Jamaica sets out on the yellow brick road to economic recovery

The Reagan administration is banking heavily on an early economic recovery in Jamaica to serve as a cornerstone of the Caribbean strategy it will soon disclose.

Already the United States has committed $60 million in few foreign aid to the island, while the International Monetory Fund (IMF) has approved a $679 million loan, $308 million of which is to be available in 1980.

This should go far in reinvigorating the island's sagging economy. But US officials are well aware that money alone will not solve Jamaica's economic troubles, which include baring unemployment, high consumer prices, and business bankruptcies.

US officials recognize that Jamaican Prime Minister Edward Seaga, and the Caribbean as a whole, are in one of the most challenging economic predicaments in the Western World.

At its base is a demographic problem that is only becoming apparent to Jamaica observers: The labor force hasn't been growing as fast as the population.

Jamaica's population of 2.3 million is growing about 1.4 percent a year -- at first glance quite an acceptable increase when compared with growth rates elsewhere in the Caribbean and through the Americas. That birthrate means an annual increase of 30,000 to 35,000 people.

But between 1970 and 1975, Jamaica's labor force grew by just 30,000. The growth of the labor force from 1950 to 1975 was only 11 percent of the increase needed for that 25-year period.

Jamaica's inexperience in creating jobs for its people "is mind boggling," says Robert W. Fox, an Interamerican Development Bank population specialist.

A US intelligence officials says, "If Jamaica has its difficulties in handling the problem of job creation, with its relatively stronger economy, how can other islands much less strong and much smaller be expected to solve their dilemmas?"

All the islands have a safety valve -- emigration. Before 1960, islanders moved largely to Britain. But lately they have migrated to Canada and, increasingly, to the US. Large Jamaican, Barbadian, and other West Indian colonies are found in New York City, Boston, and Chicago, and other cities.

While emigration has helped cut unemployment and eased social and economic pressures, it has also created a brain drain of some of the educated people the island most needs.

A sizable portion of the migration, particularly to the US, has been illegal. But much of it has been legal. US immigration statistics show that in the 1970s , 7 percent of all legal entrants into the US with permanent or long-term visas were Jamaicans. "Legals" from other Carribean islands are also a significant part of the US immigrants.

Some of the islands, including Jamaica, have experienced a drop in the annual birthrate in recent years, and this is expected to continue. But even emigration and a lower birthrate are not expected to easily solve Jamaica's bedeviling demographic problem.

The Reagan administration would like to make the Caribbean a showcase of US concerns and solutions. It hopes to find both short- and long-range ways to make a potentially volatile area on the US doorstep more stable. Job creation is a key element of the Caribbean proposals now being drafted. Regan planers believe Jamaica's population spiral can be largely solved in the next decade. They feel are talking the same economic language as Prime Minister Seaga, who visited Washington early in the Reagan administration.