In 1962, Jamaica won its independence from the United Kingdom, and the island nation, which had long struggled with poverty, attempted to use its agricultural resources in order to create a sound economic base. As Jamaica's financial problems grew more severe with time, prime minister Michael Manley struck a deal in 1977 with a consortium of economic institutions through the International Monetary Fund, who would loan money to the nation in exchange for removal of trade restrictions and subsidized exports. Twenty-five years later, most Jamaicans would agree that the deal drove a stake through the island's agricultural and industrial economy; imports from America have ruined the island's dairy industry, interference from growers and merchants in the United States and Latin America have effectively ended the growing of onions, bananas, carrots, and potatoes as cash crops, the value of the Jamaican dollar has plummeted, and the island is now seven billion dollars in debt to the IMF, with interest driving that figure higher each day. Filmmaker Stephanie Black examines the sad state of Jamaica's economy in the face of "free trade" in the global economy in the documentary Life + Debt, which includes interviews with Michael Manley and IMF director Stanley Fischer; the Jamaica Kincaid novel A Small Place provides some of the text for the film's narration. ~ Mark Deming, All Movie Guide
Most of the film is narrated by http://en.wikipedia.org/wiki/Michael_Manley.
Well so far it is an attack on the IMF-as expected. But for them to say the IMF made them devalue their currency denies the reality of the situation. If their currency did not indicate a devaluation then the reserves of the country would have increased substantially but I am safe to say that that never happened in the 25 years. And like usual, the IMF does not go out of its way to loan currencies at below market prices; the countries seek out IMF support not the other way around.
According to the film the IMF was built to loan short term loans to members of the winning side at the end of WWII. But then why did nearly all nations of the world become members. Aside from North Korea, Cuba and a couple of small islands, all nations of the world are members now.
MM describes the oil embargoes of the 70s as merely oil price increases. It is not like any country besides oil exporters that really benefited from the oil embargoes. The faced stagflation and slow growth for a decade at least. So it is not like Jamaica was targeted. It is interesting that close to the end of the film that there was riots over subsidized gas prices. I wonder if this was going on in the 70s also. That would explain a lot...
Jamaica first tried the private banks, and of course in a world wide melt down very few sources of free capital was available. Then he tried going to the IMF and asked for long term loans (5 years). Since 1977 they have established different lending modes that allowed for longer term loans, but initially the IMF was set up for SHORT-TERM loans to correct Balance of Payments issues-especially with respect to the current account balance. Yes, he is correct IMF was not interested or even has expertise in long term development as of the 70s.
As of December 2005, Jamaica owed nothing to the IMF and is a current member. Jamaica: Financial Position in the Fund
as of April 30, 2007 and a link to the latest Jamaica: 2007 Article IV Consultation - Staff Report; Staff Supplement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Jamaica, which is always a good read. Note that the IMF thus did not consider them eligible for HIPC debt relief. Well that proves to me that Dr. Michael Witter (Professor of Economics University of West Indies) is wrong that the IMF set "conditions that the government could not meet". He also assumes that health and education is the only two components of the Fiscal budget. And the IMF then is saying you have to cut these programs. Of course in the last decade some of the more stringent rules have been changed, as in Silva cutting defense budget and actually increasing health and human services.
But he is right that the terms of trade get worst for a country that devalues. And maybe the IMF should have considered the Absorption approach to the Balance of Payments effects.
A girlfriend of mine and myself did visit Jamaica and yes we did visit all the touristy places and enjoyed the beach. But she was Puerto Rican and so did slip away and visited with some natives. No revolution but she did smoke some weed. The resort that they show even looks like the Sandal resort we stayed at. Why would it matter where the food came from?
They talk about globalization and that they wanted their "own markets back" but then do not recognize that their massive tourist business is a derivative of globalization. I guess they would rather be like Haiti and not try to use their comparative advantages. Nothing says anything about have no restrictions on imports only they can't be arbitrary about the rules.
Those bad consumers decided that powdered milk was better than fresh milk? Something seems wrong with that picture. In the USA they can't give away powdered milk. It was claimed that the subsidy on powdered milk was 137% from the USA. They should have complained the WTO. ***
The Lome agreement (ACP countries) they state gives Jamaica a tariff free guaranteed market. Boy globalization sounds good to me.
Jagdish Bhagwati has shown that industrial free zones grow faster and develop faster than other parts of the countries that he has looked at.
Spring Valley Chicken Plant Jamaica, lost the market share since the US market has a high demand for chicken breast but this leaves a surplus of dark meat on the market which is sold on the Jamaican market.
Jamaica was discovered by Christopher Columbus in 1493. Not too long after, it was settled by human rubbish from Europe. We used enslaved but noble and exalted human beings from Africa to satisfy their desire for wealth and power. Eventually the masters left, in a kind of way. Eventually the slaves were freed, in a kind of way. Once you ceased to be a master you're no longer human rubbish, you're just a human being and all that adds up to. And so too with the slaves, once they are no longer slaves, once they're free they are no longer noble and exalted, they are just human beings.
Good creation of binary oppositions.
It has in the bonus section a slide show on anti-globalization movements.
While the mainstream media readily focus on the confrontations, they rarely examine the critical issues that join such a rich cross-section of voices together in global protest. these images reflect a worldwide affirmation by millions of the need to make equality in economic opportunity an international priority.
But do these images conveyed any thought beyond "Bush is evil" and globalization is bad? No deep thoughts here is anyone was looking. It is amazing that I am sure 90% do not understand what they are protesting against.
From the interview with MM in the extras, said that he tried to use a couple of approaches to their massive oil debts by first going to OPEC and asking for the development funds for the third world countries. He said only Algeria and Venezuela were interested. Well yes if not for Venezuela breaking the back of the oligopoly the world oil prices could have stayed higher for a lot longer time.
He said they also asked the Soviet Union for some money. They were in the Non-Aligned Movement (NAM). I think Cuba was already their lady in waiting. No need for two mistresses.
But I have to admit that he does explain the reasons for IMF intentions and actions fairly well but it never set them back 50 years as he claims. Does he honestly think that his path was going to lead to be a 1st world nation by now?
Michael Manley and some lessons from the IMF CLAUDE ROBINSON Sunday, July 05, 2009