This island has become a promise unfulfilled.

When Prime Minister Edward Seaga took over from a socialist leader five years ago, the Reagan administration hailed the change as a victory over leftist influence in the Caribbean and heralded Seaga's free-enterprise philosophy as the answer to the island's woes.

With his Caribbean Basin Initiative, President Reagan added the prospect of American investments and preferential treatment, as he said in 1982, to "open the window into a different time, a different future." The Harvard-educated Seaga agreed heartily, saying then: "Jamaica is the best example of what the Caribbean Basin Initiative can accomplish."

But since those bright promises and the discovery of kindred spirits in Kingston and Washington, the bloom has faded here and the sense of hope for better times has given way to grumbling about hardships that have grown more difficult to bear.

What the breezy optimism failed to foresee was that the bottom would drop out of Jamaica's bauxite market, which used to bring in two-thirds of the country's foreign exchange. In a classic Third World pattern, the main export lost its value by half, and heavy borrowing from foreign lenders got even heavier. As a result, more than 40 percent of the national budget now goes to service a $3 billion foreign debt and the government is seeking softer conditions from the World Bank after imposing a program of politically dangerous austerity.

In addition, a high-profile business promotion committee headed by David Rockefeller brought only a modest amount of investment. Now the committee itself has melted away. More than one in four Jamaicans is still out of work. Inflation runs at 30 percent a year, pushed along by a sliding devaluation of the Jamaican dollar.

"Seaga is squeezing everyone," said Kathleen Banton, who has begun peddling wares on the sidewalk nearby because her husband, a baker, cannot make enough to provide for their five sons. "I don't know how we're going to make it."

That kind of discontent apparently has made some Jamaicans look back fondly on the days when Michael Manley ran the island with a socialist orientation and struck up an alliance with President Fidel Castro of Cuba. Seaga does not face elections until 1988, but his Jamaica Labor Party has fallen behind in the polls because of the harsh economic conditions.

Manley's party boycotted an election called by Seaga in 1983, and Seaga's party won all 60 seats in Parliament.

"I'll just sit back and let it happen," Manley said in an interview at his People's National Party headquarters.

"He likes what Seaga is doing because Seaga is cleaning up the mess for him," smiled Carl Stone, a prominent sociologist and pollster.

Manley's administration in the 1970s often has been cited as an example of socialism's failure in undeveloped nations. Economists said it created part of the situation Seaga is fighting today. But Manley contended that the outcome so far of Seaga's attempt to stimulate swift prosperity has demonstrated that a return to free-market liberalism and to close cooperation with the United States also has its limitations in nations dependent on exporting raw materials.

Seaga argued that his restructuring of the economy would have put Jamaica on the right course by now if bauxite and alumina revenues had not declined by half since he took over, depriving the island of the foreign exchange his plans had counted on.

"That one figure has been our problem, that one commodity," he said in an interview. "The ground is slipping faster than we can build. But we're doing all the right things in building."

As a result of the foreign exchange decline, Seaga has pushed back his deadline for economic recovery until the end of the decade. Recently he invited a World Bank and U.S. aid team to visit the island to study his plea for more time on loan schedules to ease the pressure on Jamaica's 2.2 million inhabitants.

Since Seaga took over, the sympathetic Reagan administration has sharply increased U.S. aid, from $22.7 million in 1980 to $169.5 million in 1985. The 1986 request is $173 million.

Gasoline price rises, part of Seaga's painful adjustment, set off street disturbances last January in which seven people died. Seaga has said in recent speeches that the World Bank must realize the limits of Jamaican sacrifice, an argument similar to the ones Manley used to make in more bombastic language.

A recent risk analysis publicized here that forecast street trouble for this year set off a furor, raising fears for the tourist industry, which has become the island's largest foreign exchange earner. As a result of last January's trouble, 1985 tourism revenues fell by $12 million to $394 million after several years of sharp increases, according to Joe Issa of the Jamaica Tourist Board.

Economic analysts said fear of more political violence -- 500 died in 1980 electoral clashes -- has been one reason large-scale U.S. investors have not heeded Reagan's call to Jamaica. Other factors, probably more important, have been the recent recession and fears that the island's balance-of-payments problems could lead to restrictions on getting capital back to the United States, they said.

Corrine McLarty, managing director of the government's Jamaica National Investment Promotion, said investors, most of them Jamaican, have started 484 projects and created 25,000 jobs since Seaga took over in 1980. Only 85 have been U.S. investments, worth $47 million at the current exchange rate, she estimated.

U.S. investors have participated with Jamaican partners in other investments of about the same amount, she said.

In any case, this has not come close to offsetting the loss in bauxite revenues. Carlton Alexander, chief executive officer of Grace Kennedy, one of the island's largest business conglomerates, said Jamaicans both in government and outside must realize that attracting investment and righting national finances will take more time.

"There is no quick fix," he added.