RBSC

**Don1** · January 10, 2012, 07:30 PM

Di 2 JC man dem aggo werk it out .. 007 and Trevor di Babylon rep

HL · January 10, 2012, 07:34 PM

IMF has been involved in Jamaica's economy since Michael Manley.....

The IMF is a BANK. Banks are designed to make money.

There are lots of third world countries who can't wean themselves (away) from these money hogs.

**Sir X** · January 10, 2012, 09:02 PM

Manley I thought it was the financial genius seaga that carried out a civil war via CIA sabotage to drag us there in 1980 ?

Ben ?

Me · January 10, 2012, 09:23 PM

in the late 70's an agreement with the IMF was negotiated.

**Sir X** · January 10, 2012, 09:29 PM

How late ? and how soon after was the election called ?

**Sir X** · January 10, 2012, 09:47 PM

I was a child then, so my history is of research,depending on whom you speak to JLP/PNP...Manley was an economic fool and the CIA/US economic war had nothing to do with our turbulent economic late 70s and Seaga was a genius in the politically calm 80s which ladened us with massive debt and coke.

How the IMF wrecked Jamaica

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Writing on the wall. The IMF destroyed Jamaica’s economy

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.

This was a test case – for both the IMF and the anti-imperialist movement. The proposed IMF structural adjustment programme for Jamaica was to be a model for neoliberalism and global debt negotiations throughout the Third World.

The story of the rise and demise of Manley’s battle with the IMF is rich in lessons for today’s anti-globalisation movement.

Jamaica is a tiny island nation in the Caribbean, the home of Bob Marley, reggae music and the birthplace of pioneering black nationalist leader Marcus Garvey.

Ever since Christopher Columbus landed and mistakenly thought himself in India over 500 years ago, the Caribbean islands have also been the object of colonialist occupation and exploitation.

Michael Manley was a symbol of resistance not only in Jamaica but internationally. He first came to office in the 1972 election.

Manley’s early years in power saw a number of important progressive reforms for the population.

The previous ban on Marxist and Black Power literature was lifted. Secondary education was made free and accessible, and a partial land reform policy was enacted.

Provoked

The foreign-owned electricity, telephone and bus companies were nationalised.

In January of 1974, Manley’s government announced a plan to alter the system of tax breaks offered to US and Canadian bauxite (aluminium ore) companies based in Jamaica.

These companies mined aluminium for the war industry. The PNP annulled previous agreements and imposed a production levy on all **bauxite mined or processed in Jamaica.

This ruling severly provoked the anger of the US and other ruling classes. A massive, and now well-documented, destabilisation campaign followed.

Aluminium and bauxite processing were shifted to other locations. The levy was claimed to be illegal and contested by the bauxite companies, which filed actions with the World Bank’s international centre for the settlement of investment disputes.

Local businesses, which had gone part way with Manley on the nationalisation of foreign businesses, now buckled and found common cause with their international allies.

Lay-offs and soaring price increases set off an inflationary spiral that wiped out previous wage increases. Foreign capital inflow plummeted, and the CIA became involved with fomenting local political rivalries.

A terror campaign was unleashed as young Jamaica Labour Party (JLP) members found ready access to weapons in a guns-for-ganja trade.

Sanctions

At first Manley attempted to hold a steady course.

Fuelled by popular support among Jamaica’s working class and peasantry, the radical prime minister resisted the terms of an IMF reform package.

In the December 1976 election Manley was re-elected in a landslide, winning 47 of the 60 seats in the parliament.

But after Manley’s refusal to adhere to the terms of the IMF, the economy was strangled by sanctions while a media campaign sent a wave of fear among potential tourists.

Lay-offs increased, interest rates skyrocketed and everything from soap to canned fish was in desperately short supply.

This was the limit of social democratic reform. Manley would soon prove an unreliable ally of the poor and the working class – and there would not be sufficient independent organisation among the mass of the Jamaican working class to steer their own course when he started to retreat.

In 1977 Manley announced Jamaica’s “People’s Plan” for economic and political reform.

Despite radical rhetoric, by May of that year Jamaica had accepted an IMF “standby agreement” of £38 million to ease the balance of payments crisis.

The IMF re-established a line of credit – with massive strings attached.

The loan was conditional on an attack on the standard of living of the population. The poorest were hit the hardest, with a dramatic cut in public spending as the leading edge of the programme.

As Jamaica was put to various IMF “tests”, repeated failures led to more and more regulation of the island’s domestic economic programmes.

Confusion and despair spread among Jamaica’s population, especially young students and the poorest sections of workers and peasants. Political violence and the fortunes of the black market soared.

By the election of October 1980, the JLP under the leadership of Edward Seaga was back in office, and with the largest margin of victory in its history – 52 seats to the PNP’s eight.

Only a year earlier, revolutions in Grenada and Nicaragua indicated that there was a growing mood of opposition to the US-dominated market model in the region.

But now Jamaica had set a pattern of moving halfway in opposing the grip of the imperialist market, and then backing down.

The JLP’s Seaga government was welcomed by the US as the new model of the times. This gave confidence to the likes of Ronald Reagan and Margaret Thatcher – and heralded the rise of neoliberalism.

At the end of the eight years of Manley’s “democratic socialism”, the average income in Jamaica was 25 percent lower and the cost of living 320 percent higher.

Like many social democratic governments before and since, Manley’s reformist politics proved incapable of mounting the challenge needed to halt the force of global capital.

But at the end of Seaga’s term, Jamaica had paid out a total of £443 million to its foreign creditors, including £176 million to the IMF.

Jamaica’s foreign debt had grown to over £2.2 billion, among the highest per capita in the world.

It was in this context that Manley returned as prime minister to lead another PNP government in 1989.

Poverty

He had abandoned the left rhetoric of his earlier government. Instead the market was seen as the triumphant model to pursue. However, even on the terms set by the IMF, Jamaica had clearly failed to meet anticipated development goals.

Rather than economic prosperity, Jamaica endured further decades of insufferable poverty. Today, even the IMF’s own economists are starting to recognise the problem.

In a 2006 IMF-commissioned working paper, Public Debt and Productivity: The Difficult Quest for Growth in Jamaica, author Rodolphe Blavy struggles with the apparent “puzzle” of Jamaica’s low growth rates.

He concludes that perhaps massive debt might have something to do with it, noting that Jamaica is “among the most indebted countries in the world”.

Today we are in a new period of radical reform in the Global South. There are certainly many similarities between the politics of Hugo Chavez and the first government of Michael Manley.

But there are also differences. Venezuela has far more resources than Jamaica. The US is a less powerful player relative to its competitors in the world economy than 30 years ago.

And if there is a strong, independent movement of workers and the poor, the forces of resistance may well have a better chance of staying the course.

But the history of Jamaica’s battle with the IMF makes it clear that if the grip of imperialism is to be definitively challenged, it must be replaced with another system based on very different priorities.

And it will be the working classes and the poor, not the corporate bosses, who will have to set those priorities.

Michael Manley 1924-1997
Norman Manley, Michael’s father, was the founder of the People’s National Party.
The rival Jamaica Labour Party was founded in 1962 by Michael’s cousin Alexander Bustamante.
Michael Manley won the Central Kingston seat in the Jamaican Assembly in 1967. He retained this seat in repeated elections until his retirement in 1992.
Abbie Bakan is the author of Ideology and Class Conflict in Jamaica: The Politics of Rebellion, which is published by McGill-Queen’s University Press.

**Sir X** · January 10, 2012, 10:00 PM

FRIDAY, NOVEMBER 18, 2011

Jamaica must solve her structural issues
At the time of writing I am sitting and waiting on a connecting flight to Suriname, to do a presentation on the IMF impact on the region. By the time this is published it will be done, but is worth mentioning. The fact is some persons think of the IMF as wicked imperialists (primarily because of political propaganda) and others think of the current programme as a panacea. The truth is that both points of view are incorrect.

As I prepared and thought about the presentation, I thought that as a region we are too caught up with the IMF. After all it is just a bank to countries, seeking to get a return on its funds and ensure it gets repaid. The IMF does not and never will have the solution to our problems. We need to have it. So our flirting with the IMF in the 70s, 80s, 90s, and today has more to do with our own inadequacies than the "wicked IMF policies". In fact, before now, the only time that post IMF saw any significant growth was in the 80s when Seaga took the bold decision of playing hard ball until he got the terms that were best for the country. Outside of that, no one else was brave enough to face down the IMF.

So here we are again once ore in our flirtatious but unstable relationship with the IMF. This time, however, I think people are of the view that the IMF programme has more to do with us than them. The fact is that if we were prudent in managing our affairs then we wouldn't have to keep courting the IMF. It is because of our own irresponsibility, and inability to achieve true economic independence after leaving the home of colonialism in 1962, that economic independence continues to evade us, betraying the wishes of Norman Manley and Bustamante. In plain English, our leaders have turned us into adults incapable of fending for ourselves, having to hold on to the frock tail of our "old colonial mothers".

The fact also is that after the IMF programme we won't be in any better position if we do not address the fundamental structural issues of our economy. The only time that we have effectively done so was in the second half of the 80s, when we managed to reduce our debt to GDP ratio from 212 per cent to 90 per cent, and the economy started to grown an average of six per cent. The verdict is still out on the current programme, and while the policy reform directions are positive the pace is concern.

So as I wrote in my book in 2009, although for the 14 years to 2007 the economy recorded growth, the fact is that the GDP structure was showing that the only way we could continue growing on that path was by either borrowing or inflation. History shows that the former was chosen. So when the recession hit us in 2009, we had no choice but to fall down at the feet of the IMF, as we had been borrowing to create an illusion of growth, and when the credit card was no longer available we all know what happened. And Jamaica wasn't alone, as we were in the company of the US and Europe, if that is any consolation.

So the government had no choice but to go to the IMF, and was prudent in first restructuring the debt (JDX) - albeit six months late - and also accepting that reforms such as public sector rationalization, tax, pension, and divestments had to be done. The problem is that almost two years after, while some of these things have happened or started, it has not been sufficient to take advantage of the breathing space provided by the IMF programme funding and JDX. So in 2011 the economy is still as structurally weak as in 2007. I remember over the past three years I was at pains to point out that our preoccupation with scandals and such things would prevent us from focusing on the important structural issues.

Well here we are

What is needed is still as relevant as when i wrote my book in 2009. In fact the recommendations could apply today as if it was written yesterday. The economy still has significant structural issues, evident in the recently published June balance of payments (BOP) numbers. The BOP is the weather vane of the economy's direction. For the six month period the current account deteriorated by over US$500 million. The main reason being rising oil prices. Does this sound familiar? It should because we have been paying lip service to an energy solution since the 70s.

At the same time we have not only failed to implement the much needed tax reform but we have managed to produce a document that says the most important reason for tax reform is to raise money for the fiscal accounts. Does this sound like the cherry picking from the Matalon report that took place in 2005? Is it coincidental that the last time tax reform for economic reasons took place was in the mid 80s, or is there a link between tax policy objective and growth. Certainly when Ireland was growing what they did prior was to cut capital gains tax in half and reduce corporate tax rates to 15 per cent. Their fiscal and monetary irresponsibility after that undid the gains however.

My own belief is that the current reform policies are the right direction and needs to be continued. The truth is that there are not many other solutions that can be offered. The problem has been the pace of reform. That is (i) the IMF targets are too aggressive, causing social dislocation, and (ii) the much needed reforms have taken too long. In addition to this there has not been much emphasis on protecting citizens' rights and enforcing a disciplined society. The police commissioner is to be credited with dealing with corruption, but there is not enough being done to protect citizens from police abuse or enforce road discipline. The charter of rights was finally passed, but we don't want citizens to have to seek enforcement of rights, but for the rights to be respected from the start.

Nowhere is this inability to address our structural issues more prominent than in the Global Competitiveness Report, where it not only shows us falling in the rankings but clearly states that the main challenges to our competitiveness are crime, bureaucracy, and taxation. It is ironic because the reforms currently being pursued are supposed to address these issues. The problem is that we spend too long to enact change and too much time pursuing political rhetoric.

Unfortunately with election in the air, we might have more rhetoric and less issues being discussed. But maybe this is what Jamaicans want as they still hang on to buses as they go to political meetings to hear the latest personality attacks.

The result is that as we approach the end of the IMF agreement, the economy is still challenged for sustainable development, as in 2007. The difference is that over the past two years we have seen a significant global recession and there has been a move in the right direction with respect to policy. So the next time we think about the effect of IMF policies, let's look in the mirror first.

Posted by Dennis Chung at 5:07 AM

**Sir X** · January 10, 2012, 10:11 PM

World Bank leading Jamaica?
Posted March 24, 2010
Filed under: Uncategorized | Tags: 2010, bank, debt, development, economy, gdp, IMF, jamaican, ratio, strategy, world |

Boy Leading a Blind Man - The World Bank Photo by Ramin Aliyev
The World Bank has given Jamaica 400 million US dollars to prop up the economy and reduce the debt to GDP ratio. It’s part of a four year development strategy which it’s hoped can also help farmers and reduce crime and violence.

This comes after the IMF also finalized a $1.27 billion loan for Jamaica on Feb. 4, the first time in 15 years. I have talked about Jamaica and the IMF on this blog before here.

The inter american bank has also put significant money in. All this has come after Jamaica made a $7.8 billion domestic debt
exchange in January. This means they have exchanged bonds already out there, which they repay to bond holders at interest rates of up to 28 percent, they have exchanged these for longer dated, lower yielding bonds. Read more here. It was hoped this would raise Jamaica’s credit rating, but this didn’t happen as ratings agencies deemed this whole thing a debt default. Although the ratings agencies did agree that this move would be good for Jamaica in the long run.

It’s an ambitious strategy, there’s money to play with now, let’s hope the politicians spend it wisely and that there is a real committment to stamp out corruption, so that it can actually lead to growth and stability. If this opportunity is squandered, the next generation in Jamaica will be even more screwed than it is already.

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**Sir X** · January 10, 2012, 10:19 PM

This is interesting IMF predicting growth under its progam..lol

http://www.cepr.net/documents/public...qr-2011-04.pdf

Seems we have contact with the IMF from 73 ,but the real kicker started in may 1977.

**Time** · January 10, 2012, 10:31 PM

Originally posted by Karl View Post

IMF officials to arrive January 17 for talks Published: Tuesday January 10, 2012 | 4:41 pm

The Minister of Finance and Planning Dr. Peter Phillips today confirmed that he has initiated steps to restart discussions with the International Monetary Fund (IMF).

A delegation from the fund will visit Jamaica starting January 17.

The mission will meet with the Minister and his team to discuss the current status of the Jamaican economy and the prospects for the medium term.

The exploratory meetings with the fund staff will include discussions on the
Government’s priorities and will aim at identifying the work plan and modalities of a continued formal relationship with the Fund.

In this connection, the Minister said, the Government’s policy preference is for an arrangement that provides sufficient time to nurture a sustainable acceleration of growth while completing the fiscal and other economic reforms.

editorial@gleanerjm.com

http://jamaica-gleaner.com/latest/article.php?id=34460

Do you believe that they will go for a JEEP ride?

**Sir X** · January 10, 2012, 10:33 PM

To sum it up , they borrowed from international creditors,IMF World Bank with excessive interest rates max out the credit card , left it and started borrowing from local creditors ,maxed it and now back to international creditors.

I think our time is up , if we havent learnt to come up with something ,different we are screwed.Both credit cards are maxed !

The economic mask is off.

**Willi** · January 11, 2012, 05:03 AM

Shhh, tek time...

And man deh yah a advocate fi spend whatever money fi symbolism while storm ah come and we defenseless.

Nothing lick mi suh hard like the numbers in the workforce. 1.3million and 942K untrained, and we want to spend time and money pon symbolism? Pon changing uniform and debating buggery law and all kinds a red herrings????

Merciful father, we corner dark, bad, bad.

PEOPLE (fun and joke aside), Labarite, Soshaliss, Neutraliss, and Oddas, we have real work to do. Even if we did not have the global storm, Jamaica would be in crisis!!!!! Time fi batten down and address the real issues. We cyaaan have 350K carrrying the whole country! Mi haffi gree wid King Jawge pon disyah one. Mi never know seh it was suh bad!!!!

Free eddikashon and gi wi a fighting chance!
"Please Father please, this world we live
has faltered
Deliver us from all this evil and pain
God Bless the heart that loves unto his brother
Praising out your Name"

**Skeng DX** · January 11, 2012, 08:10 AM

And man deh yah a advocate fi spend whatever money fi symbolism

how much u think this going to cost?

u have 3 options

1-a republic with a ceremonial president(similar to gg minus th e QUEEN)

2-one with the president selected by parliament

3-a president selected by the people of Jamaica

**Willi** · January 11, 2012, 09:30 AM

Cost is not just money...

It's management time, focus and resources.

Wuk is bunning in di fields!

RBSC

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IMF officials to arrive January 17 for talks

IMF officials to arrive January 17 for talks

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