Archive for the ‘economy’ Tag
As seems the case all over the world, young people who have nothing to do and have very few or no opportunities to get jobs or realise their potential is not only terrible to witness right now but is also storing up problems for the future. A report in the Jamaica Observer made this all to clear. It’s about a 16 year old boy called Tajay Reid who was well known in his community as both bright and intelligent. His mum could not afford to keep him in school after 16 and he inevitably had nothing to do. It’s a familiar tale, he ended up involved in robbing a house and was brutally killed in the process. The headline for the piece is hugely apt. It is a tragedy. But why does it continue to happen?
With the economy in such dire circumstances, heavily indebted and with everything cripplingly expensive due to the high cost of imports, it might be time for Jamaica to consider some radical policy options. The only really lucrative farming going on at the moment seems to be growing ganja. If growing food and transporting it to markets were made profitable, this would not only provide employment but also reduce reliance on food imports. But it requires a change in demand and ethos and real committment in agriculture by a weak government. Here are some other ideas. You’re welcome to add your own.
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.
Prime Minister Golding is putting his loving hand out to the International Monetary Fund for a loan to help Jamaica’s struggling economy.
It’s with a clear sense of desperation that he’s doing this; he’s reported as saying the factors that are leading down this path are : the markets are not lending any money, downturn in bauxite and tourism, reduction in remittances.
The last time Jamaica got help from the IMF was not a great thing. The list of conditions and strings attached, crippled the local economy through cuts in public spending which hurt the poor. Throughout the 1970′s and 80′s, the loans mounted up and growth stayed low.
Will this time be any different really? It’s supposed to be thinking differently - the IMF I mean, and they have outlined a whole new set of rules based around its’ loans. But the Director of the IMF, Strauss Kahn says that they are “helping” Jamaica with its’ new tax initiatives. Should Jamaica trust the IMF?
It seems more and more Jamaicans are taking up robbery as a professional career. In times of economic downturn, crime pays.
There’s been a staggering increase in the number of reported robberies, a 79 per cent increase on around this time last year. In actual numbers, there were 277 robberies and 294 break-ins in one month alone.
It’s pretty shocking, but easy money. I remember talking to some guys who were eagerly awaiting hurricane season one year for looting opportunities. It’s like other countries wait for the strawberry picking season for their employment.
I suppose it makes perfect sense if this is the only way you can see to make money. But the knock on effects of a worsening crime situation on the island are obvious enough. Robbery is the nail in the coffin for local businesses struggling to keep afloat.
House break-ins only increase the number of gated developments with their barking dogs outside as people lock themselves away at night – this kind of thing can destroy communities.
I was going to give this post the title, Jamaica’s empty purse in time for Jamaica’s budget. But then I realised that a 55 billion Jamaican dollar budget shortfall – that’s about 614 million US dollars (as far as I can work out) – well that’s a pretty big hole in the purse. It emptied a long time ago.
The Jamaican finance minister, Audley Shaw plans on spending more – hundreds of billions of JA dollars in fact. Where’s he going to get the money? Well, he’s going to ask for another loan of course. The IMF are helping out a lot of countries right now, and they’re not being as stupidly strict in the conditions they attach.
Security is on high alert to contain social unrest over his plan to raise taxes.
Passport fees have doubled, tax on gas is set to increase, Prime Minister Golding has been saying he wants to reduce the debt – good luck with that Mr Golding, in this economic climate, you’ll be lucky to keep the debt at the level it is now.
Raising taxes is not popular at the best of times, to do it when people are suffering from a downturn in tourism and other staple industries, when people are losing their jobs and going hungry, add that to a country awash with guns where people are already murdering each other. That’s a deadly cocktail.
The hijacking of a plane at Sangster international airport is what Jamaican tourism needed like a hole in the head.
It seems the gunman – Stephen Fray who’s in his 20′s, was mentally ill – well it’s hardly something a sane person would do is it??
He boarded the Canjet plane which took off from Halifax, Canada, destined for Montego Bay and then Cuba, by forcing his way through security barriers at Sangster during the stopover. There were 182 passengers on board who were all let off in Jamaica but he kept hold of the six crew members from 11pm to 7am.
This is the worst thing that could have happened to Jamaica as it faces major economic trouble. International headlines like this could not have come at a worse time. On the bright side, at least everyone got out of it unharmed, that’s a major blessing.
Jamaica has had some welcome relief from its huge, crippling debt. It comes from the island’s old colonial masters, the UK. £5 mill that’s $645 million Jamaican dollars has been written off.
It’s reported that the British government say this should help Jamaica concentrate on spending more on its’ public services.
It would indeed be a wonderful thing if Jamaica did improve its’ health services – anyone who has been inside Kingston Public Hospital would I think whole heartedly agree with that.
But with the calls from trade unions and wage demands coming from all sides, whether the savings can be made and re-directed into areas that can benefit the people of Jamaica and improve the economy in some way, I’m afraid I am feeling sceptical about whether this can be achieved. Here’s a useful background article.
And this looks like a useful film to go see.
The last budget is reported to show fifty per cent of every single dollar earned in Jamaica is going towards debt repayment. It’s debt to GDP ratio is ranked the world’s 4th highest at 132 per cent.
It seems like Jamaica owes people from everywhere – including the football association.
The fact that Jamaica is relying on countries and other bodies to suspend debt repayments signals to me that finances have never been properly looked after, can they ever break this habit of a lifetime ?
Probably very low down on the list of priorities (if indeed it is on the list at all) when it comes to the discussions between the 20 richest nations leaders, going on in London, is poor Jamaica.
It hasn’t stopped Jamaica’s Finance Minister Audley Shaw from trying.
He has been saying that Jamaica needs more money “urgently” for investment in infrastructure and to replace all the jobs that have been lost recently in the bauxite industry and elsewhere.
He said it was essential “to put in place economic stimulus packages for small, heavily indebted, and highly vulnerable economies like Jamaica “
I’ve been trying to blog about the vulnerability of JA’s economy here for some time, and this is the first time I’ve heard that a senior govt voice has spelled it out clearly like this.
Asking for loans on top of the debt already crippling Jamaica is probably the only thing that can be done right now. So good luck to Mr Audley Shaw, but according to this article, he doesn’t instil much sense of hope.
I have to say I was quite surprised to read this in the Gleaner newspaper which is actually an on-point opinion piece.
It’s about the fact there were hardly any politicians – including leaders on both sides of the political divide – who bothered to turn up to Parliament – despite there being a huge raft of debates to go through and taking into account Jamaica’s pressing problems – both economic and social.
If Parliament is not taking Jamaica’s precarious situation seriously then what hope is there really?