JAMAICA & THE IMF

From The Desk of Ken Jones - Veteran Journalist:

IMF CONDITIONALITY:

VIRTUE OR VICE?

 

Poor Jamaica! We just keep getting shafted by politics over the past 40 years.  The present PNP administration so often complains that at the end of 2011 it inherited an economy mashed up by the JLP,  which had failed to complete a deal with the IMF.   However, we should remind ourselves that the mashing up of the economy really began in the 1970s.

 

For those who care to know, when the economy was in ruins in 1980, the PNP failed the IMF test and, although not knowing where else to turn, advised the world that IMF conditionality was causing too much hardship and was not the answer to Jamaica’s problems. Of course they left office not long after the Minister of Finance, Eric Bell, who supported the IMF, threw in the sponge, saying “I now find myself unable to carry out  my responsibilities as Minister of Finance in circumstances which would require me to assert the opposite.”|

 

 

 Here is the anti-IMF release issued by D.K. Duncan, general secretary, on March 23, 1980:-

 

"By a majority of more than two to one, a special meeting of the National Executive Council (NEC) of the People's National Party yesterday recommended to the Government that no further efforts be pursued by Jamaica to establish an Interim Agreement with the IMF.

            This recommendation followed an earlier unanimous conclusion that the long-term policy for the economic development of the country could not be based on an IMF path. 

In making the recommendations, the NEC stated that they were based on the experience of the last three years and the nature of the target set by the Fund in the current negotiations for a new agreement.  While recognizing that whatever path chosen would involve hardships for the people of Jamaica, the NEC took the view that IMF conditionality would only mean more hardships and more suffering without resulting in the development of viable economy to serve the interests of the majority.

The recommendation came after a report from the Cabinet on the state of negotiations with the IMF, an analysis of intensive studies which had been undertaken by the party’s Economic Commission and careful examination of the experiences of the people over the past three years. 

It was noted that despite the great sacrifices and the Herculean effort to meet IMF requirements, the two programmes with the IMF had been suspended because of the traumatic difficulties in passing onerous performance test. 

Members concluded that this experience of Jamaica was in keeping with that of the developing countries and demonstrated once again the unsuitability of the Fund's prescription for the third world economies with foreign exchange problems.  It was strongly stated that there was urgent need for a restructuring of the international economic system and the removal of conditionality which was at variance with the goals of development for countries such as ours. 

The NEC sent the report of the Economic Commission containing proposals for an alternative path to the cabinet."

 

Today we are bearing the same IMF sacrifices that the generation of the 70s found it too difficult to bear after 3 years.  This time we are being told by the same PNP that IMF conditionality is the correct thing. We should be asking the same question that was asked by the PNP  in 1980: Will the suffering “…only mean more hardships and more suffering without resulting in the development of viable economy to serve the interests of the majority.