IFLR 1000
The Guide to the World's Leading Financial Law Firms

Firms in Jamaica are cautiously optimistic about the year ahead, with small signs of recovery being seen and the jurisdiction having managed to sail fairly securely through the choppy waters of the financial crisis. "There is optimism that this year will be better than last year," says one partner....

Firms in Jamaica are cautiously optimistic about the year ahead, with small signs of recovery being seen and the jurisdiction having managed to sail fairly securely through the choppy waters of the financial crisis. "There is optimism that this year will be better than last year," says one partner. "Early indications are: more lending, a little more investment work, people are looking more seriously at projects, dusting them off."

As a keystone of the economy, one area which partners are relieved to see picking up is tourism. "That's a bright spot. Tourism has been holding its own. A slight increase in numbers," says one partner. A tangible symbol of this is the newly-established cruise ship pier the Royal Caribbean in Falmouth, a joint venture by the Jamaican government through the Port Authority and Royal Caribbean Cruise Lines. With the potential to bring 3.3 million visitors to the island every year, it will no doubt prove a significant boost to the local economy.

In the capital markets space, a major development last year was the establishment of the Jamaica Debt Exchange (JDX) in January 2010. "[It] has had a positive effect on the economy, forcing interest rates down, making it easier to borrow and making investments more feasible," says one partner. "Initially there was some resistance to it, but probably 99% of those persons holding bonds have exchanged them for lower interest rates." The exchange was set as part of the Government's strategy to secure $1.3 billion from the IMF in the form of a Standby Arrangement. Interest had for a long time been seen as the Achilles heels of the country's debt offerings, with the Government paying on average J$182 billion ($2 billion) a year in interest payments before the new measures.

Practitioners have also noted an increase in infrastructure investment coming from China in recent years. The People's Republic has been investing heavily across the globe, often in countries with solid natural resources, with Jamaica itself being targeted for sugar and bauxite. Housing, roads, bridges and other infrastructure have all benefited from new investment.

Firms were also hopeful that 2010-11 would bring more privatisation work, but despite a lot of noise from ministers at the beginning of 2010, few concrete plans have been seen. However, in January 2011 the Government did announce its aim to divest itself of the bulk of its stake in the Jamaica Mortgage Bank by the end of the year. The plans will see 25% of the bank remaining in public hands. Firms will be hoping that this is a sign of more to come.