Jamaica is betting on special economic zones (SEZs) to boost exports and attract foreign capital, but investors say red tape, labour shortages, and slow approvals are stalling progress, even as the Government touts the regime as central to the island’s economic transformation.

More than 70 per cent of Jamaica’s export activity now originates from SEZs, according to Minister of Industry, Investment, and Commerce Aubyn Hill. Speaking at an SEZ investor briefing last Tuesday, Hill framed the regime as a critical component of Jamaica’s modern economic architecture, crediting it with generating industrial clusters and supporting the country’s post-pandemic recovery.

“This is what macroeconomic independence looks like,” he said, as he listed key gains such as low unemployment, improved credit ratings, and growing investor confidence.

But while the SEZ programme has gained traction on paper, some investors have pointed to structural problems that continue to frustrate their experience.

“The biggest challenge our clients continue to report is bureaucracy,” said Kelli-Dawn Hamilton, CEO of the Jamaica Special Economic Zone Authority (JSEZA). She explained that delays are often tied to a lack of coordination among government agencies, particularly Tax Administration and Ministry of Finance, both of which are required to process SEZ applications.

A new digital platform is now being developed to streamline these procedures, with full roll-out targeted for the third quarter of this year. Some elements, such as asset tracking and reporting tools, are already online, but Hamilton says the application and renewal systems still require work.

Artificial intelligence (AI) is also being explored as part of the agency’s long-term strategy, with the aim of helping applicants navigate the process more easily and improving back-end efficiency.

“AI can help applicants complete submissions correctly and reduce back-and-forth,” she told the Jamaica Observer. “But any use of AI has to align with Jamaica’s data protection rules, so we’re proceeding carefully.”

In the meantime, JSEZA has begun including tax and customs officials in site visits from the outset, a change from previous practice where these agencies were brought in later in the process. The hope is that early coordination will reduce approval times and investor attrition.

Although Minister Hill described Jamaica as a “logistics and distribution powerhouse in the making”, the realisation of that vision depends in part on how efficiently the Government can implement the SEZ regime it has designed.

Under the current structure, developers who qualify as “master developers” — those managing 60 or more acres — are eligible for 50-year leases, duty-free inputs, and a reduced corporate tax rate as low as 7.75 per cent if they meet certain employment targets.

The Caymanas SEZ is one of the flagship projects now being promoted by the Government, and is expected to play a central role in Jamaica’s industrial and export strategy.

Investor interest has been particularly strong in manufacturing, logistics, services, and the creative industries, including film. The SEZ Authority is also preparing to integrate intellectual property activities into the framework, once Jamaica’s IP regime is finalised later this year.

Hamilton noted that the sources of investment are becoming more geographically diverse, with inquiries coming not only from the United States and United Kingdom, but increasingly from Latin America, Africa, and the United Arab Emirates.

Still, while interest is rising, challenges remain.

Productivity concerns are high on the list. Though Jamaica’s unemployment rate is near historic lows, the tight labour market is making it harder for companies to find qualified workers, particularly in high-skill roles, some say.

“We have a happy problem, but it’s still a problem,” Hamilton told Sunday Finance. She added that the agency is working closely with HEART/NSTA Trust and the Jamaica Productivity Centre to upskill the workforce and address generational shifts in motivation and work culture.

Meanwhile, to support longer-term capital mobilisation, the Government has introduced several legislative changes, including the Trust and Corporate Services Providers Act and the Segregated Accounts Companies Act, and is promoting the use of limited liability companies to pool investment for SEZ developments.