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Jamaica caught in a crisis of Utopia
Henley Morgan
Thursday, December 20, 2007
If there is one thing that the rapid ascent of Olint, Lewfam and other such foreign exchange investment clubs tells us, it is the degree to which the middle class has been trampled by the economic policies of the last 25 years. I have long suspected it to be so, but each story of a life transformed or restored through involvement in one of these schemes confirms how unviable and financially depressed this group has been allowed to become.
Cash Plus, which is a different and more controversial type of alternative investment scheme than those involved purely in foreign exchange trading, gives further expression to the desperation. It attracts by the tens of thousands those the system has made into a permanent socio-economic underclass.
The two situations together reflect what Chilean development specialist and author Manfred Max-Neef has dubbed the crisis of Utopia. They (the schemes) have their success in the fact that a significant number of our people are "losing the capacity to dream" of ever achieving a prosperous life through productive work or by other conventional means.
The courts are soon to determine the legality of these alternative investment schemes. But the verdict is already in on the failure of conventional and traditional prescriptions to solve the protracted economic and social quagmire in which the country is trapped. And trapped we are, for there can be no denying the fact that for over two decades (some would say four), our country has been like a ship without a sail stranded in the middle of a vast ocean of economic and social despair.
Max-Neef in his book, Human Scale Development, writes insightfully about the economic and social dilemma confronting underdeveloped (Third World) states. He does so from a Latin American perspective, which brings our own situation into sharp relief.
"There are different reactions to the current situation. There are those, for instance, who hold that disaster has not taken place after all. They make their point by stating that over the last two and a half decades income levels have more than doubled, that there has been remarkable economic growth in most of the region and exports have multiplied. All of this is true. There are, however, those who unveil the other side of reality: that poverty is increasing in the popular sectors; that social deficits such as inadequate housing have escalated; and finally, that the foreign debt is clearly unpayable and may increase our poverty and deplete our resources to structurally irreversible limits."
Where do the answers to these problems lie? With every change of government we hope that deliverance will come. But political rhetoric continues to out-distance practical action towards halting the slide. We look to the international development institutions. The solutions they impose are often too prescriptive and lacking in understanding of local realities to be effective. Caught in a downward spiral of inappropriate economic models or worse, inaction, civil society is too fragmental and immobilised by its own apathy to press for a change to the old order. In the absence of consensus as to the way forward or a collective uprising, we continue to produce the old results that we do not want.
What are people whose lifestyle and very existence are at risk in a stultifying no-growth environment supposed to do? Many will stand their ground and slug it out or seek a route to escape the suffering. For some the escape is through emigration. For others through corruption and crime. And for others still, through Olint, Lewfam and Cash Plus.
I have a theory that explains in part the practices dominating the investment behaviour of many Jamaicans these days. When people suffer serious deprivation of life's essentials for long periods, they develop pathologies that cause them to look for help from sources they would not ordinarily turn to, and to take risks no rational person would.
Until those we have elected to lead understand this and fix the under-performing economy, which is at the root of many of the country's ills, the promise of prosperity expressed in our national pledge will remain but an illusion, and a crisis of Utopia will prevail.
hmorgan@cwjamaica.com
Henley Morgan
Thursday, December 20, 2007
If there is one thing that the rapid ascent of Olint, Lewfam and other such foreign exchange investment clubs tells us, it is the degree to which the middle class has been trampled by the economic policies of the last 25 years. I have long suspected it to be so, but each story of a life transformed or restored through involvement in one of these schemes confirms how unviable and financially depressed this group has been allowed to become.
Cash Plus, which is a different and more controversial type of alternative investment scheme than those involved purely in foreign exchange trading, gives further expression to the desperation. It attracts by the tens of thousands those the system has made into a permanent socio-economic underclass.
The two situations together reflect what Chilean development specialist and author Manfred Max-Neef has dubbed the crisis of Utopia. They (the schemes) have their success in the fact that a significant number of our people are "losing the capacity to dream" of ever achieving a prosperous life through productive work or by other conventional means.
The courts are soon to determine the legality of these alternative investment schemes. But the verdict is already in on the failure of conventional and traditional prescriptions to solve the protracted economic and social quagmire in which the country is trapped. And trapped we are, for there can be no denying the fact that for over two decades (some would say four), our country has been like a ship without a sail stranded in the middle of a vast ocean of economic and social despair.
Max-Neef in his book, Human Scale Development, writes insightfully about the economic and social dilemma confronting underdeveloped (Third World) states. He does so from a Latin American perspective, which brings our own situation into sharp relief.
"There are different reactions to the current situation. There are those, for instance, who hold that disaster has not taken place after all. They make their point by stating that over the last two and a half decades income levels have more than doubled, that there has been remarkable economic growth in most of the region and exports have multiplied. All of this is true. There are, however, those who unveil the other side of reality: that poverty is increasing in the popular sectors; that social deficits such as inadequate housing have escalated; and finally, that the foreign debt is clearly unpayable and may increase our poverty and deplete our resources to structurally irreversible limits."
Where do the answers to these problems lie? With every change of government we hope that deliverance will come. But political rhetoric continues to out-distance practical action towards halting the slide. We look to the international development institutions. The solutions they impose are often too prescriptive and lacking in understanding of local realities to be effective. Caught in a downward spiral of inappropriate economic models or worse, inaction, civil society is too fragmental and immobilised by its own apathy to press for a change to the old order. In the absence of consensus as to the way forward or a collective uprising, we continue to produce the old results that we do not want.
What are people whose lifestyle and very existence are at risk in a stultifying no-growth environment supposed to do? Many will stand their ground and slug it out or seek a route to escape the suffering. For some the escape is through emigration. For others through corruption and crime. And for others still, through Olint, Lewfam and Cash Plus.
I have a theory that explains in part the practices dominating the investment behaviour of many Jamaicans these days. When people suffer serious deprivation of life's essentials for long periods, they develop pathologies that cause them to look for help from sources they would not ordinarily turn to, and to take risks no rational person would.
Until those we have elected to lead understand this and fix the under-performing economy, which is at the root of many of the country's ills, the promise of prosperity expressed in our national pledge will remain but an illusion, and a crisis of Utopia will prevail.
hmorgan@cwjamaica.com