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Challenges Accumulate

Sep 1, 2007

The next Jamaican prime minister faces significant challenges, including too much debt, rising unemployment and a crime wave.

Jamaicans were expected to go to the polls in September and Portia Simpson Miller, the country's first-ever female prime minister, was widely expected to win re-election. The premiership comes with the poisoned chalice of chronic fiscal problems, rising unemployment and a growing wave of violent crime in the Caribbean's most populous English-speaking nation.

"Whoever comes to power will have to grapple with the same issues as the current administration: reducing public indebtedness, fighting crime and improving social conditions in Jamaica," says Shelly Shetty, an analyst with Fitch, which rates Jamaica B+. "Overall, we think the Jamaican economy continues to remain vulnerable to external shocks such as high oil prices and a reversal in favorable global liquidity conditions."

Fiscal performance in 2006-2007 is likely to be worse than budgeted because of lower revenue and higher-than-expected expenditures, says Standard & Poor's. A portion of this is a legacy of the 2007 Cricket...

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“The crisis has been a setback for reserve diversification."

Jan Dehn, Ashmore Investment Management