The initiative for this work emerged from contacts established between IIEP and the Human Employment and Resource Training (HEART) Trust/National Training Agency (NTA), in 1993, while the Institute was preparing a subregional workshop on Policy and planning for vocational education and training that took place the same year, in Barbados. The idea of conducting a joint study on the Jamaican experience in training governance was born at that time. From the beginning, Mr Robert Gregory, Executive Director of the HEART Trust/NTA, understood the importance of such a project for the international community. He deserves credit for encouraging the participation of the agency.

During the implementation of this study, IIEP, through Mr David Atchoarena, was contracted under the project Strengthening the Vocational Training System in Jamaica (Germany/Jamaica) to assist in formulating a financial approach to a new apprenticeship training programme for Jamaica. This assignment was sponsored by the German Agency for Technical Cooperation (GTZ). GTZ project staff, Messrs. Volker Paul (Resident Technical Adviser) and Paul Wolterstorff (Consultant), who are closely involved in the planning of vocational training in Jamaica, provided valuable support and their contributions are acknowledged.

Staff members of the HEART Trust/NTA Planning and Project Development Division, including Messrs. Charles Clayton, Kerron Lindo, Raymond Mills and Mrs Dawn Brown, are also recognized for their contributions in providing data and office support to the effort

This study also benefited from the assistance of staff members of the UNESCO Kingston office. They contributed time and energy in the preparation and implementation of IIEP's missions to Jamaica.

List of abbreviations

CARICOM	Caribbean Community
CBO	Community-based Organization
CTO	Central Training Office
CXC	Caribbean Examination Council
GDP	Gross Domestic Product
GOJ	Government of Jamaica
GTZ	German Agency for Technical Co-operation
HEART Trust	Human Employment and Resource Training Trust
IIEP	International Institute for Educational Planning
IMF	International Monetary Fund
INFOTEP	Institute Nacional de Formacion Tecnico Professional
IVTB	Industrial and Vocational Training Board
JAGAS	Jamaica - German Automotive School
JAMAL	Jamaican Movement for the Advancement of Adult Literacy
JAMPRO	Jamaica Promotions Limited
JCC	Jamaica Chamber of Commerce
JEA	Jamaica Exporters' Association
JHTA	Jamaica Hotel and Tourist Association
JICA	Japanese International Co-operation Agency
JMA	Jamaica Manufacturers' Association
KMA	Kingston Metropolitan Area
MIDA	Micro Investment Development Agency
MOEC	Ministry of Education and Culture
NAFTA	North American Free Trade Agreement
NCTVET	National Council on Technical and Vocational Education and Training
NGO	Non-Governmental Organization
NTA	National Training Agency
NVQ-J	National Vocational Qualification of Jamaica
PMO	Placement Monitoring Officer
PSOJ	Private Sector Organization of Jamaica
ROSE Project	Reform of Secondary Education Project
SAP	Structural Adjustment Programme
SBAJ	Small Business Association of Jamaica
SENAI	National Service for Industrial Learning
SLTOP	School-Leavers Training Opportunities Programme
STATIN	Statistical Institute of Jamaica
STG	Special Target Group
TERC	Training and Employment Referral Centre
TVET	Technical and Vocational Education and Training
UNDP	United Nations Development Programme
UNESCO	United Nations Educational, Scientific and Cultural Organization
USAID	United States Agency for International Development
U-TECH	University of Technology, Jamaica
UWI	University of the West Indies
VITB	Vocational Industrial Training Board (Singapore)
VTC	Vocational Training Centre
VTDI	Vocational Training Development Institute

Introduction



Throughout the world, technical and vocational education and training (TVET) systems are struggling hard to cope with global change and its dramatic economic and social impact. Invariably, reforming the governance of TVET lies at the heart of coping strategies. Hence, it is increasingly felt that government, and more specifically ministries of education, should not be the sole, or even the main actors, in the decision-making process or in the planning and implementing of TVET policies. Other key stakeholders, first of all employers but more generally speaking social partners, have a legitimate right to make their voice heard and become actively involved in TVET matters. Furthermore, mobilizing collective effort is considered as a major step in improving the efficiency of the system and its contribution to economic and social goals.

For many years, TVET in Jamaica has been subjected to a number of policy and institutional changes. One of the most significant reforms was the establishment, in 1991, of a National Training Agency responsible for financing and operating the training system. Advocates of the National Training Agency concept argue that autonomous institutions, financially secured, free from political interference and close to employers, may be better placed to provide demand-led training. Indeed, in many cases experience has shown that the public sector is naturally more inclined to adopt a supply-centred approach.

The relative success of many Latin-American countries in devoting training responsibilities to specific institutions, enjoying autonomous status and financial independence, was a source of inspiration for many others, even beyond the boundaries of the Latin-American and the Caribbean region. Jamaica provides a recent example of that trend. However, while the so-called 'Latin-American model' was developed in a period of industrialization and in a context of expansion of modem sector employment, the Jamaican experience takes place in a far less favourable environment. As such it reflects conditions that are now felt by a majority of economies in Latin America and the Caribbean as well as in Africa. The training issue is no longer to build a coherent and strong system that can meet the growing demand of the labour markets, but rather to invent a new system, closely related to the labour market and capable of reconciling economic and social objectives. While there is still a need to produce, on a relatively small scale, a competitive labour force for supporting the dynamic sectors of the economy, often in service activities, training systems increasingly must take stock of the continuous expansion of the informal sector and are asked to further contribute to the alleviation of social tensions.

Unlike its Latin-American predecessors when they were established, the Jamaican National Training Agency must face a dual challenge: building a coherent training system (the supply-side issue) and adapting training institutions to new markets (the demand-side issue). Prior to 1991, training was provided in a fragmented unco-ordinated way. Historical factors had produced a diversity of providers, linked to various ministries and with few connections with each other. As a consequence, each organization had developed its own offerings and strategy, sometimes with high political interference, and the transparency of the system was very poor both for enterprises and individuals. Establishing a National Training Agency was therefore first meant to introduce coherence and transparency. This institutional change also indicated a marked departure from the previous regime, often dominated by a political agenda. A significant expected side-effect of that reform was also to restore the image of training before employers and the public at large. While strengthening linkages between training and the labour market and involving business representatives in the new institution were likely to improve employers' perception of TVET, changing people's opinions might prove to be more complex. Hence, TVET in Jamaica does not enjoy high social value. Although this pattern is shared with many other countries, in Jamaica negative attitudes towards vocational education may be aggravated by a post-colonial syndrome, legacy of the slave-based plantation economy.

In addition to making training coherent, efficient and attractive, the National Training Agency must learn to cope with a secular decline in the economy, combined with a rise of the informal sector and pervasive poverty. Recognizing the reality of economic vulnerability, labour market segmentation and social fragmentation, the Agency must therefore be able to generate a system both market oriented and socially sensitive. Combining those two objectives requires a new training philosophy where the reform of the existing training institutions goes together with devoting more responsibilities to employers, deregulating the provision of training and imagining innovative ways of delivering training to disadvantaged groups.

This publication explores the Jamaican National Training Agency's experience in making training provisions more coherent and in implementing new directions towards increasing autonomy of training institutions, incentive-based mechanisms and the establishment of an open market for training. These trends were taking place at a time when government was expanding Jamaica's private sector. The year 1991, which saw the birth of the National Training Agency, also marked the second phase of a privatization programme, initiated in 1981. Therefore, the efforts to increase employers' involvement in the regulation of training and in skills development must be seen against a broader policy background in which the overall intention was to reduce the roles of government, while increasing those of the private sector. The implementation of such policy relied very much on market principles.

There is no doubt that the recent Jamaican experience illustrates issues, challenges and options common to many medium-income-level countries, in slow growth contexts. Although coping strategies are necessarily intersectoral, the governance of training represents a significant concern to improve the competitiveness of the economy and maintain social cohesion within global change.

The analyses of issues which highlight the main features of the Jamaican reform of training governance are presented as follows. In Chapter I, a country profile describes the environment in which the National Training Agency operates, with special reference to the institutional, economic and educational background. An attempt is made to express this information into concrete challenges for the training system.

Chapter II is devoted to a presentation and discussion of the 'National Training Agency model'. The review of the experience of other countries in applying the model provides a comparative framework to identify the distinctive features of the Jamaican National Training Agency. Specific developments describe the historical process leading to its establishment. That long-term perspective helps to clarify the factors and rationale which explained the policy and institutional changes that have affected training since the 1980s. The successive reform of TVET can easily be related to a shift on the political agenda from self-reliance and collective ownership of key means of production to export-oriented growth and privatization.

Chapter III analyzes training provision and policies. Historical trends in enrolments, resources and expenditures testify to the impressive growth of the training system. Information is also provided on training modes, skills taught as well as on the operating model used to manage the agency and regulate the training system. This description documents the gradual shift from a traditional training organization, mainly involved in operating training centres, into a complex body, increasingly relying on enterprise-based training, supporting the emergence of a market for training and finding innovative ways to deliver specific training programmes to poor rural communities and other disadvantaged groups.

Chapter IV is dedicated to an in-depth analysis of two key components of the ongoing policy: reforming training institutions and involving more employers in training delivery through incentive-based mechanisms. Those developments clearly reflect a new training philosophy. In this emerging context, training institutions are gradually seen as agents of local development and as genuine actors of the community in which they are located. Furthermore, innovative incentives are being designed to enrich the partnership with enterprises and contribute to the establishment of a co-operative training formula where responsibilities for imparting skills will be shared between training institutions and employers.

In the concluding remarks, the main features and lessons of the Jamaican experience are summarized. Looking at the National Training Agency confirms some of the elements that produced many success stories in Latin America. Relative autonomy from the Ministry of Education, dissociation from the school system, closeness to industry and financial stability are certainly important ingredients. However, the difficulties encountered also indicate the limits of the National Training Agency model in a context of employment stagnation and social fragmentation. Although it became a necessity, facilitating the transition of young people into the informal sector cannot constitute an alternative to re-deploying the training system. Nor can it offer a satisfactory way to alleviate poverty when there is no evidence that the growth of the informal sector has been helping the poor in an effective way to cope with economic hardship. The most complex challenges facing the National Training Agency in the years to come will probably remain in the balancing of economic and social goals, provided that such reconciliation is possible.

Chapter I. Jamaica: a country profile

1. An overview

1.1 Introduction

This chapter examines the setting and context within which the Human Employment and Resource Training (HEART) Trust/National Training Agency operates and discusses the opportunities and challenges the country presents to the training agency. The chapter discusses features of Jamaica's geography, its political, social and institutional structure, its regional and international ties and some of the trends in these relations, its people, the economy, the labour market, and its educational sector. A final section attempts to integrate this information into a summary of the challenges presented by the overall setting.

1.2 Geography

The country of Jamaica is an island lying entirely in the Caribbean Sea 90 miles south of Cuba at a latitude of 17 ½ and 18 ½ north and a longitude of 76 ½ and 78 ½ west with an area of 10,982 square kilometres (4,240 square miles). The island is a part of the Greater Antilles chain, whose other major islands are Cuba, Hispaniola and Puerto Rico. The country is 146 miles long, has a maximum width of 51 miles and includes about 550 miles of coastline.

Jamaica is divided into three counties and fourteen parishes. The island features a hilly to mountainous interior, a lengthy north coast dotted with tourist resorts, and a major metropolitan region along the south coast at Kingston, with a population of about 750,000.

1.3 Political and social structure

Politically, Jamaica is a parliamentary democracy structured along the lines of the 'Westminster' model with a bi-cameral legislature including an elected House of Representatives and an appointed Senate. Jamaica is a Commonwealth country with a Governor-General symbolizing the ties to the Commonwealth, but is headed by a Prime Minister selected by the ruling party. Since independence in 1962 two main political parties have exchanged power.

The Jamaica Labour Party held power during most of the 1960s and most of the 1980s, while the People's National Party held power during most of the 1970s and since 1989 until the present, winning an unprecedented third term in late 1997.

Most of the institutional structures are modelled along British lines. The Civil Service has British roots, and the police and military, customs and tax administration are based on British approaches. A National Housing Trust collects payroll taxes to finance government-led housing solutions, and the HEART Trust is organized along similar lines. The electric and water utilities are government owned, but much of the rest of the formerly state-owned entities have been or are being privatized. Already divested are the national airline, the telecommunications company, and the largest sugar company, while a petrochemical processing plant and the railways have been in preparation for divestment for several years. Three power-generation projects with private financing have been implemented.

For National Training Agency purposes, there is significant interaction with its parent ministry, the Ministry of Education and Culture, as well as cooperation with the Ministry of Labour and Social Security, Jampro, the government's investment promotion agency, and its parent, the Ministry of Investment and Commerce. Close relations exist with the Ministry of Finance and Planning concerning the annual budget of the Agency. Links have also been established with the Planning Institute of Jamaica regarding the training portfolio. The NTA relies on labour market and other statistical data from the Statistical Institute (STATIN). A recently launched National Industrial Policy is administered by the Ministry of Investment and through Jampro; these functions provide the government leadership in terms of industrial development which guides, more or less, the directions of the training system.

Box I.1 Jamaica at a glance

Population		2,527,700	Overseas Jamaicans 2,500,000 (est.)
GDP	Constant JA$17,548,8 million		Growth Rate '97-2.4% '96-1.7%
GDP per capita		JA$6,943	(=US$ 1,262)
Inflation Rate		1997 9%	1996 16%
Labour Market		1,133,800	Males 613,800 Females 520,000
Unemployment Rate '97		16.5%	Male 10.6% Female 23.5%
Tourism Arrivals		1997 1,903,900	1996 1,820,600
Infant Mortality		24.5/'000
Primary School Enrolment Rate			98.0%
Lower Secondary Enrolment Rate			90%
Upper Secondary Enrolment Rate			82.4%
Tertiary Enrolment Rate			9.5%

Source: Economic & Social Survey of Jamaica, 1997.

As a people, Jamaicans are an enterprising, proud, and resilient group with a strong and rather unique cultural identity. Although the overwhelming majority of the population is of African origin, there are large numbers of racially mixed persons, as well as significant minorities of Chinese, Syrian and Anglo-Saxon origin. The latter are mentioned because their economic (if not political) influence is great. Jamaicans speak both a local patois or Jamaican Creole as well as standard English. Much of the rural population speaks almost entirely the patois, and this presents a challenge to the education system.

While emerging out of the British Empire, Jamaica is aligned with the Caribbean Community, or Caricom, a loose confederation of Commonwealth Caribbean states that includes other territories such as Barbados, Trinidad and Tobago and numerous small states of the Eastern Caribbean. Efforts at closer integration have made some progress in recent years after failed attempts to create a West Indian Federation in the early 1960s. There is now, for example, a common external tariff, as well as a fair amount of consensus on various foreign policy issues affecting the region. For Jamaica as for many of these other countries, despite the historical ties to Britain, the major trading partner is the United States of America, and the political influence of that country looms large on almost any issue of importance. During the 1980s Jamaica and the region benefited from the Caribbean Basin Initiative which allowed for duty concessions on locally produced items using American raw materials. This spawned the off-shore processing industries in Free Zones, primarily for apparel manufacturing and data processing. These preferential trading arrangements, as with those of the LOME arrangements pertaining to bananas, are now being eroded by the North American Free Trade Agreement (NAFTA), on the one hand, and by the World Trade Organization, on the other (which threatens the banana regime). In response to this, Jamaica and many of the other Caricom countries, seek NAFTA parity rather than full accession to NAFTA, as this path is viewed as less onerous than meeting all the requirements involved in NAFTA. This is justified based on the small size and vulnerability of the economies of these small island states. As is said in the region, "if the USA comes down with a cold, we get pneumonia". However, prospects for any progress towards participation in NAFTA have been blocked by the USA congress, which has so far refused to grant 'fast track' authority to the USA president.

Development activity in the country is changing in light of global and bilateral relationships. Bilaterally, assistance from the USA has decreased considerably as its resources have been routed to the eastern block and former Soviet states. The Germans and Japanese have enlarged their roles, on the other hand. Multilaterally, the World Bank remains a major lender and UNDP and the World Food Programme have been important, while the Inter-American Development Bank and the European Union have enlarged their involvement. The thrust of development assistance has also evolved towards poverty alleviation as the major focus, with the future likely to place more emphasis on trade.

For the National Training Agency a number of internationally assisted projects are of great importance; these include:

· The Development of the Vocational Training System: Germany/GTZ;

· SKILLS 2000: World Food Programme (assistance ended 12/97 but project continues);

· The Technical High School Development Projects: Japan/JICA and HEART Trust/NTA with the Ministry of Education;

· The Jamaica Social Investment Fund: World Bank loan and Jamaican co-financing;

· The Workforce Development Consortium: Inter-American Development Bank, Private Sector Organization of Jamaica and the Trade Union Confederation;

· The Reform of Secondary Education: World Bank and the Ministry of Education.

1.4 Demographic features

The total population of 2,527,700 is a stable one with an average annual growth rate of 1.0 per cent for 1996 and growth rates of similar size in recent years. Population size is influenced by three main demographic variables: fertility, mortality and migration. Jamaica's Crude Birth Rate for 1996 was 22.8 per thousand but averaged 24 per thousand over the previous six years. The Crude Death Rate was 5.9 per thousand in 1996 and averaged 5.8 per thousand over the previous six years. About 20,000 Jamaicans migrated in 1996, and this figure has remained at about this (high) level since the 1980s.

The age and gender structure of the Jamaican population is similar to that of many other developing countries. In 1996 the population included 1,259,518 males and 1,268,178 females or 49.8 per cent males and 50.2 per cent females. The main demographic groups can be summarised as follows:

· infants under a year, 2.3 per cent (1.2 per cent male and 1.1 per cent female), about 58,100 persons;

· children under 5 years, 11.5 per cent (5.8 per cent male and 5.7 per cent female), about 290,700 persons;

· children under 15 years, 32.0 per cent (16.1 per cent male and 15.9 per cent female), about 808,900 persons;

· youth (15 to 29 years), 28.3 per cent (14.1 per cent male and 14.2 per cent female), about 715,300 persons;

· the school-age population (3 to 18 years), 32.9 per cent (16.5 per cent male and 16.4 per cent female), about 831,600 persons;

· the working-age population (ages 15 to 59 years), 58 per cent (29.3 per cent male and 28.7 per cent female), about 1,466,100 persons; and

· persons 60 years and over, 9.6 per cent (4.5 per cent males and 5.1 per cent female), about 242,700 persons;

· women of reproductive age (ages 15 to 49) comprised 660,200 or 26.1 per cent of the population. By implication they were responsible for the 57,400 live registered births in 1996 for a General Fertility Rate of 87 births per 1,000 women of reproductive age;

· the vocational training population (ages 15 to 24) consists of 244,805 persons aged 15-19 and 242,813 persons aged 20-24 for a combined total of 487,618 persons comprising 19.3 percent of the total population. This cohort consists of 243,524 males and 244,094 females, or 49.9 per cent males and 50.1 per cent females.

Table I.1 Population of Jamaica, by age, sex and percentage distribution - 1996

Age group	Males	%	Females	%
0-4	146,839	5.81	142,821	5.65
5-9	130,351	5.16	128,513	5.08
10-14	130,934	5.18	131,738	5.21
15-19	122,215	4.84	122,590	4.85
20-24	121,309	4.80	121,504	4.81
25-29	113,282	4.48	114,930	4.55
30-34	104,695	4.14	101,765	4.03
35-39	85,501	3.38	86,226	3.41
40-44	64,630	256	64,397	255
45-49	49,149	1.94	48,787	1.93
50-54	42,751	1.69	40,906	1.62
55-59	36,577	1.45	33,971	1.34
60+	111,285	4.4	130,030	5.14
TOTAL	1,259,518	100.00	1,268,178	100.00

Source: Planning Institute of Jamaica, Economic and Social Survey, 1996.

Notable in the age data is that Jamaica is young. The youth population (ages 15-29) at 28 percent, or about 715,000 persons, is proportionally large. To be noted is the rapid and increasing decline in population share among each of the groups after age 25. This pattern reflects the high migration to the USA, the United Kingdom and Ontario, Canada (for the most part) over the past 30 years or so. This has implications for the amount of skills in the economy as many of the more senior workers have migrated. This flight of human capital was a particular phenomenon of the 1970s. The bulge in the over-60 population reflects the return of retiring Jamaicans to their homeland. Successive governments have recognized the importance of both overseas Jamaicans as well as this returning population, much of which is still well within the employment age. Many Jamaicans emigrate for various periods of time with a view to returning if and when they accumulate some capital (either intellectual or financial). Overseas Jamaicans are an important source of national income as they send remittances back to the country.

The geographic distribution of the population features over 28 percent of the population living in the Kingston and St. Andrew metropolitan area, with another nearly 15 per cent living in the parish of St. Catherine that includes the community of Portmore. Thus about 40 per cent of the population lives in these adjoining urban communities. St. Catherine has grown the most due to the expansion of housing in the town of Portmore, while the Kingston area has grown only slightly. The parish of St. James, including the resort town of Montego Bay, has grown from 5.5 per cent of the population to 6.7 per cent. The other parishes have shown declines in population due to the rural-to-urban internal migration that has been characteristic of the population for decades. Figure I.1 illustrates the geographic distribution of the population.

Source: Figure developed by HEART Trust/NTA from data supplied by the Statistical Institute of Jamaica in The Labour Force (selected years).

2. The Jamaican economy

The Jamaican economy was built upon an agricultural foundation based on large plantations growing sugar and bananas, using the large pool of unskilled and semi-skilled labour from the colonial period. The 1950s saw the emergence of local manufacturing within a protected market based on an import substitution economic model. During the 1960s the economy expanded at a rapid rate with the development of the bauxite/alumina industry and continued growth in manufacturing. The 1970s was a period of economic decline due to the oil shocks of that decade and capital flight resulting from investor fears about socialism. The 1980s were characterized by the maturing of the tourism industry along with modest growth fuelled by external borrowing. During this period offshore manufacturing was begun using duty-free processing zones as a vehicle to attract investment and generate employment. In the 1990s the economy is still trying to achieve macro-economic stability while relying on four main sectors: tourism services, offshore (light) manufacturing, mining and agriculture.

Jamaica is still emerging from structural adjustment and liberalization of the economy that began in the late 1970s and accelerated greatly in the 1990s due to globalization. Since 1977 Jamaica has signed more than 10 Structural Adjustment Programmes and these agreements have had an overwhelming influence on the development of the economy for the past 20 years. Given the scope of this economic situation, a brief historical overview from the 1960s to the present is informative.

¨ Prior to the 1950s

Jamaica was a colony of the United Kingdom and a plantation economy with the emergence during this time of the beginning of post-colonial political and economic features. The concentration of power and wealth in the hands of a few, of a different colour, influenced the distribution of education for the mass of the people, who were viewed as agricultural labour. Weak social capital is a legacy of this period. Violent labour/management conflicts of the late 1930s were instrumental in launching the country's future political leadership as both parties come from a labour background. As from the end of slavery, Jamaicans fled the plantations and squatted on plentiful crown lands; labour shortages led to importation of indentured Indians and Chinese; since that time any large enterprise is at risk of being perceived as essentially similar to the plantation. Among workers this plantation psychology features both over-dependence and resentment. So industrial actions have always been common, on the one hand, while some workers look at the employment situation as an all-encompassing social and economic institution.

¨ Prior to 1972

Market-oriented rhetoric but a de facto inward-looking import substitution strategy established Jamaica's modem economic foundation in protectionism. State-led growth and state capitalism (along with small businesses concentrated in distribution and tourism) characterized the economy. The import substitution strategy led to the establishment of state-owned firms and high import barriers. This in turn led to high-cost, low-quality goods, not competitive over the long run. The economy was given a strong boost during this period by the emergence of the bauxite/alumina mining industry, a high-income, low-employment industry developed by Canadian and American interests. A bauxite levy was introduced in the 1970s to correct a perceived unfair advantage in the industry favouring the foreign owners.

¨ 1972-1980

Consistent with the spirit of the times, the leftward swing of the 1970s propelled Jamaica's Michael Manley and his People's National Party government in the direction of democratic socialism. This ideology was focused on reducing the dependence on foreign capital, income redistribution, increasing real wages, expanding public sector employment, and nationalized economic capacities. These policies, collectively, resulted in a deterioration of the public-sector debt, inflation, balance-of-payment problems, erosion of the Jamaican dollar, higher unemployment, flight of financial and intellectual capital and overall economic decline. Some observers also believe the ideology of the period contaminated worker attitudes.

¨ The 1980s

After the bloody elections of 1980 when over 800 people died, a more conservative government led by Edward Seaga and the Jamaica Labour Party (JLP) was elected. While continuing many of the state-led approaches of the 1960s, the JLP implemented an IMF/World Bank Structural Adjustment Programme (SAP) including market reform, economic and trade liberalization, a competitive (if protected) exchange rate, and a number of ambitious projects. The latter included development of the somewhat successful export processing Free Zones, a failed export agriculture project, the development of the Ocho Rios tourism resort and other projects assisted by the renewal of aid and loans. The HEART Trust was established during this period to provide manpower to some of these new industries (as well as to compensate for less than adequate educational provisions of earlier years). While SAPs were expected to reallocate labour from import substitution sectors to export-oriented and labour-intensive industries, this strategy was not completely successful either. Until 1989 the basic SAP policies were focused on fiscal and monetary issues; the modest growth of the period leading to somewhat lower unemployment.

¨ The 1990s

Structural adjustment per se was undertaken during this decade with financial-sector deregulation (including deregulation of the foreign exchange market and market-driven exchange rates), privatization, further trade liberalization, building of foreign reserves, and labour market reform. A policy of high interest rates was introduced in the early 1990s to protect the dollar; that policy has by and large remained in effect until now. The economy was beset by high inflation in 1990 that only abated in 1997. Low economic growth has characterized the 1990s.

2.1 Gross Domestic Product, inflation and sectoral change

For 1997 GDP declined by 2.4 per cent while for 1996 the GDP declined by 1.7 per cent below the GDP estimate for 1995. On the positive side inflation declined from 25.6 per cent in 1995 to 15.8 per cent in 1996 and to 9.0 per cent in 1997. Inflation has declined annually from a high of 80 per cent in 1991 to 40 per cent in 1992,30 per cent in 1993, and about 28 per cent in 1994.

GDP per capita has moved from (the equivalent of) US$ 1,325 per annum in 1991 to US$1,293 in 1996, a decline of 2.4 per cent. The following tables and figures summarize information for the past several years on key economic dimensions of GDP and inflation.

Table I.2 GDP 1990-1996 At constant 1986 prices, in J$ '000

1990	17,409,500
1991	17,486,867
1992	17,756,686
1993	18,000,811
1994	18,202,653
1995	18,301,356
1996	17,987,078
1997	17,548,800

Source: Planning Institute of Jamaica, Economic and Social Survey, 1996.

Table I.3 GDP 1990-1996 (at current prices, J$b)

1990	30.5
1991	44.9
1992	73.2
1993	97.7
1994	129.3
1995	165.3
1996	202.1
1997	220.6

Source: Planning Institute of Jamaica, Economic and Social Survey, 1996.

Source: Planning Institute of Jamaica, Economic and Social Survey, 1996.

The low growth scenario has resulted from tight macro-economic policies in the pursuit of economic stabilization, especially the efforts to reduce inflation by reining in the money supply and reducing cash 'liquidity' in the system by maintaining a high interest rate regime. This strategy has been in use for six years and did not begin to show positive results until 1996. Interest rates on government paper were about 58 per cent through September of 1996 and decreased in 1997 to about 25 per cent. Commercial lending rates are now around 40 per cent. The Jamaican dollar has been relatively stable at US$1=J$35. 1996 and 1997 also saw a crisis in the financial institutions, probably fuelled to some extent by the high interest rate policies that resulted both in a proliferation of financial institutions and in borrowers being unable to repay loans at such high interest. During this time available investment funds have flowed into financial instruments as opposed to productive investments.

The macroeconomic picture, then, has been one of 'stagflation' or low growth and high inflation. At least three major structural adjustment packages have failed to yield benefits of eventual economic growth.

The sectoral composition of the economy is characterized by the dominance of the services sector. Services account for 76.5 per cent of the GDP with Basic Services accounting for 20.2 per cent of GDP in 1996 and Other Services accounting for 56.3 per cent (including Distributive Trade at 23.4 per cent and Financial Institutions at 12.2 per cent, down from 15 per cent in 1996). Manufacturing's proportion of GDP has declined over the past six years moving from 19.5 per cent in 1992 to 18.1 per cent for the most recent year. Agriculture, mining, and basic services (electricity, water and transport) showed modest increases during the period.

Source: Planning Institute of Jamaica, Economic and Social Survey, 1996.

Manufacturing continued to decline due to competitive pressures from imports, the high cost of capital and a contraction in the apparel export segment. A number of apparel factories closed and regional operators were shifting production to Mexico to take advantage of NAFTA. Apparel exports declined by 9.0 per cent to US$522.0 million. In 1997 the government introduced a package of assistance for the ailing apparel sector.

Within the services sector, despite contraction in the financial institutions, moderate growth was evident. Tourism grew based on increased visitor arrivals, particularly cruise ship passengers (up 8.8%). A record high of 1,820,627 total visitors arrived representing an increase of 3.9 per cent. Tourist expenditure amounted to US$1.128 million during the year, an increase of 5.5 per cent. This would place the tourism share of the economy at about 20 per cent.

Source: Planning Institute of Jamaica, Economic and Social Survey, 1996.

The GDP trends over the past five years include the following important sectoral features:

· The Goods-producing sectors have increased very slightly in the past five years (1991-1996) from 44.8 per cent to 45.0 per cent of GDP. The contribution from agriculture has increased from 6.9 per cent in 1992 to 8.4 per cent in 1996 based largely on growth in domestic agriculture. Mining grew from 8.8 per cent to 9.4 per cent during the same time period based on growth in the bauxite industry. Manufacturing declined from 19.5 per cent to 18.1 per cent. Construction declined from 9.7 per cent to 9.1 per cent.

· The Services sectors grew from 66.2 per cent to 76.7 per cent during this time with Basic Services showing an increase from 14.6 per cent to 18.6 per cent, and Other Services increasing from 51.7 per cent to 58.1 per cent for last year. Growth areas include transport, storage and communications, distributive trade, and financial services.

2.2 Problems and prospects in the formal economy

The state of the economy is a matter of debate. While some observers consider the economy to be stabilizing, others see such a statement as a somewhat risky conclusion. Hence, some of the results of the economic stabilization programme create additional effects that are not yet fully visible. For example, the past two years have featured both downsizing among nearly all the larger firms, and a crisis involving a significant proportion of financial institutions. These institutions are in a crisis due to unrecoverable loans which debtors cannot repay because the interest rates are so high. Government has rescued a number of these institutions, but will now have to more aggressively recover the loan balances, and this carries the potential to push defaulting firms into receivership; indeed, numerous firms were placed into receivership during the latter part of 1997 and the first half of 1998.

The Private Sector Organization of Jamaica criticizes the government for the high interest rate regime that has dampened investment. It also blames government for a host of ills that plague the productive sector: poor infrastructure in terms of roads, transport and water, expensive and somewhat unreliable electricity, excessive bureaucracy, and inflexible labour market laws and regulations. And it would say the government takes labour's side in industrial disputes (which were on the rise in the recent past).

Government has emphasized achieving macroeconomic stability while prioritizing the stability of the Jamaican dollar. Its attempt to achieve a Social Contract involving a number of agreements between government, employers and labour unions has not been forthcoming due to resistance within the labour unions to signing the document.

The government recently instituted a National Industrial Policy (NIP) aimed at increasing the standard of living of the nation, specifically targeting a per capita income of US$4,000 by the year 2010. This policy is still in the early stages of implementation. It focuses on:

1. Achieving macroeconomic stability, predictability and credibility;

2. An industrial growth and diversification strategy involving strategic investment promotion, infrastructure development and the elaboration of the policy-support framework (including policies aimed at labour market reform, competitiveness and small business development);

3. Achieving greater social equity via poverty alleviation initiatives and gender-sensitive policies; and

4. Conserving the environment via additional incentives, regulation, enforcement and public education.

For the HEART Trust/NTA there are significant implications arising from the Strategic Industry Clusters selected by the NIP. The policy defines four broad areas for development: manufacturing (apparel, other light manufacturing, minerals, chemicals, caustic soda), agriculture and agro- processing (fresh produce, natural fibres, horticulture, marine products), services (tourism, entertainment and sports), and services and technology (shipping, telecommunications and information technology). While the agency is well positioned to contribute to these emphases in manufacturing, tourism and services, and information technology, the programmes in agro-processing (and to a lesser extent in agriculture) and in the sports/entertainment areas will need attention should these begin to bear employment fruit.

2.3 The informal economy

The formal economy has experienced net negative or very low growth and hence growth in the formal segment of the labour market has been weak. The informal segment of the economy has been growing and is estimated to be as large as 35 per cent of GDP over recent years, and the occupational category of self-employment accounts for nearly 40 per cent of employment. The small business sector is officially recorded as comprising 27 per cent of GDP. The growth of the informal sector is directly related to the economic difficulties experienced since the mid-1970s.

As noted below in the section on the labour market, much of the working population is involved in the informal sector. About 48 per cent of the labour force is engaged in work in agriculture or in community, social and personal services and much of this employment would really be characterized as informal. Further, STATIN employment status data show 337,800 'own account' workers, about 35 per cent, in the labour market for 1996. STATIN data on employment by occupational group show 15 per cent of workers in the category of Service Workers and Shop and Market Sales Workers and about 19 per cent in Elementary Occupations, a large share of whom are in the informal economy. Simple observation of the working life of the people reveals a large share of subsistence farmers, street vendors, household helpers, informal importers, hairdressers, gardeners, and those involved in other similar informal activities.

The informal economy also includes numerous very small firms that government and multilaterals are referring to as micro-businesses. Government is interested in both the growth of these firms as economic and job-creation engines as well as bringing these kinds of firms into the formal economy.

With respect to poverty alleviation strategies, the role the informal sector has been playing in helping the poor to cope with economic decline is a key concern. Some authors estimate that the informal income amounts to about half of the recorded income (Bennet, 1995). Assuming that a significant share of those revenues is eventually received by the poor, the informal sector would play an important role in fighting against poverty. However, available data on the structure and functioning of the informal sector in Jamaica do not provide clear evidence that informal-sector activities are controlled by those excluded from the mainstream economy. Similarly, it seems that a significant share of goods and services produced by the informal sector is targeted towards middle- and lower-middle income categories. In other words, in the Jamaican context, it seems that the expansion of the informal activities reflects a rejection of state authority and of legal norms, as much as it expresses the emergence of a 'people's economy'.

However, the necessities of creating alternatives to employment in the formal segment led HEART Trust/NTA to develop a new activity in fostering Entrepreneurial Skill Development. This can be via self-employment, enterprise development and, for the very poor, programmes to facilitate basic income-generating activities.

3. The Jamaican labour market

3.1 Main features of the labour market

The Jamaican labour force in 1997 comprised some 1,133,800 persons including 946,900 employed and 186,900 unemployed. Males comprised 613,800 persons in the labour force, 549,000 of the employed and 64,800 of the unemployed, while females comprised 520,000 members of the labour force with 397,900 employed and 122,100 unemployed. Unemployment for 1997 averaged 16.5 per cent, an increase of 0.5 per cent for the period, with male unemployment at 10.6 per cent and female unemployment at 23.5 per cent. Male unemployment rose 0.6 per cent and female unemployment rose 0.4 per cent since 1996. About 7.3 per cent of labour force participants were seeking work (5.2% of males and 10.1% of females); this rate increased from 6.7 per cent during 1996. Labour force participation stood at 66.6 per cent (males 74.6%, females 59%), a decline of 1.1 per cent. The youth (under 25) component of the labour market accounted for 88 per cent of this decline. There was a net loss of 13,000 jobs for the year, the second consecutive loss after a decline of 3,500 jobs during 1996. For the year, youth unemployment declined by 7.4 per cent with a marked decrease among women; this is believed to reflect a positive response to programmes aimed at reducing unemployment in this age group, but may also reflect reluctance to enter the labour market as a result of adverse economic conditions. Industrial restructuring resulted in a decrease of 3.0 per cent in employment in the private sector, while public-sector employment increased by 11.0 per cent. Employment of professionals rose by over 2.0 per cent to 15.0 per cent of total employment. Part-time employment is increasing, while own-account work is contracting after increasing for 1996.

The long-term trend (1984-1997) in the labour market shows the population over age 15 growing by 17.0 per cent during the period, while the labour force grew by only 8.2 per cent during the period. Thus growth in the labour force has been considerably slower than the growth of the working-age population. The data also show significant decreases in unemployment (reduced by 30% from 268, 000 in 1984 to 186,900 in 1997) along with a 22 per cent increase in employment from 779,500 jobs in 1984 to 946,900 jobs in 1997.

Source: Compiled from Planning Institute of Jamaica, Economic and Social Survey, 1984-96.

Of note in the labour market data is weak relationships that pertain between the proportional contribution to employment and the proportional contributions to GDP among the sectors. Analysis of the 1996 data showed the Community, Social and Personal Services with the largest share of employment at 25.5 per cent but only accounting for 9.2 per cent of GDP. Likewise, agricultural employment accounted for 22.6 per cent of all employment, declining from a high of 27.3 per cent in 1992, but accounting for only 8.4 per cent of GDP (rising from 6% earlier in the decade). The converse is true in the mining sector and in financial institutions. The mining sector is comprised mainly of the mining of bauxite and alumina and accounted for 9.4 per cent of GDP, but comprised a mere 0.6 per cent of employment. Financial Institutions accounted for 24 per cent of GDP, but only 5.7 per cent of employment. Only the Construction and Wholesale/Retail sectors show any close relationship between their share of GDP and their share of employment.

Table I.4. Employment by industry, 1991-1996, ('000)

Industry	1991	1992	1993	1994	1995	1996
Agriculture	243.7	247.3	220.8	226.8	223.2	217.3
Mining and quarrying	5.1	5.8	7.8	6.7	7.0	6.3
Manufacturing	99.0	101.9	97.8	97.7	104.7	100.4
Construction	58.2	59.1	62.1	69.7	76.0	81.2
Electricity, gas and water	5.8	4.9	4.5	5.0	6.8	6.9
Transport, storage and communications	35.8	36.3	40.1	40.1	44.5	48.3
Financing, insurance, real estate and business services	40.3	43.6	43.3	47.2	51.6	54.5
Community, social and personal services	243.8	229.1	228.9	236.8	247.1	245.0
Wholesale, retail, hotels and restaurants	170.2	172.1	191.1	195.5	201.4	199.0
Industry not specified	5.8	5.8	9.9	12.4	1.1	0.8
Total employment	907.7	905.9	906.3	937.9	963.4	959.7

Source: Planning Institute of Jamaica, Economic and Social Survey, 1991-1996.

Table I.4 shows changes over time in the industrial composition of employment. This shows the declining employment in the agricultural sector, modest increases in mining and in utilities, considerable fluctuation in community, social and personal services, and significant growth in construction, transport, financial services and in wholesale/retail, hotels and restaurants.

Historical and cultural aspects of how the labour market operates are worthy of some discussion. Jamaica is a post-colonial society that lived through slavery, and the overwhelming majority of its people carry this heritage. When slavery was abolished, the emancipated slaves left the large plantations in favour of squatting on unoccupied lands throughout the country. Subsequently, East Indians and later Chinese were brought to Jamaica as indentured labour. Since that time Jamaicans have acquired a reputation for resistance to employment in large enterprises, especially if these are seen as remnants of the oppression suffered so obviously in earlier times. Employers have historically been viewed as not particularly progressive in overcoming a legacy of harsh styles and attitudes rooted in deep social class barriers. Jamaica remains a society featuring a strong system of social class boundaries based on colour (as opposed to simply being based on race) and educational background. A significant portion of the industrial and merchant class are of white colour, with a significant proportion of mixed race people at the middle levels, with darker-complexioned people at the lower end of the labour market. This has been changing, of course, and a strong black middle class has emerged within the financial sector, within the civil service, and in the small-business sector.

Agricultural employment is unpopular as well because of the historical legacy of the country; rising 'out of agriculture' is an occupational aspiration of many parents for their children, and thus the agricultural workforce is ageing as young people avoid the sector, especially males.

The male attitude towards employment is often noted. Many Jamaicans would prefer to be their own boss, and the legacy of slavery has had particular effects on males' perception of their masculinity as somehow compromised if a low-level position is the source of employment. Thus a healthy proportion of males opt for a life of 'hustling' to earn a living. This is a phenomenon of great concern to much of the population. Girls out-perform boys from the primary-school level onward, and admissions policies at both the secondary and tertiary levels have to be tilted in favour of males if they are to be represented in anything like the proportion of the population. Recruitment into the vocational trades like construction also poses a challenge as males are the traditional source of the enrolment. There is a perception that manual work lacks value, is underpaid, is socially stigmatized, and that it is preferable to use one's wits by hustling to make a living as self-employed.

3.2 Unemployment

Although the rate of unemployment has moderated noticeably over the past 10 years, the level of unemployment has continued to rise through the 1990s. For males under 25 there were 32.3 thousand unemployed in 1991 and for 1996 there were 37.4 thousand, while for males over 25 there were 21.4 thousand in 1991 and for 1996 23.9 thousand. For females under 25 the 1991 figure was 60.2 thousand and for 1996 it was 65.2 thousand. The largest increase is for females over 25; they moved from 50.9 thousand unemployed in 1991 to 56.4 thousand unemployed for 1996. Women's unemployment rates have been about twice that of men's for a lengthy period; women under age 25 have a rate of 31.8 per cent, and women 25 and over a rate of 33.5 per cent for 1997.

Official statistics as to total unemployment rates are shown below including 1992-96 and the earlier years, 1980,1988, and 1986.

Table I.5 Official unemployment rates, 1980-1996, (%)

	1980	1986	1988	1992	1993	1994	1995	1996
Total	27.4	23.7	18.7	15.7	16.3	15.4	16.2	16.0
Males	16.0	18.6	15.7	9.5	10.9	9.6	10.8	10.0
Females	38.9	413	33.3	22.8	22.4	21.8	22.5	23.1

Source: Economic and Social Survey, Jamaica, 1980, 1986, 1988 and 1996.

Unemployment by parish between 1995 and 1996 shows increases for six parishes and decreases for seven parishes, with Portland, St. Elisabeth and St. Thomas registering rather large increases and St. Andrew, Clarendon and St. Catherine registering significant decreases.

3.3 Labour relations

The emergence of an independent Jamaica would not have occurred in the manner it did without the activities of strong trade unions. Political change in Jamaica has historically been rooted in the labour relations upheavals that occurred in the slavery period and the post-emancipation period in the 1800s, as well as in the 1930s.

The table below captures the data for a number of labour relations measures over the past five years. The number of industrial disputes has declined somewhat from the early 1990s, but the number of strikes remains high. About 75-80 per cent of these disputes are resolved during each year, a consistent pattern, while referrals to the Industrial Disputes Tribunal have varied over the time period. The number of man-days lost due to strikes shows a striking decline during 1996 after a five-year high in 1995.

Table I.6 Industrial relations indicators

Labour relations event	1992	1993	1994	1995	1996
Industrial disputes	337	329	312	242	257
Work stoppages	68	69	95	69	59
Disposal of disputes	256	244	251	180	208
Industrial Disputes Tribunal	25	47	68	29	36
Man-days lost	154,172	83,269	155,491	181,020	39,624

Source: Planning Institute of Jamaica, Economic and Social Survey, Jamaica, 1996.

Two to three years ago, industrial disputes were occurring due to the effect of price inflation on the cost of living. In the past two years a number of unionized firms were downsizing, and some disputes have arisen from this fact. Government has looked to the instrument of a Social Contract between government, employers and unions as a device to maintain industrial peace, but has yet to conclude an agreement, reportedly due to union resistance based on distrust of employers. The fact is, unions in Jamaica are declining in power as they are elsewhere in the world. The number of small firms as a source of employment, the rise in own-account worker status, and the emergence of information technology and financial services have all dampened union membership in recent years. Also, Jamaica's Free Zone manufacturing entities are not unionized.

In Jamaica the private sector has initially developed following an oligopolistic pattern, the main private companies being controlled by a few families. The privatization process has gradually modified that original ownership pattern. Employers are today organized in a number of bodies. The main ones include: the Jamaica Employers' Federation (JEF), the Jamaica Chamber of Commerce (JCC), the Jamaica Hotel and Tourist Association (JHTA), the Jamaica Exporters' Association (JEA), the Jamaica Manufacturers' Association (JMA) and the Small Business Association of Jamaica (SBAJ). Today, employers' organizations form the Private Sector Organization of Jamaica (PSOJ). PSOJ is deeply involved in policy matters and in dialogue with government on economic and social issues, including training.

3.4 The labour market and training

Table I.7 Training output 1993-1997, ('000)

	1993	1994	1995	1996	1997
Technical, managerial and related manpower Skilled and semi-skilled	4.6	5.4	5.7	5.8	6.2
manpower	9.7	14.5	17	20.6	30.6
Total	14.3	19.9	22.7	26.4	36.2

Source: Economic and Social Survey, Jamaica, 1997.

Table I.7 shows the significant increase in the output of trained personnel from Jamaica's education and training institutions, showing a 315.5 per cent increase in skilled and semi-skilled manpower, a 135 per cent increase in technical, managerial and related manpower, and a 253 per cent increase in total output. Table I.8 shows the uneven absorption of vocational trainees by the labour market. Note the increase in the percentages of both employed and unemployed during 1996 and 1997 of those classified as 'Vocational with Certificate'.

Table I.8 Employed and unemployed by training received (%)

Qualification	1992		1994		1996		1997
	Employed	Unemployed	Employed	Unemployed	Employed	Unemployed	Employed	Unemployed
Vocational without Certificate	2.1	3.7	1.4	2.2	1.2	3.1	1.7	3.8
Vocational with Certificate