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The Jamaican state: failed or fixable?
Selwyn Ryan
Sunday, December 6th 2009
Are things falling apart in Jamaica? Is the Jamaican state likely to succumb to state capture as Transparency International fears? I recently spent a few days there and could not help being concerned about what is taking place in one of my favourite Caribbean island states.
Lurid newspaper headlines routinely told stories of spiralling crime, endemic corruption, and the harsh conditionalities that have to be met in order to access funds.
One headline asked: How Bad Can it Get? Another told about on/off negotiations with the IMF, and warned that Jamaica would get no IMF funding unless Air Jamaica was privatised! Yet another headline wondered whether the IMF was Jamaica’s Santa Claus.
The harshest headline of all appeared in the Economist of November 14 which asked speculatively whether Jamaica was ’fixable’?
The paper noted that Prime Minister Golding and the Jamaica Labour Party (JLP) which came to power two years ago, after 18 years in the wilderness, had not been able to fix much, and that Jamaica was literally on the edge of an abyss.
The Economist noted that the collapse of the world economy had impacted negatively on Jamaica’s three main sources of state revenue, remittances from Jamaicans abroad, the bauxite industry which has collapsed, and from tourism. All of these dramatic events were previously regarded as unthinkable. Certainly no one expected them to happen all at the same time!
The markets are jittery about Jamaica as they are about Dubai. Barclays’ Capital Bank credit analyst issued warnings that Jamaica ’is approaching the point of no return and that it will take more than fiscal adjustments to regain sustainability for the long term’. Barclays’ experts anticipate a decline in output of 5.5 per cent which would make it difficult for Jamaica to meet its revenue targets.
Jamaica is said to be behind in its revenue collection by $16 billion. The rating agencies, Moody’s, Standard and Poor’s and Fitch Ratings also added to Jamaica’s agonies.
Moody’s downgraded Jamaica’s bonds from B2 to CAA1 with a negative outlook, which indicated to investors that they were subject to very high risk. Standard and Poor’s also downgraded Jamaica’s bonds to triple C with a negative outlook, signalling that the debt issue was ’vulnerable. Fitch downgraded Jamaica’s long-term foreign and local currency Issuer Default Ratings from ’B’ to CCC .
When uncertainties about IMF funding are factored in, one understands why there is an air of gloom and doom in circles where the implications of this are well understood. The concern is that even if budget support were to be forthcoming, sooner or later Jamaica will have to face its creditors. Monies borrowed would need to be repaid. Will Jamaica become the Caribbean’s Argentina?
Complicating the economic situation is the political situation. Crime continues to gallop. Changes made at the top of the national security system have made no difference whatsoever.
The fired Commissioner of Police has made allegations about linkages between the ’Dons’, the gangs, and the politicians (gangs accounts for 80 per cent of the homicides, and 60 per cent of the crimes committed are drug related) which interfere with the operations of the criminal justice system.
The Deputy Commissioner of Police, who has since returned to the UK, was also frank. As he despaired, ’the patient is terminally ill and should be put down. The cost will be great, but the cost will be greater from not doing. If you don’t fix crime, you can’t fix the economy’.
The Government’s inability to resolve the ’Dudus’ affair complicates the matter even further. ’Dudus’, the Don in charge of West Kingston, the constituency controlled by the Prime Minister, is wanted by US authorities for trafficking drugs into the US.
Jamaican political honchos are reluctant to extradite ’Dudus’(who it is said has rights like any other Jamaican citizen), not only because he is part of the politically articulated criminal network, but also because it is feared that he will not go down quietly or alone.
Many JLP politician business elites and senior police are reportedly obligated to him. Every Don has his ’bredrin’ in the police and every political leader feels obliged to go to the colourful Dons funerals that occur from time to time.
A refusal to extradite the wanted felon will surely complicate the business of getting American support for the funding needed to deal with the country’s pressing economic and social problems.
Interestingly, JLP politicians have begun to talk about the ongoing transformation that is said to be taking place within ghettoes (aka as garrisons).
Prime Minister Golding recently opined that there is a truce between garrison communities and that it is now relatively safe for members of previously warring communities to cross the borders that rigidly separated them in the past.
He noted that members of blood- soaked communities now play football against and for each other’s teams. Before, soldiers, gun in hand, would have had to monitor the games. Golding also noted that his government makes resources available to children in opposition controlled garrisons since ’dem a smaddy (somebody) pickney too’.
Former JLP Prime Minister, Eddie Seaga has likewise been very critical of commentators and analysts who were ’too blind to see the transformation that was taking place in West Kingston.’But many a peace treaty has been signed between warring communities in the past, and one can only hope that the recent ceasefires last longer than the false dawns that have been witnessed before.
The key question on every one’s lips is whether Jamaica’s enfeebled is fixable. Most of those to whom I spoke believe it is, though not in the immediate future. My students went through all the objective indicators listed in the Fund for Peace failed state Index and agree that Jamaica could be listed as a failed state. They, however, always say that when you look at the ’big picture’, it does not qualify. It is collapsing perhaps, but not quite collapsed. The state is still legitimate and basic institutions have not all collapsed.
Newspaper columnists like Mark Wignall also has problems pulling the trigger to put down the patient because of the psychological consequences that follow. As he told someone who had openly declared that Jamaica ’could not come back’, ’If we all take that approach, then let us declare the patient dead and vacate the place. I am not prepared to do that.’
Somehow, while many of the specific indicators seem to point to progressive failure, there are other features which suggest that the patient is not fully dead and could recover from the comatose state in which it currently finds itself. Let us hope the optimists prevail. Let us hope that we do no repeat Jamaica’s errors.
The Jamaican state: failed or fixable?
Selwyn Ryan
Sunday, December 6th 2009
Are things falling apart in Jamaica? Is the Jamaican state likely to succumb to state capture as Transparency International fears? I recently spent a few days there and could not help being concerned about what is taking place in one of my favourite Caribbean island states.
Lurid newspaper headlines routinely told stories of spiralling crime, endemic corruption, and the harsh conditionalities that have to be met in order to access funds.
One headline asked: How Bad Can it Get? Another told about on/off negotiations with the IMF, and warned that Jamaica would get no IMF funding unless Air Jamaica was privatised! Yet another headline wondered whether the IMF was Jamaica’s Santa Claus.
The harshest headline of all appeared in the Economist of November 14 which asked speculatively whether Jamaica was ’fixable’?
The paper noted that Prime Minister Golding and the Jamaica Labour Party (JLP) which came to power two years ago, after 18 years in the wilderness, had not been able to fix much, and that Jamaica was literally on the edge of an abyss.
The Economist noted that the collapse of the world economy had impacted negatively on Jamaica’s three main sources of state revenue, remittances from Jamaicans abroad, the bauxite industry which has collapsed, and from tourism. All of these dramatic events were previously regarded as unthinkable. Certainly no one expected them to happen all at the same time!
The markets are jittery about Jamaica as they are about Dubai. Barclays’ Capital Bank credit analyst issued warnings that Jamaica ’is approaching the point of no return and that it will take more than fiscal adjustments to regain sustainability for the long term’. Barclays’ experts anticipate a decline in output of 5.5 per cent which would make it difficult for Jamaica to meet its revenue targets.
Jamaica is said to be behind in its revenue collection by $16 billion. The rating agencies, Moody’s, Standard and Poor’s and Fitch Ratings also added to Jamaica’s agonies.
Moody’s downgraded Jamaica’s bonds from B2 to CAA1 with a negative outlook, which indicated to investors that they were subject to very high risk. Standard and Poor’s also downgraded Jamaica’s bonds to triple C with a negative outlook, signalling that the debt issue was ’vulnerable. Fitch downgraded Jamaica’s long-term foreign and local currency Issuer Default Ratings from ’B’ to CCC .
When uncertainties about IMF funding are factored in, one understands why there is an air of gloom and doom in circles where the implications of this are well understood. The concern is that even if budget support were to be forthcoming, sooner or later Jamaica will have to face its creditors. Monies borrowed would need to be repaid. Will Jamaica become the Caribbean’s Argentina?
Complicating the economic situation is the political situation. Crime continues to gallop. Changes made at the top of the national security system have made no difference whatsoever.
The fired Commissioner of Police has made allegations about linkages between the ’Dons’, the gangs, and the politicians (gangs accounts for 80 per cent of the homicides, and 60 per cent of the crimes committed are drug related) which interfere with the operations of the criminal justice system.
The Deputy Commissioner of Police, who has since returned to the UK, was also frank. As he despaired, ’the patient is terminally ill and should be put down. The cost will be great, but the cost will be greater from not doing. If you don’t fix crime, you can’t fix the economy’.
The Government’s inability to resolve the ’Dudus’ affair complicates the matter even further. ’Dudus’, the Don in charge of West Kingston, the constituency controlled by the Prime Minister, is wanted by US authorities for trafficking drugs into the US.
Jamaican political honchos are reluctant to extradite ’Dudus’(who it is said has rights like any other Jamaican citizen), not only because he is part of the politically articulated criminal network, but also because it is feared that he will not go down quietly or alone.
Many JLP politician business elites and senior police are reportedly obligated to him. Every Don has his ’bredrin’ in the police and every political leader feels obliged to go to the colourful Dons funerals that occur from time to time.
A refusal to extradite the wanted felon will surely complicate the business of getting American support for the funding needed to deal with the country’s pressing economic and social problems.
Interestingly, JLP politicians have begun to talk about the ongoing transformation that is said to be taking place within ghettoes (aka as garrisons).
Prime Minister Golding recently opined that there is a truce between garrison communities and that it is now relatively safe for members of previously warring communities to cross the borders that rigidly separated them in the past.
He noted that members of blood- soaked communities now play football against and for each other’s teams. Before, soldiers, gun in hand, would have had to monitor the games. Golding also noted that his government makes resources available to children in opposition controlled garrisons since ’dem a smaddy (somebody) pickney too’.
Former JLP Prime Minister, Eddie Seaga has likewise been very critical of commentators and analysts who were ’too blind to see the transformation that was taking place in West Kingston.’But many a peace treaty has been signed between warring communities in the past, and one can only hope that the recent ceasefires last longer than the false dawns that have been witnessed before.
The key question on every one’s lips is whether Jamaica’s enfeebled is fixable. Most of those to whom I spoke believe it is, though not in the immediate future. My students went through all the objective indicators listed in the Fund for Peace failed state Index and agree that Jamaica could be listed as a failed state. They, however, always say that when you look at the ’big picture’, it does not qualify. It is collapsing perhaps, but not quite collapsed. The state is still legitimate and basic institutions have not all collapsed.
Newspaper columnists like Mark Wignall also has problems pulling the trigger to put down the patient because of the psychological consequences that follow. As he told someone who had openly declared that Jamaica ’could not come back’, ’If we all take that approach, then let us declare the patient dead and vacate the place. I am not prepared to do that.’
Somehow, while many of the specific indicators seem to point to progressive failure, there are other features which suggest that the patient is not fully dead and could recover from the comatose state in which it currently finds itself. Let us hope the optimists prevail. Let us hope that we do no repeat Jamaica’s errors.