Chapter 2


 THE ECONOMIC GROWTH OF JAMAICA 1950 THROUGH 1960 AND
 1965, 1970 AND 1975


Growth of the economy in recent years

 Economic growth in Jamaica was phenomenal in the period 1950-60. A visiting econo-
mist in 1961 ranked Jamaica's rate of growth with the three fastest growing countries of
the world. An examination of the sectoral growth pattern indicates, however, that this
growth rate was due to somewhat special circumstances, and that it would be surprising
if such a growth rate continued into the future. A slowing down of the growth rate would
not necessarily be a symptom of decline or instability in the economy; on the contrary,
it might be accompanied by a more balanced advance of all sectors and the greater diver-
sification of the economy. The high rate of growth of the past decade was strongly associ-
ated with the rapid growth of one industry, the mining of bauxite and alumina, which grew
from having no share in 1950 to having an 8 % share of the gross domestic product by
1960. Although this 8 % may not appear a particularly large share, the importance of
this industry in the actual increments to growth in this period is of course much higher
and direct and indirect effects of this industry's expansion probably accounted for at least
20 % of total growth of GDP at constant factor cost.

 In contrast, agricultural sectors showed a relatively slow rate of growth in both con-
stant and current prices. The share of agricultural industries in the total product fell
from 27 % in 1952 to 13.5% in 1959. However there are grounds for believing that the
estimates made for agriculture may have been too high in the early period, so the decline
in the importance of this industry may not have been so rapid. Within the agricultural
sector, sugar and livestock showed the biggest absolute growth, but their relative impor-
tance in the economy as a whole still declined.

 Besides mining, the industries which have shown the biggest increases are construc-
tion, distribution and services. The construction industry has been affected by important
increases in capital formation, both public and private, including substantial increases in
housebuilding. We shall consider later the relationships between capital and output on a
sectoral basis. Distribution, transport and services have been influenced by the general
increase in economic activity. Services have been expanded by the increasing number of
tourist hotels which came into operation in this period and the increased number of visitors
which has resulted in an increase in the gross domestic product from about J1.5 million
in 1952 to about J5.7 million in 1959.

 In spite of the emergence of several new manufacturing industries in this period the
share of manufacturing increased only from 13.2% of the gross domestic product to 14.2%.