Jamaica: A Case Study in Debt Sustainability and Sustainable Development

Abstract: Jamaica's debt burden has pitched economic development against environmental protection in the country's quest for sustainable development.  Anemic economic growth has prompted the government to institute revenue and expenditure reforms and implement two debt exchanges that have stabilized the economy.  However, the debt burden has limited government's fiscal space to engineer a much needed capital formation with the most promising prospect for any major foreign direct investment coming from a proposed US$1.5 billion investment to build a World Class Logistics Hub in a protected area.  Thus, the debt situation has led the government to prioritize "what is to be developed" at the expense of "what is to be sustained" as Jamaica channels its sustainable development course.