Jamaica's debt hurricane -The Greece of the Western Hemisphere

[malaise]

http://www.chicagotribune.com/news/opinion/editorials/ct-edit-jamaica-0108-jm-20130108,0,6500520.story
<snip>
Americans concerned about the impact of public debt on the global recovery have focused — with good reason — on Greece. Closer to home, however, the tourism mecca of Jamaica illustrates the catastrophic effects of borrowing way too much, and the painful choices that follow. This saga, less familiar than Greece's, is a lesson for lawmakers in the U.S. and elsewhere.

The Caribbean nation actually is in worse financial shape than Greece: Jamaica has more debt in relation to the size of its economy than any other country. It pays more in interest than any other country. It has tried to restructure its loans to stretch them out over more years, at lower interest rates, with no success. Such a move would be risky for its already nervous lenders. So Jamaica is trying to wangle a bailout from a skeptical International Monetary Fund. Another deadline for a potential deal just came and went last week, though negotiations continue.

Jamaica is caught in a debt trap. More than half of its government spending goes to service its loans. The country can spend barely 20 percent of its budget for desperately needed health and education programs. Its infrastructure is faltering. It lacks resources to fight crime. It has little margin to recover from natural disasters such as Hurricane Sandy.

To set itself straight, Jamaica needs a restructuring, and a bailout with significant debt relief. No way can a small economy that has limped along with growth at less than half the global average for two decades pay back the fortune that it owes. But as with Greece, as with America, as with the state of Illinois, government leaders have balked at imposing the inevitable hardships. Saying no to favored constituents is no easier in Kingston than in Springfield.

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More Shock Doctrine - let the banks rape you or we'll do it for them. Still it was the politicians and their private sector friends who lied to the people and said we could not live without all these loans. Now they steal the pensions,. refuse salay increases and turn around and blame the citizens.
The IMF and special interests have led Jamaica down a path to poverty - devalue, deregulate, divest. Next we die.

[dipsydoodle]

1. From 5 years ago

How the IMF wrecked Jamaica.

Thirty years ago the US and the IMF moved to destabilise Jamaica’s radical government with disastrous consequences for the population, writes Abbie Bakan

When Michael Manley and his People’s National Party (PNP) were elected in Jamaica for a second term in December 1976, all who challenged imperialism and racism walked tall.

It showed that the country backed his refusal to adhere to the repressive terms demanded by the International Monetary Fund (IMF). “We are not for sale,” he announced to a cheering crowd of 35,000 at the National Stadium in the capital Kingston.

At the time, Manley was recognised as “the Socialist International’s most important representative in the Third World”, according to Caribbean scholar Fitzroy Ambursley.

http://www.socialistworker.co.uk/art.php?id=12349

So how / why did it go pear shaped after that ?

I'm not sure of the comparison to Greece whose demise lies partly in their absense of a recognisable tax collection system. Given Jamaica's past history its unlikely their own tax collection system varies much from the UK. Seemingly they have suffered from reduced exports in the recent past which presumably has contributed to current problems.

In the case of Greece the issue of high interest rates has been partly overcome with an ECB bailout at low rates which was mainly used to pay back earlier debt which was at higher rates. The price they paid was being "managed"

The irony is that Cuba who are insulated from the IMF by virtue of US sanctions seem to manage albeit with a struggle.

[malaise]

2. Michael did sell out in 1977

albeit at the barrel of the CIA's gun. The IMF was a political tool - still is - destroy any attempt at social democracy.

[Earth_First]

3. Yes, however the IMF has seen the error of their ways in the Keynesian economics...

Therefore; meaningful relief is on the way....

I'm sorry, malaise for the snark; I know that this directly affects you personally. Eventually there has to be a way for us to make it out of this mess where you and I are thought to be just as critical to it's success as the plutocrats.

[xchrom]

4. Du rec. Nt

[alcibiades_mystery]

5. Anyone who has been to Jamaica in tha last 15 years

knows that the idea that the Jamaican people are living high on the hog off government largesse is laughable. I've rarely seen the kind of poverty that I saw on the road from the Montego Bay airport to Negril, and I've lived in West Africa.