Jamaica teeters on an economic precipice after years of stagnation

Jamaica teeters on an economic precipice after years of stagnation

By Robin Wigglesworth in Kingston, Jamaica

Three years ago Dwight Lindsay walked out of Kingston’s General Penitentiary after serving a decade in the sprawling concrete block in Jamaica’s capital for stabbing a man to death. Keen to stay out of trouble, Mr Lindsay said he was a changed man – but so were the country’s fortunes.
A long-torpid economy nosedived while he was in jail, and unemployment became rampant. So Mr Lindsay – a gaunt man of 39, scarred from prison fights – has to “hustle” for a living. That means washing cars parked along Kingston’s palm-lined waterfront and hoping the owners will return to hand him some Jamaican dollars.

The downturn is squeezing everyone, though, and people have become noticeably less generous. Mr Lindsay struggles to make ends meet and sleeps rough on the waterfront. The temptation to return to crime can be overwhelming. “Sometimes I want to steal something,” he admits. “The heart and the mind argue.”
On an island famed for reggae and athletic prowess but notorious for its high crime rate, Mr Lindsay’s battle to earn an honest living tells much about the complicated economic and social problems that Jamaica faces.

While many previously buoyant island states across the Caribbean are now struggling, Jamaica’s crisis is the deepest. Virtually every Jamaican is feeling the impact of a protracted economic stagnation, now exacerbated by the austerity mandated by an International Monetary Fund bailout signed earlier this year.

Despite the $2bn rescue, Jamaica is teetering on the brink of financial collapse. After two restructurings in three years, government debts still amount to 143 per cent of the economy’s annual output.

Even a tropical storm could cause enough damage to push the country’s strict bailout programme off course, admits Peter Phillips, Jamaica’s finance minister. “We are extremely vulnerable to any unanticipated shocks.”
Jamaica is not alone. Caribbean countries are lobbying furiously for an extensive international debt relief and investment programme, as local politicians become increasingly anxious over the social impact of the region’s economic crisis and the resulting government austerity.

Most of the dozen anglophone countries in the tropical archipelago off the coast of the US are struggling with large government debts and lacklustre economies after the global financial crisis hurt tourism, the dominant industry of the Caribbean.
Jamaica is already a serial IMF programme failure. Among the international organisations that jointly bankrolled the recent rescue – the IMF, World Bank and the Inter-American Development Bank – there is some private scepticism that Jamaica will succeed this time.

To ensure Jamaica’s compliance the IMF has required that most of the austerity measures and economic reforms be implemented almost immediately; still, Moody’s, the rating agency, earlier this year said there was a “high probability” that Jamaica would be forced to default on its debts again.

“Given the scale of the problem and the history of programmes that went off-track establishing credibility is paramount, and for this reason the programme is very front-loaded,” said Gian Maria Milesi-Ferretti, a senior IMF official.
Around Jamaica there is recognition of the depths of the country’s troubles, and grudging acceptance that the next few years will be difficult. But there is also widespread bitterness towards the country’s political elite for its management of the crisis.

The anglophone islands in particular are becoming increasingly worried about the social effects of the crisis.
The fear is most palpable in Jamaica and brutally raw in the neighbourhood of Tivoli Gardens, a crime-ridden jumble of decaying concrete blocs and wood shacks in west Kingston. On one side of the neighbourhood lies Coronation Market, where locals find occasional work. On the other is May Pen Cemetery, where gangs occasionally dump the bodies of their victims.

The neighbourhood was long ruled by Christopher “Dudus” Coke, a drug lord with close political ties. After intense US pressure, the Jamaican government arrested and extradited Mr Coke in 2010. But the fierce crackdown needed to flush the kingpin out of Tivoli – coupled with the insecurity of the resulting power vacuum – has fed intense resentment.

“Things were better with Dudus,” complains Keisha Sames, a Tivoli resident. “We have no money, we have no jobs and we’re hungry. It’s worse, worse.” Horace Gordon, a drama teacher who runs a literacy programme in Tivoli, chimes in: “If you don’t have food, you will rob people.”
We have no money, we have no jobs and we’re hungry.
- Keisha Sames, Tivoli resident

The number of murders has tumbled since the arrest of Dudus and the tough countrywide security operation that followed. But the homicide rate remains among the highest in the world, and as gangs have regrouped there are signs that crime is on the rise again.
One of the biggest challenges has been a police force that activists say is riddled with corruption and prone to extra-judicial killings. Owen Ellington took over the Jamaica Constabulary Force and has sacked more than 400 policemen since then. But he admits that graft remains a problem. “The work is not complete, and even after I have left the job there will probably be more to do for the future commissioner,” he says.

Tackling Jamaica’s security problem would be easier if economic growth returned and created more jobs. But the outlook remains murky. The IMF forecasts that GDP will expand by only 0.4 per cent this year, and 1.3 per cent in 2014. Even these cautious predictions are vulnerable given the uncertain economic impact of government austerity.

In addition to a fiscal belt-tightening, the central bank is letting the Jamaican dollar slowly depreciate. Brian Wynter, the governor, hopes this will boost exports and make local resorts more competitive. But in the short run it is fuelling inflation, squeezing ordinary Jamaicans further and feeding anger against the government. Some officials fear that the populace’s patience with austerity is wearing thin.

Mr Phillips compares his situation to that faced by Christopher Columbus when he discovered America. His sailors were petrified that they would tip over the edge of the world at any moment, until they spied a bird with a leaf in its beak – a sign that dry land was near. “Growth is my bird with a leaf,” he says.
In the streets of Kingston, Mr Lindsay also tries to remain optimistic. Unlike many of the people he met in prison he is literate, and is applying for a job as a porter at the main hospital in town. In the meantime, he said he would keep trying to stay on the straight and narrow but, as he says in his heavy but lyrical Jamaican accent: “It’s tough tough tough, rough rough rough”.

The Financial Times spent two weeks reporting across the Caribbean, travel funded in part by the Pulitzer Center on Crisis Reporting, to explore the impact of the region’s economic downturn.

isnt that what I concluded yesterday.....''STRAIGHT TO HELL FOR THE WEST INDIES IF WE DO NOT GET UP AND STRIKE OUT ON WE OWN ::confused::"

what is a 2 billion rescue ::confused::

that is a great piece of bullshhite.  jamaica struggling under massive debt and cant meet its payments..i.e run its government and service the national debt.  its like the american debt ceiling dance every few months with obama and the repugs.

so what is the rescue:  some form of bundling payments, rescheduling of debt to give some 'room' while giving jamaica 2 billion more in DEBT! to pay its bills

hahahaha ::LOL:: ::LOL:: ::LOL:: ::LOL:: ::LOL::

all that does is ultimately make the situation far far worse.  it must be repaid at interest on top of all that is already owed. 

but by stripping Jamaica of its wealth  through central banking.. poor commodity prices for Yardy raw materials... preventing Jamaica from growing its own food by flooding its market with cheap american subsidized agricultural products..Jamaica will never, ever be able to pay.

they will be able to confiscate all Jamaica's infrastructure and valuables owned by the people and operated by the government...if that has not already been accomlished

that is what its all about chin a chinaman..slavery by another name.  that is the point of current economics..driving home imperialism by financial means, backed up by military potential they they intend to use at will

and you thought you were smart.  here is slavery again with no colonial administration.  the colonized or enslaved will manage their own enslavement at their own cost, for the metropole, which will collect at little expense to itself

well as far as I see Jamaica situation is the same situation with the whole west indies..all man in the same boat.  which is why I said the crisis is upon us and the old neo colonial elites we have are unable to deal with it.

they are a product of that way of doing the west indies business and don't have a clue as to what to do.  and even if they did they are wedded to the white western elites and will sink or swim with them...

and again which is why I said we are headed straight to hell...and this is what that looks like..total slave..the rise of all the people, throw out the current elites and set up a democracy that principle for which is the survival of the society not the making of money for the profit of a rapacious forrin elite

allyuh think I have been kidding all along eh.  just watch..........

what I mean is that federation or singly we must have such a democracy. 

the current system is set up only for the profit of forrin elite..western banker-elites.  there is no possibility of west indian prosperity in and with such a system

Guyana situation is completely different.
Forget about GDP, GNP and all the other economic indicators and concentrate on PPP or people purchasing power and you will find that it is high ,. also there are more disposable income available to  the people 
People also seems to forget that over 90% of Guyanese own their homes with no mortgages .
Currently there is a labor shortage in the agriculture sectors.

so allyuh making money the..government revenue in surplus..debt under control..dollar appreciating..national bank account healthy ::confused:: ::confused::