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Caribbean Islands Foreign Assistance
Jamaica received unprecedented levels of foreign assistance in
the 1980s; the primary lenders were the IMF, the World Bank, and
AID. Most analysts perceived the generous aid as support for the
Seaga government's more orthodox economic policies favoring market
forces, trade liberalization, foreign investment, and the
structural adjustment of the economy. The island's relations with
the IMF provided badly needed balance-of-payments support, and
stimulated renewed investor confidence in the island. With the
signing of a US$650-million loan in April 1981, Jamaica became the
number-one per capita recipient of IMF lending in the world. The
government signed three more agreements with the Fund through 1987
on relatively favorable terms. IMF lending, however, entailed
economic policy conditionalities and austerity measures. Jamaica
also received generous funding from the World Bank, ranking as the
number-one per capita recipient in 1982. As in the case of IMF
funding, the structural adjustment loans of the World Bank included
economic policy reform conditions that Jamaica to meet prior to
obtaining further disbursements.
United States bilateral assistance to Jamaica after 1981 was
also unprecedented. From 1981 to 1985, Jamaica ranked as the second
or third per capita recipient of AID funding, or around the tenth
in absolute terms. In 1981 and 1982 alone, Jamaica received more
assistance from the United States than it did during the entire
previous postwar period. It was estimated that the United States
would provide Jamaica with US$1 billion during the 1980s. Most
funding went to balance-of-payments support. By the mid-1980s,
funds were typically transferred in the form of grants rather than
concessional loans. AID's assistance to Jamaica generally went to
strengthen the policies of the IMF and the World Bank; these three
organizations often operated together.
Finally, Jamaica also received generous funding from
traditional multilateral donors such as the IDB and the United
Nations Development Program. Canada, West European countries, and
Japan provided bilateral assistance at the government level. In
addition, numerous nonprofit development organizations,
particularly from the United States, operated throughout Jamaica.
The abundant outside assistance that Jamaica received from
international donors in the 1980s was directly related to the major
economic policy reforms that the government pursued. Foreign
assistance not only framed the country's economic reforms but also
served to insulate the island from international recession and the
regional debt crisis, at least temporarily. As these adjustment
policies neared completion in 1987, the government's stance toward
reform softened, and economic policies became increasingly
sensitive to the political consequences of years of austerity.
Data as of November 1987
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