Audley 1/3rd Shaw making good with his promise

[Don1]

Record for Jamaica maybe. Not close to any record otherwise. Japan is currently in the 190 region and Singapore is above 100...

When he took over the economy was beyond crap, so an increase in leverage will have a significant impact on that ratio due to the very low GDP. After the first couple years of increased inflation due to the increase in money, the deleveraging process started and he was able to control inflation, increase GDP growth and significantly reduce the debt to GDP ratio until Gilbert send them an uppercut.

The economy was headed in the correct direction, even when the others Ps first took over, until they decided to unleash 1991 on the economy.

Nice points.

However the data shows that a full 5 years into his 2 terms in office the debt/GDP ratio was still approaching 200% and his time in office ended after 9 years with the ratio at 137%... above even the height of the FINSAC years....and higher than anything now.

Along with this consider that Seaga was a massive beneficiary of US grants and preferential trade treatment...because of his assistance to the CIA in destabilizing Jamaica and neutering Manley....helping to create the mess he inherited.

I recall Seaga being the FIRST foreign leader to visit Reagan in the White House...before Canada, Mexico & the UK leaders....I don't believe he was there to talk about reggae...it was about how best to refloat Jamaica as a "showpiece" to demonstrate that the American way is the only way... meaning nuff nuff money flowed to the Seaga regime...and the CBI was also essentially created for Seaga... free zones etc followed.

Omar was the absolute pits...but the talk of Seaga's regime being a period of real development and his being some kind of financial wiz kid is hot air...more like flatulence actually.

The guy didn't create it..but he certainly solidified our addiction to debt financing.... over production & productivity.

Just my take..

[Mosiah]

i have been following all of this and what is clear, one can use these numbers to paint almost any picture one wants!

[Assasin]

Not really. One can bypass it but in real terms the numbers are there to show.

[Me]

He is definitely no wiz kid. Simply a much better performer than the others who were horrible.

Back to the ratio. The first term under Seaga was a period of returning to stability (you, Lazie, mosiah and Maudib can argue about who was the real cause).

He had the growth toward the latter end of his second term and that is when the debt to GDP went into the low 100's. If you continue to increase productive capacity from there, decreasing the ratio is not a problem. However, when the govt decided to just leave everything to the "markets" and decided to FINSAC the place that has a much greater impact than any difference in Debt to GDP ratios. Additionally even though the outstanding debt seems much lower, the much higher interest rates on that borrowing minimizes the difference in actual payments.

[Assasin]

If you think Omar bad, check Froggy Mullings as MOF L0L!!!!!!

[Me]

Yes you can and that is why we usually find our politicians using the same set of numbers to tell two different stories.

[Gamma]

omar was just more dangerous....and unrepentantly dangerous!

[Assasin]

Well I wouldn't like to see Froggy staying 4 years. Part of the reason Claude Clarke left the PNP. Him point out a big gap in Froggy budget.

[Don1]

He is definitely no wiz kid. Simply a much better performer than the others who were horrible.

Back to the ratio. The first term under Seaga was a period of returning to stability (you, Lazie, mosiah and Maudib can argue about who was the real cause).

He had the growth toward the latter end of his second term and that is when the debt to GDP went into the low 100's. If you continue to increase productive capacity from there, decreasing the ratio is not a problem. However, when the govt decided to just leave everything to the "markets" and decided to FINSAC the place that has a much greater impact than any difference in Debt to GDP ratios. Additionally even though the outstanding debt seems much lower, the much higher interest rates on that borrowing minimizes the difference in actual payments.

Ok... a defensible position...from a technocratic perspective. The picture beneath the numbers is more instructive for me.

Point is Seaga had power for 9 years and essentially achieved stabilization through massive debt... starting Jamaica on the road to a ridiculous level of deficit financing.... then Omar/PNP compounded that with mismanaging liberalization leading to the meltdown....which 15 years later we have not recovered from.

Seaga's massive debt did not lead to much increase in productive capacity...and the "growth" under his regime was clearly not mainly due to production or productivity gains...but his big borrowing allowed increased internal trading activities due to FX being plentiful ...not a way to build a modern economy.

Unfortunately Jamaica has had no visionary finance minister... maybe Nethersole....just a set of hucksters, tribal activists and loan officers....Seaga numbered among them.

[Don1]

Foggy

[Don1]

good ting mi ah nuh politician

[Willi]

Bauxite collapsed in the early to mid 1980s and that was then the mainstay of the Jam down economy. Seaga also never got as much as promised (cant truss Babylon fully) and finally even what was his to get was held up for years as he fought with Rollins whose best buddy was Chairman of the House ways and means committee!

Ah keep telling yuh thatOmar was skilled at keeping things off the books!

Finally, none ah dem was no genius... we all know dat, but man betta dan man.

[Willi]

Seaga did manage to structurally adjust the economy away from excessive bauxite dependence. That is why we are where we are now.

[Don1]

ok...but we are now remittance-dependent...not all due to the DayWalker of course

The JLPNP nexus at work

[Willi]

Not fullly true Don.

First off, Seaga had to borrow when the alum WW prices collapsed. That is why the uneasy association with one Marc Rich. The cupboard was bare then. And he was in power for just over 8 years. Election was Feb 1989.

He did try to adjust the economy away from Alum and achieved some success. Him did salt with the Winter vegiies, but Nature messed him up with floods and drought. I guess he tempted fate by getting in bed with Eli Tisona who we now hear was a money launderer. God dont like ugly, as the yanks say.

We did have transient manufacturing back then with 807 program etc. In the late 1980, Jamaica was the number 1 underwear supplier to the USA, with a 14% market share. We had drip technology in agriculture, with temeprate weather STRAWBERRIES being grown in Jamaica. There were many small businesses formed that at the start were productive, plus a few ventures in computing and engineering. I met some of these people. Nascent exporting was also taking off small time to places like Cayman that had to import everything. Even the higglers were trading goods abroad to offset their need for hard currency to buy their imported goods. It was exciting times for small time entrepreneurs.

Two things killed the budding paradigm. One, our own propensity fi kill any golden goose. Unions killed the freezone thing and Pallicy killed the rest. Omar and his ilk used monetary "pallici" in such a way that it did not pay to take real business risk. Far better to trade paper and people caught on rather quick. Everybody was soon trying to ketch a "mover" pon the stacked market and after dat crash, it was govt paper. Agriculture had its usual nemeses, praedial larceny and short sightedness (I have stories). Engineering and manufact. never stood a chance with dem deh interest rates! All a Twickenham Park manufacturing now inna Trinidad...Carreras and Ricketts are 2 notable examples. Thanks Omar!

Omar was not faced with the same dire circumstances and we can attribute his decision more to licky-licky than necessity. Indeed, the whole FINSAC thing was quite avoidable and people were warning for a long time about the bubble being formed. Thanks again Omar.