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FY 1997 Development Assistance: $12,800,000
Introduction.
The United States has a strong interest in the economic health and political well-being of Jamaica based on geographic proximity and significant trade and investment relations. Located 500 miles south of Miami, Jamaica is a long-standing, multiparty democracy and a Caribbean regional leader on issues of importance to the United States. Nearly two-thirds of Jamaica's imports are from the United States. By assisting Jamaica in its development and maintenance of a strong, stable Jamaican economy, the U.S. Government protects existing U.S. investments and markets in Jamaica and fosters opportunities for expanding the already strong Jamaican market for U.S. goods and services. The U.S. interest in promoting a solid Jamaican economy and society is also based on shared regional security concerns (demonstrated by Jamaica's deployment of peacekeeping troops to Haiti), ties through immigration, and a common commitment to democracy. With more than one-third of Jamaica's population of 2.5 million living in poverty, sustainable, broad-based growth is critical to improving the standard of living of the poor to a level that can ensure long-term social and economic stability and economic growth for Jamaica.
The Development Challenge.
In 1995, the Government of Jamaica (GOJ) ended its formal 15-year structural adjustment arrangement with the International Monetary Fund (IMF). Under Jamaica's structural adjustment program, the government implemented macroeconomic policy reforms that have laid the foundation for a market-oriented economy with emphasis on exports and investment. Tariff rates have been reduced, quantity restrictions eliminated, and price controls and food subsidies abandoned. These policy reforms, complemented by the liberalization of the foreign exchange regime (in September 1991), and improved monetary and fiscal policies, provide the basis for Jamaica to become a fully open, market-driven economy, supported by democratic institutions. However, the significant progress made toward Jamaica's macroeconomic health is contrasted by deteriorating living conditions for the majority of Jamaicans. While economic growth has averaged one percent since 1991, it has been stagnant in per capita terms. Additionally, the increase in the numbers of poor people corresponds with one of the most unequally distributed incomes in the world. In view of these trends, Jamaica's challenge will be to ensure sustainable growth and participation by low-income groups in the growth process. That challenge is intensified by Jamaica's large external debt (totaling about $4 billion, including $670 million to the United States), the servicing for which consumes greater than 40% of the GOJ's annual budget.
Jamaica's leading source of foreign exchange is tourism, and most visitors are from the United States. Other principal foreign exchange earners (bauxite, sugar, and bananas) have suffered from world market declines. However, non-traditional exports have displayed a robust, upward trend and hold promise for the future. Jamaica's economic dependence on tourism, bauxite, and agriculture has generated a wide range of negative impacts on the country's natural resource base, including deforestation, soil erosion, pollution, and dwindling marine resources which threaten the very existence of these key sectors. Although Jamaica's health statistics are relatively good, chronic diseases, AIDS, and other sexually transmitted diseases are significant problems. Of extreme concern is a continuing dramatic decline in the basic educational level of the Jamaican population which compromises the ability of the work force to build a modern growth-oriented economy. Although unemployment in Jamaica has decreased from 25% in the early 1980s to 15% in 1995, most labor is absorbed by the informal sector where wages are extremely low. Jamaica's long-term development prospects are dependent on its ability to provide equitable growth, reduce poverty, earn foreign exchange, conserve its natural resources, and generate productive employment for a healthy citizenry.
With Jamaica's solid progress in macroeconomic reform and the new priority placed by the government and donors on poverty alleviation and reduction, USAID foresees a need for a continued, traditional development assistance program in Jamaica for five to eight years.
Other Donors.
USAID and the donor community pledged over $100 million in FY 1995 for development activities in Jamaica. The United States is the largest bilateral donor. Other major donors include: the World Bank, the Inter-AmericanDevelopment Bank, United Nations agencies, the European Union, Canada, Japan, Netherlands, United Kingdom, and Germany.
FY 1997 Program.
USAID's overall goal is to assist Jamaica to achieve broad-based, sustainable economic growth. USAID's program strategy is to increase participation for equitable economic growth, to improve environmental quality and natural resource protection, and to achieve smaller, better educated families. These three priority areas emerged as a result of USAID's efforts to consolidate and concentrate its portfolio in critical areas where it could make a significant impact in coordination with other donors. USAID's previous experience and technical capabilities in these areas were also important criteria for the selection of these priorities.
USAID's program is consistent with agency goals and supports U.S. interests. Increased economic growth and its equitable distribution will improve the purchasing power of Jamaican consumers in a country where demand for U.S. goods and services is already strong and has great potential for increasing. A stronger, more stable Jamaican economy also would reduce the strong trend of immigration to the United States (both legal and illegal). Implicit in improving Jamaica's environmental quality is the protection of the country's fragile land and shared Caribbean Sea resources, as well as threatened species which are important to maintaining biodiversity within the hemisphere. These benefits are shared by all who live in and visit Jamaica, including the Americans who make up the vast majority of Jamaica's visitors. Enhancing family planning and improving education will help create a productive population. Overall, USAID's program aims to help create a strong, balanced economy which in turn will protect existing U.S. investments in Jamaica and provide opportunities for a growing Jamaican market for U.S. products. If funding is reduced from planned levels, some activities would be jeopardized, including support for agricultural exports, urban pollution abatement, national park development, family planning, and AIDS and sexually transmitted disease (STD) prevention.
Agency Goal: Encouraging Broad-based Economic Growth
Jamaica has one of the most unequal patterns of income distribution in the world. Accordingly, USAID's program focuses on economic growth and equity. Activities carried out in 1995 generated significant results toward achieving broader, more efficient markets and increased economic opportunities through privatization, enhanced export production and improved services to tourism. Privatization of a construction company and vinegar plant has brought the total value of GOJ entities divested in 1995 to $40 million, exceeding USAID's target by 110%. USAID assistance to develop agricultural exports contributed to the production of 1,300 tons of coffee valued at $3.5 million. Supported by USAID, cocoa production in 1995 was 1,300 tons, an increase of 38% over the previous year. Under a USAID-
U.S. Department of Agriculture program, 5,677 tons of produce were pre-cleaned for export to the United States, an 11% increase over the previous year. A USAID-funded activity increased water supply to the key tourist area of Negril by 3.5 million gallons of water per day to enable expansion of tourism and to meet local demand. In FY 1997, USAID priorities will be completion of the privatization component, sustainability of the USAID-USDA agricultural pre-
clearance program, and completion of the USAID-Japan co-financed North Coast highway.
Agency Goal: Protecting the Environment
USAID's program is targeted at conserving the resources upon which Jamaica's stable and sustainable long-term development depend. USAID's emphasis is to strengthen public and private environmental management organizations in Jamaica, to help develop a sustainable national park system, to improve agricultural management, and to upgrade sanitation and water services in key tourist areas. Significant results were achieved in 1995. With USAID assistance, a management plan was completed for Jamaica's first environmental protection area, Negril's 30,000 acre watershed. Its establishment is a critical step toward limiting the spontaneous development which is encroaching upon this key tourism area's fragile ecosystem. Visitors at two national parks established with USAID assistance exceeded the projected level of 75,000 in 1995. Jamaica's Natural Resources Conservation Authority delegated the authority to the Montego Bay Marine Park Trust to manage the Montego Bay Marine Park, an important precedent for local management of national parks and protected areas. A USAID-financed policy paper, that proposes a national protected area system for 30 % of the nation's land mass, is now being formally considered bythe GOJ. When enacted, the policies embodied in this paper will have far-reaching impact on the planning, protection and management of the nation's natural resources and biodiversity. In FY 1997, USAID's priorities will include establishment of parks and protected areas, sustainability of the watershed soil conservation program, and completion of a program to introduce appropriate sewage disposal solutions to low-income families.
Agency Goal: Stabilizing World Population Growth and Protecting Human Health
USAID is helping Jamaica to develop sustainable health, family planning and education programs. USAID has had a critical role in Jamaica's family planning program, which has led to a decline in the total fertility rate from 5.6 live births per woman to 3.0 live births in the past 25 years. In 1995, a USAID-funded media campaign resulted in a 33% increase in oral contraceptive sales and a 13% increase in depo-provera use. To reduce the spread of AIDS and STD, condoms are distributed at 72% of retail outlets, an increase from 67% in 1993. Eighty-three individuals from two new target groups -- pastors and workplace supervisors -- received sensitization and counseling training on HIV/AIDS that will ensure a broader level of care and support for HIV/AIDS patients. USAID also supports the government's efforts to strengthen health care management and to ensure access by the poor. In 1995, with USAID support, a pilot hospital program led to cleaner pilot hospitals with more service-oriented staff and motivated managers. Recently-installed income assessors now assure that those who cannot afford to pay the new fees are not denied needed services. Hospital self-financing, a USAID measure for improved management, rose to 12% in the reporting period, up from 10% in 1993. Hospitals have improved flexibility to budget and plan following the increase in fee collections. Other reform measures are having an impact on health care sustainability, with 81% of ambulatory care now being provided by private health workers and 78% of short-term contraceptives being purchased by consumers. In FY 1997, USAID's priorities include shifting of financial costs of contraceptive prevalence from donors to the government and private sector, a further decrease in the growth of AIDS HIV transmission rates, and an improvement of literacy standards among young Jamaicans.
Agency Goal: Building Democracy
The USAID program also supports judicial reform. USAID chose to limit its judicial reform support after a 1991 sector assessment rated Jamaica's democratic institutions and practices as relatively strong. Instead of pursuing a strategic objective in this area, USAID has targeted specific activities including sponsorship of a forum that addressed electoral reform, a study of electronic voter registration and voting, and a program of judicial modernization under the Sustainable Justice Reform project. The project, which ends in 1996, has successfully improved court and justice administration, including programs for cost recovery, docket management, courthouse consolidation, administrative policy reform, public education and alternative dispute resolution. These efforts are expected to boost the level of confidence in the justice system. Other donors are assisting in the area of good governance. The IDB is financing GOJ administrative reform and United Nations Development Program (UNDP) is funding a study on improving GOJ operations.
| Encouraging Economic Growth | Stabilizing Population Growth and Protecting Human Health |
Protecting the Environment |
Building Democracy | Providing Humanitarian Assistance | Total | |
| USAID Strategic Objectives | ||||||
|
1. Increased Participation for Economic Growth Dev. Assistance |
$3,910,0000 |
$148,000 |
$4,068,0000 |
|||
|
2. Improved Environmental Protection and Natural Resource Management Dev. Assistance |
$3,622,000 |
$3,622,000 |
||||
|
3. Smaller, Better Educated Families Dev. Assistance |
$605,000 |
$4,505,000 |
$5,110,000 |
|||
|
4. Other (Democracy and Governance) |
||||||
|
Total Dev. Assistance |
$4,525,000 |
$4,505,000 |
$3,770,000 |
$12,800,000 |
USAID Mission Director: Carole Henderson Tyson
PROGRAM: JAMAICA
TITLE AND NUMBER: Increased participation for equitable economic growth, 532-SO01
STATUS: Continuing
PROPOSED OBLIGATION & FUNDING SOURCE: FY1997 $4,068,000 DA
INITIAL OBLIGATION: FY1995 ESTIMATED COMPLETION DATE: FY1998
Purpose: To increase exports and investment, to expand sources of foreign exchange and employment, to diversify ownership and products, to deepen linkages between exporters and local producers, and to improve productivity and competitiveness, especially among small and micro businesses.
Background: Jamaica's efforts to liberalize its economy and open its markets have laid the foundation for strong and vibrant growth. However, given Jamaica's heavy debt burden, coupled with its import dependency, special efforts to increase foreign exchange earnings through an export-oriented economic growth strategy will be required. Broad participation of all segments of the society in a trade-led growth strategy is required to minimize the negative social impacts of structural adjustment. This can be facilitated by emphasizing employment creation as an important element of the strategy. Despite positive policy reforms, the private sector response to date has been mixed. High interest rates, high inflation, high taxes, excessive government regulation, and low worker productivity are still inhibiting business confidence and investment.
USAID Role and Achievements to Date: USAID support has included provision of technical assistance and training to Jamaican public and private sectors, and nongovernmental organizations (NGOs) to promote privatization, to increase foreign exchange earnings, and to assist microentrepreneurs and farmers. Divestment proceeds from privatization of GOJ public entities total more than $370 million since 1986. These have been used to reduce the fiscal debt significantly. Foreign exchange earnings in priority sectors supported by USAID have reached almost $510 million. Approximately 25,000 jobs, over half of which are women, have been created through USAID assistance. About 11,000 small and microenterprises have received training and credit assistance. Over 46,000 farmers have received assistance in improved crop technology raising their production and incomes. Improved water supply, sewerage disposal and road construction now provide expansion opportunities for the key tourism sector, protect the environment, and improve the quality of life for Jamaicans. Over 500 young men and women have benefitted from higher education opportunities here and abroad.
Description: To achieve this strategic objective, USAID activities support broader, more efficient markets, improved export production, increased economic opportunities for low-income families, improved services for the tourism sector, and training for a modern economy. Specific activities include: strengthening the Ministry of Finance's institutional capabilities in fiscal policy management; assisting with the privatization of major public holdings; promoting pro-competition, intellectual property rights, and customs reform policies that facilitate free trade; providing institutional strengthening assistance to NGOs, e.g., private lending institutions, that support microenterprise development; supporting an NGO-led urban renewal effort in the Inner Kingston area which aims to create jobs and improve the investment climate; helping to increase productivity and market development in key export sectors such as apparel, data entry, tourism and agricultural exports; improving infrastructure essential to tourism development; and increasing access for thousands of disadvantaged Jamaicans to employment, capital, education and training, infrastructure and appropriate technologies.
Host Country and Other Donors: USAID, the World Bank and the Inter-American Development Bank (IDB) have complementary activities in support of the GOJ's privatization and customs reform programs. Also, donor coordination has been strong between the Netherlands, the European Union, the IDB, the Multilateral Investment Fund, Germany, Canada, and USAID in efforts to develop the microenterprise sector. USAID and the United Nations Development Program co-financed technical assistance for a new division in the Ministry Finance, the Fiscal Policy Management Unit (FPMU), which provides institutional strengthening to improve the analysis, formulation, implementation and monitoring of fiscal policy. USAID and Japan are co-financing five major infrastructure sub-
projects to increase investment in the tourism industry. Host country budgetary and in-kind contribution for the activities included in this strategic objective has been $33 million to date.
Beneficiaries: Approximately one-third of the Jamaican population is at or below the poverty line. This objective targets underprivileged, low-income groups for assistance. Included in these groups are small and microenterprises, small farmers, and labor-intensive industries employing a majority of women; and policy reform in areas such as privatization, customs and fiscal management which benefit a large portion of the working-class population.
Principal Contractors, Grantees, or Agencies: USAID implements activities through institutional contracts with U.S. firms including Clapp and Mayne, Harza Engineering, Coopers & Lybrand, and Peat-Marwick; GOJ project agreements with the Ministry of Finance and the National Investment Bank of Jamaica, and grant and cooperative agreements with NGOs including the Jamaica Experters Association and the Kignston Restoration Company.
Major Results Indicators:
Baseline Target
Foreign exchange earnings through exports 1,043 (1990 2,222 (1998)
(in $ million)
Employment in assisted areas (in thousands) 233 (1990) 338 (1998)
Privatized GOJ enterprises ($m cumulative) 6 (1990) 122 (1998)
Assisted small & microenterprise firms (nos.) 4,000 (1993) 5,500 (1997)
Farmers adopting improved technologies (nos.) 9,200 (1992) 50,024 (1998)
Trained personnel for a modernized economy (cumulative) 30 (1990) 1,099 (1997)
PROGRAM: JAMAICA
TITLE AND NUMBER: Improved Environmental Quality and Natural Resource Protection, 532-SO02
STATUS: Continuing
PROPOSED OBLIGATION AND FUNDING SOURCE: FY1997 $3,622,000 DA
INITIAL OBLIGATION: FY1995 ESTIMATED COMPLETION DATE: FY1998
Purpose: To improve management of economically and ecologically important natural resources, to provide for the transfer of environmentally sound cultivation practices to low-income farmers in important watershed areas, and to address problems in urban water supply and extension of sound sewage and waste water treatment.
Background: This strategic objective directly supports the agency's goal of protecting the environment. Jamaica is home to the richest biodiversity in the Caribbean. The large number of endemic species, over 1,000, make protecting biodiversity a high priority. USAID's environmental strategy identifies and prioriitzes environmental issues that affect Jamaica's human health, economic development, monetary costs and biological systems. The most significant issues are watershed degradation (including deforestation); coastal zone degradation (including loss of reefs and destruction of wetlands), water pollution, and degradation of wildlife habitat. All issues have a direct bearing on conservation of biodiversity. The persistence of these issues is inextricably linked to institutional deficiencies.
USAID Role and Achievements to Date: USAID support includes provision of technical assistance and training to the Government of Jamaica (GOJ), local community groups, nongovernmental organizations (NGOs), and farmer associations to strengthen them and help develop sustainable programs. As a result of activities supported under strategic objective, more than 10,000 farmers planted over 2,400,000 trees. Approximately 300 farmers have directly benefitted from integrated pest management and proper use of agro-chemicals. USAID has assisted the GOJ to establish its first two national parks and continues to provide support to ensure the sustainability of a national parks system. A significant achievement of USAID's assistance to the Natural Resources Conservation Authority is the preparation of a national protected areas system plan, which will provide the basis for public and private initiatives to manage 30% of the nation's land mass which includes resources of significant economic and ecological value.
Description: USAID supports improved management of environmentally threatened growth areas, increased conservation of natural habitats, and improved public and private capacity for sustainable resource use. The principal activities focus on strengthening national and local levels of protection and enforcement of ecologically important areas, on providing for the transfer of environmentally sound cultivation practices to low-income farmers in important watersheds, and addressing problems in urban water supply and extension of sound sewage and waste water treatment. The Hillside Agriculture project worked with hillside farmers to plant trees, while conserving soil in important watersheds and increasing hillside farmers' income potential. The shelter program is using the Housing Guaranty and related grant funds to assist the GOJ and its NGO partners to develop and test on-site sewage solutions to help the urban poor squatting in environmentally fragile areas. The renovation of the Montego Bay sewerage treatment plant began in 1995, and when complete, will reduce by 20% (400,000 gallons per day) the volume of untreated waste water that now flows into Montego Bay. Approximately 30% of Jamaica's land surface, encompassing the most important biodiversity and economically valuable resources, will receive improved management by the establishment of protected areas throughout the island.
Host Country and Other Donors: As the lead environmental donor, USAID works and coordinates with the European Union, Canada, the Inter-American Development Bank, the World Bank, and other environmental donors. As a result, environmental activities are implemented in close collaboration with these donors. Community-based environmental NGOs work to solve environmental problems in Negril and Montego Bay.
Beneficiaries: During 1995, the Hillside Agriculture project directly benefitted 3,437 small hillside farmers living in the critical watersheds of Jamaica's eight eastern parishes, promoting environmentally and economically sustainable tree crops. The Agricultural Export Services project worked directly with 289 small farmers, promoting environmentally friendly production practices and access to the high-value, nontraditional, export crop markets. To date, these two efforts have benefitted approximately 28% of Jamaica's 180,000 small farmers directly. The Development of Environmental Management Organizations is designed to strengthen public, private, and nongovernmentalorganizations engaged in managing key natural resources. All Jamaicans will benefit from improved management of protected areas.
Principal Contractors, Grantees, or Agencies: USAID implements activities through: U.S. firms including Louis Berger and RONCO; Jamaican governmental entities including the Ministry of Agriculture, the Ministry of Environment, the Natural Resources Conservation Authority, and the Rural Agricultural Development Agency, and the National Water Commission; and local NGOs and community groups including the janaica Conservation Development Trust, the national Environmental Societies Trust, and the Jamaica Exporters Association..
Major Results Indicators:
Baseline Target
Untreated water from sewage
system entering Montego Bay (gallons/day) 2 million (1992) 0 (1998)
Water quality in Montego Bay 15 million (1992) 1,000 (1998)
(coliform count/100ml- Montego River
sewage outlet)
Adoption of soil conservation
practices (acres under conservation practices) 4, 000 (1991) 20,000 (1997)
Households in squatter areas with environmentally
appropriate waste disposal facilities 200 (1994) 2,200 (1997)
NGO- managed environmental activities 0 (1992) 15 (1997)
Key policy reforms enacted 0 (1993) 2 (1997)
National parks and protected
habitats (acres protected) 0 (1990) 289,000(1997)
Park costs covered from private sources (%) 0 (1990) 50 (1997)
National park visitors 25,000 (1993) 150,000 (1998)
Purpose: To improve the quality of health, family planning and education in Jamaica in order to enable economic growth and stabilize population growth.
Background: This strategic objective directly supports USAID's goals of stabilizing population growth and achieving broad-based economic growth through basic education. Jamaica has achieved major successes, including reducing the fertility rate from 5.6 live births per woman to 3.0 in the last two decades. It's infant and child mortality rates are comparable with those of industrialized countries. A significant cadre of talented workers has been developed. Over the last several years, Jamaica has faced political and economic dislocations associated with structural adjustment, and a transition from a centrally planned to a liberalized market economy. Jamaica's education and health systems must now respond to the need for a larger, better-educated work force that is protected from contemporary health problems. Funds for health and education resources from government and donor sources are rapidly diminishing, but the government has been slow to respond and to devise solutions. The most significant issues are: (1) the growth of a young and untrainable work force, at-risk for sexually transmitted diseases (STD), pregnancy, violence and economic marginalization; and (2) the inability to sustain government-provided health and education services in a changing economic environment.
USAID Role and Achievements to Date: USAID has supported the sustained development of a national family planning system, which has reduced the annual population growth rate from 3% to 1% through programs carried out by government, nongovernmental organizations (NGOs) and private entrepreneurs. USAID also has played a central role in AIDS and STD awareness programs, leading to a universal awareness in Jamaica of AIDS/HIV, and a slowing in the rate of transmission. USAID's program has also supported health sector reform, which has led to a decentralized, divested and largely privatized service. USAID assistance to the Ministry of Education has helped establish a capacity to provide automated data collection and policy analysis to open the way for educational reforms and improved management. Promoting increased community support for schools has reduced vandalism and brought computer learning opportunities to schools.
Description Of the total funding requested for this strategic objective, $1,504,000 is planned for population activities, $3,001,000 is planned for health activities, and the balance is planned for related education activities. USAID supports health sector reform for decentralization, privatization, alternative financing and delivery systems, cost recovery, cost containment and divestment of hospital support service; and family planning with policy development, advocacy, logistics, social marketing, data collection and analysis, training, privatization of services and distribution of contraceptives and problem-solving research. The control of STDs and HIV infection is supported with assistance to the national epidemiology office which is responsible for the STD control program, surveillance systems development and data analysis, behavioral change interventions, training of private providers, NGOs and advocacy groups and problem-solving research. These activities are now being extended from Kingson, their current base, into several tourist areas where high-risk behavior threatens to spread the disease rapidly. The education sector is assisted by a new effort to address the problems of teenage pregnancy, STDs, violence, school leaving, failure to handle social interactions successfully, and lack of vocational preparation which are obstacles to the transition to a socially productive adulthood.
Host Country and Other Donors: As lead donor in family planning, STD/HIV/AIDs control and education, USAID works with the Government of Jamaica, the Inter-American Development Bank, the World Bank, the Pan American Health Organization, United Nations Family Planning Association, United Nations Joint Program on AIDS, and bilateral donors to maintain coordination and complementary funding. Many NGOs are supported directly or through contractors to carry out USAID activities.
Beneficiaries: At least 50,000 women and men are helped annually by the family planning and STD/HIV/AIDS control clinics. USAID-funded education programs reach at least 870 primary schools through the school-community program, which represent 250,000 primary and secondary students.
Principle Contractors, Grantees or Agencies: USAID implements its activities through: U.S. private firms (the futures Group, Family Health International, Partners for International Education, the Academy for Educational Development, and the University Research Corportation); government ministries (the Ministry of Health, the Minsitry of Educaiotn, the National Family Planning Board); U.S. Universities (Pennsylvania State University, the University of Florida); and local non-governmental organizations and community groups (the Women's Center, Private Sector Organization of Jamaica, and Jamaica AIDS Support).
Hospital self-financing 0%(1990) 20%(1998)
Health services covered by
private insurance 15%(1989) 26%(1998)
Total fertility/woman 15-44 yrs 3.0(1989) 2.6(1998)
Contraceptive prevalence 55%(1989) 66%(1998)
Longer-term contraceptive methods 40%(1989) 60%(1998)
Condom access by high risk
groups through retail outlets (outlets) 0(1991) 5,000(1998)
Condom use by general population 42%(1990) 65%(1997)
Incidence of primary and
secondary syphilis 2%(1991) .5%(1998)
Illiteracy among out-of-school youth 30%(1995) 15%(2000)