 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of the COVID-19 pandemic. For more information, visit www.ifc.org.
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