As Jamaica Prime Minister Portia Simpson Miller addressed her heavily indebted nation last month, the Caribbean leader reminded Jamaicans of her steadfast determination to not just balance the books but also people’s lives.
But with one of the world’s highest relative public debt burdens, the country that some are calling the Greece of the Caribbean could soon find that taking care of its most vulnerable is an obligation it cannot afford.
“Having such a high debt level means there is no fiscal space for doing anything else,” said Christine Richaud, the World Bank’s lead economist for the Caribbean.
The United Nations’ Economic Commission for Latin America and the Caribbean said economic conditions have worsened so much in the tourism mecca that Jamaica’s growth is projected to be a sluggish 0.1 percent.
No stranger to tough economic times, Jamaica’s crippling debt crisis — its interest payments as a percentage of gross domestic product are among the highest in the world — crystallizes the challenges many Caribbean countries face even as the global financial meltdown shows signs of improving.
How well or fast the mostly tourism-dependent economies of the Caribbean recover will depend as much on the decisions individual governments take in the year ahead as what happens in Europe and the United States, whose own recoveries from the global financial crisis remain fragile.
The forecast for Jamaica, where debt service costs are expected to consume 54 percent of its 2013 budget, is slightly better than the negative growth Richaud sees for Grenada, a tiny Caribbean country with big problems. Flattened in 2004 by Hurricane Ivan, Grenada continues to wrestle with widening poverty and widespread unemployment.
The Caribbean’s top commodities producers and exporters represent the few bright spots: Suriname, Guyana, Trinidad and Tobago, and even Belize. Suriname and Guyana are benefiting from high prices for gold and minerals. Trinidad and Tobago, which has oil and natural gas, also is projected to post positive growth.
Other countries that are projected to see robust economic activities are the Dominican Republic and Haiti, which share the island of Hispaniola.