Contextualizing Jamaica’s Relationship with the IMF [1st ed.] 9783030446628, 9783030446635

This ambitious book provides a comprehensive quantitative and qualitative assessment of Jamaica’s ties to the Internatio

265 47 3MB

English Pages XXII, 318 [332] Year 2020

Report DMCA / Copyright

DOWNLOAD PDF FILE

Table of contents :
Front Matter ....Pages i-xxii
Introduction (Christine Clarke, Carol Nelson)....Pages 1-13
Jamaica ‘Comin’ in from de Cold’ (Christine Clarke, Carol Nelson)....Pages 15-35
The Moyne Commission (Christine Clarke, Carol Nelson)....Pages 37-64
Jamaica: Independence Realized (Christine Clarke, Carol Nelson)....Pages 65-90
Introducing the International Monetary Fund (Christine Clarke, Carol Nelson)....Pages 91-121
A Clash of Ideologies: Jamaica and the International Monetary Fund (Christine Clarke, Carol Nelson)....Pages 123-166
The 1980s and 1990s: Inflection Points? (Christine Clarke, Carol Nelson)....Pages 167-193
Economic Policy Independence: Jamaica’s Initial Experience (Christine Clarke, Carol Nelson)....Pages 195-216
The Local Approach ‘Under the Microscope’: International Monetary Fund Article IV Reviews (Christine Clarke, Carol Nelson)....Pages 217-242
Born of Crisis: The Public Sector Memorandum of Understanding (Christine Clarke, Carol Nelson)....Pages 243-261
The Perfect Storms (Christine Clarke, Carol Nelson)....Pages 263-289
Back Matter ....Pages 291-318
Recommend Papers

Contextualizing Jamaica’s Relationship with the IMF [1st ed.]
 9783030446628, 9783030446635

  • 0 0 0
  • Like this paper and download? You can publish your own PDF file online for free in a few minutes! Sign Up
File loading please wait...
Citation preview

Christine Clarke · Carol Nelson

Contextualizing Jamaica’s Relationship with the IMF

Contextualizing Jamaica’s Relationship with the IMF

Christine Clarke • Carol Nelson

Contextualizing Jamaica’s Relationship with the IMF

Christine Clarke Department of Economics University of the West Indies Mona, Jamaica

Carol Nelson Department of Government University of the West Indies Mona, Jamaica

ISBN 978-3-030-44662-8    ISBN 978-3-030-44663-5 (eBook) https://doi.org/10.1007/978-3-030-44663-5 © The Editor(s) (if applicable) and The Author(s) 2020 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Christine wishes to dedicate this book to her parents and grandparents, from whose shoulders she was able to reach the sky. Anaelle, reach even further! This book is dedicated to my family for their support during the writing and also to colleagues of the past and present, within the public service and academia, whose experiences are reflected in what we write.—Carol Nelson.

Preface

Contextualizing Jamaica’s Relationship with the International Monetary Fund reflects the undertaking of a comprehensive quantitative and qualitative review contextualizing Jamaica’s relationship with the International Monetary Fund (IMF). The book seeks to be innovative in synthesizing the methodologies and conceptual frameworks of Actor Network Theory (ANT) and Critical Discourse Analysis (CDA) as the lens through which Jamaica’s emergence as a state and relationship with the International Monetary Fund (IMF) are explored. This represents a departure from methodologies that typically explore such topics and subject matters. The formal arrangements brokered, the societal interface, as well as implications for development are revisited, analysing social relations and relationships within Jamaica’s historical, global and political-economy context as well as exploring the social, economic and developmental implications. The methodologies of ANT and CDA facilitate the departure from conventional lens of analysis, as ANT’s ontology affords the conceptualization of the animate and inanimate as actors possessing their own agency, networks, connectivity and, through the ‘sociology of translation’, insight into the nature of social relations. When combined with CDA, the nature of the connectivity within the actor networks can be probed, namely the text, discourse and discourse practice within modalities of social relations where power is exercised and contested. The book not only highlights themes that have characterized and contextualized Jamaica’s relationship with the IMF, but also captures the

vii

viii 

PREFACE

exploration of actor networks, social relations and development implications. Domestic and international discourses surrounding the evolution of the actors, characteristics and networks of relations ‘back then’ as compared to currently are also explored. Historically, there is the creation of a multiplicity of actor networks and shaping of the discourse and practice of Jamaica as an emerging state, with implications for the domestic economy, policy and decision-making as well as the modalities of government, governance and coherence of social relations, reflecting on the colonial era moving forward. Expressions of power within social relations between actors, namely the ‘colonized’ and the ‘colonizer’, are revelatory, as the colonizer is, in turn, an actor positioned within geopolitical actor networks, who also becomes a captive to emerging vulnerabilities of his own. Changing geopolitics of the empire and political economy networked relations of the colonizer unearthed deficiencies and weaknesses, engendering various crises of governance. One of such was portrayed in the Caribbean by unrest and rebellion, which when accompanied by the revelations of the Moyne Commission altogether furthered the gradual relinquishing of the colonizer’s networks of domination during the pre- Independence era. Independence led to efforts to demonstrate the new status, by domestic and economic forays into limited policy and independent decision-­ making as expressions of being now empowered. However, the effectiveness of such was curtailed by a fragile macroeconomy and fractured, diverse social relations, reflecting colonial cleavages, along racial, political, class, economic and ethnic lines, with multiple and contending self-interests. But these social relations signalled unification around a hope, or even the expectation, that self-government would bring benefits previously denied under colonialism. There is an interrogation of some key themes and issues of the IMF as an actor network—its characteristics, emergence, discourse and practice as explored through various key themes. Created and positioned as a macro social actor with an ideological base and discourse practice, the IMF actor network is operationalized and exercised through networked relationships within the global community. Several critiques arise concerning the nature of the interface and influence, contributing to reflections upon the outworking of the discourse and practice of the IMF itself and its interactions within the global network of relations and space of flows.

 PREFACE 

ix

Jamaica’s engagement with the Fund during the 1970s and the characteristics of the agreements were derived within the context of divisive and contending global, geopolitical and ideological juxtapositioning in the global economy. Integrated within the global political economy as a small fish in a big pond, Jamaica’s ideological alignment, interface, positioning and global networked relationships influenced the policy framework pursued as well as the nature of its engagement with the IMF. Concomitantly, the IMF was also being influenced by and reflected global geopolitical and ideological interests during the period, which led to degrees of divergence implicating its networked relations with Jamaica, concomitant with the nature of its interface with developing nations. The recognition of the influence of ideological actor networks, external actors, and interests and modalities of their interface with and within the Jamaica actor network was revealed within diverse societal expressions and commentaries, implicating the Jamaica-IMF relationships and the characteristics of external relations. Key dimensions of such are explored through the lens of societal actors’ responses, discourse and practice as they sought to interpret the variability within the government-IMF relationship, as well as the nature of Jamaica’s connectivity to geopolitical networks of power. Jamaica’s relationship with the IMF has been most tumultuous considering its beginnings compared to other international financial institutions (IFIs). Aspects of the IMF relationship in the 1980s–1990s were reflected in riots and civil unrest. No multilateral development partner or international financial institution has received such a national response in the implementation of its policies or programmes in Jamaica’s history. In the 1980s, the IMF-Jamaica interface foregrounded change, reflected in the economic and socio-political discourses concerning the economy. The newly elected JLP regime of Edward Seaga, committed to the Washington Consensus with the intent to effect substantive development within Jamaica. The new approach was short-lived, attributed to the ‘triumvirate’ of the variability and instability of the networks of global markets (to which Jamaica was connected), global recession and debt crises impacting the loss of earnings, and the impact of Hurricane Gilbert, despite an expedited recovery. The concomitant results heralded the return to low growth, high unemployment and foreign exchange challenges.

x 

PREFACE

Michael Manley’s return as Prime Minister heralded a full-fledged dive into liberalization in the 1990s, a deepening deregulation of the economy and economic policy independence. However, his efforts fell captive to the costs of his policy reversals incurred in the 1970s in the pursuit of social justice and equity that had resulted in an enormous debt overhang, overshadowing the economy with devastating economic impact. Policy independence was, indeed, achieved, but this was juxtaposed against economic records that detailed the severe difficulties experienced as the nation struggled with the management of economic policy and structural reforms, with the hope that these efforts would result in development and the production of more competitive goods and services. The absence of a formal Jamaica-IMF lending arrangement precipitated home-grown initiatives as well as the interplay of perspectives under a Staff-Monitored Programme, whereby both sides interfacing in various discussions would come to mutual understandings to inform Jamaica’s trajectory, as countervailing issues had to be navigated in the macroeconomic context of a very high public-debt-to-GDP ratio. There was struggle in terms of the inculcation of change in the domestic context, influencing social relations, with reflexivity in the discourse and practice of actor networks as policy independence became elusive and solutions were needed. One of the home-grown initiatives that emerged to treat with economic crisis trending in the absence of a formal lending relationship with the IMF, after Jamaica’s financial crisis of 1999 and its effects, was the negotiation of a public sector memorandum of understanding (MOU), a social partnership agreement between the government and the Jamaica Confederation of Trade Unions (JCTU). This social partnership agreement included the maintenance of the current size and cost of wage expenditure to the budget for public sector workers coupled with a wage freeze. There would be no job losses nor redundancies. The size of the public sector was growing along with the associated increased costs for the wage bill, so the capping of expenditures in this regard was critical given the macroeconomic state of the economy. On the part of the government the MOU provided time and enabled a degree of fiscal space to address underlying macroeconomic challenges. Through the lens of ANT and CDA, the former’s ontology afforded the conceptualization of the MOU as an actor network, vested with a discourse of its own. The connectivity within the actor network created, reflecting MOU discourse and practice as informed by the text of the

 PREFACE 

xi

MOU agreement, when analysed using CDA was revelatory, bringing to the fore salient themes—notably, confirming the value of social partnership as a mechanism of governance especially in a time of crisis, facilitating unusual forms of collaboration between strange bedfellows, in Jamaica’s case, such as labour and government. Analyses also distilled that the stability of commitments is undergirded by the mutual coincidence of need and by engendering the support required to minimize the risk of loss, especially in a time of national challenge. After eighteen years, a new leadership and a new regime were elected and emerged as combatants against the worsening economic conditions, further aggravated by global food and fuel price crises in the aftermath of the 2008 global financial crisis. It was unequivocal that an IMF intervention was needed in the form of a balance of payments support for the economy. Returning to the Fund precipitated calm on the domestic economy against the framework of a reformed IMF, juxtaposed with the creation by domestic policymakers of a long-term, inspirational strategic framework and ‘vision’, guiding economic development to actualize Jamaica as the place of choice to live, work, raise families and do business. This book, the first of two, seeks to locate the analyses and findings within a comprehensive, historically contextualized Jamaica-IMF relationship, inclusive of analyses of socio-economic performance with and without the IMF as a stakeholder as well as the social and developmental implications for the country’s development trajectory. This book contextualizes the Jamaica-IMF relationship with respect to the interests, actors and diverse stakeholders and political economy themes within the domestic sphere of Jamaica’s historical growth and development. It portrays an exploration and investigation into Jamaica’s history and nature of the decision-making, which facilitates reflection, even in part, upon the domestic and international discourses surrounding the contextual evolution of the IMF-Jamaica relationship, interlinked with the political economy of Jamaica’s growth and development, which played a role in conditioning the engagement at that time. Jamaica’s relationship with the IMF has gone through several stages over several years and has evolved, and this book seeks to evaluate how this relationship has shaped the social and developmental trajectory in Jamaica. The International Monetary Fund as an actor, whilst not innocent of misdiagnosis and implementation, policy mistakes and blunders, was not the demon it was painted during the 1970s and 1980s. Furthermore, the Fund has, to some degree, redeemed itself to the various actors in Jamaica

xii 

PREFACE

and around the world, engendering economic, social and benefits, where programmes are now ‘owned’ and not implemented unilaterally by the state as an actor but where a wide range of actors are involved in holding the state to task and a degree of accountability with respect to its commitments and its responsibilities. However, Jamaica’s engagement with the IMF has left, and one could argue, continues to leave (as will be discussed in the second book) a resonance or an indelible mark on Jamaica’s economic development trajectory and societal landscape. In retrospect, this book debunks the view that it was colonialism in and of itself that generated the challenges of development faced by the various actors in Jamaica. The reflections and analyses will reveal that at every juncture of the antecedents and contextual experiences of the Jamaican population, there were actors and networks that had to be navigated, within and without. The political ambitions, rivalries and power struggles within social relations and the nuanced type of expectations of the population needed to be informed and confronted ‘face to face’, with an understanding of basic economic realities, the nature of the decision-making and actor network relationships that could drive the country to the brink of various crises. Throughout the period of reflection of this book, the problematics emerging also represent diverse challenges that characterize the experience of small island developing states, which are also brought to the fore. These reflect the struggle within post-colonial states as actors striving to empower themselves, by engaging in endogenous decision-making, building networks across and between the global and the local, and engaging diverse actors within the space of flows, in a concerted effort to engender economic growth and development. The interface of engagement of the local with the international, in terms of domestic policymakers participating in diverse negotiations with international organizations, like the IMF, has also foregrounded the need for domestic social relations to be inclusive in negotiating such accords. Commitments enabled and derived need to be buttressed locally by concerted actions towards the achievement of nationally agreed objectives, beyond the variability of change in domestic political regimes elected into office, with accountability being consistent throughout in terms of outcomes achieved. Mona, Jamaica 

Christine Clarke Carol Nelson

Acknowledgements

This book is a work of love, long deliberations and a commitment to the development of a reflective practice that will help all stakeholders make more informed decisions in the search for development and economic independence. Our families have been gracious in allowing us time and space to complete this work at a time when global occurrences are threatening to plunge the world and our small, open economy into crisis— yet again. Our colleague—Colin Bullock—unknowingly started us both on the journey to dreaming up and completing this manuscript in two separate spaces and in two different roles. Colin and Christine worked together as colleagues in the Department of Economics at the University of West Indies, Mona, in 2012 to reflect on Jamaica’s fiscal policy since Independence, a work that remains incomplete in that format due to the former’s departure. Colin and Carol were colleagues at the Ministry of Finance when Colin was Financial Secretary. Many research assistants supported the heavy lifting that made this manuscript possible, including Darren King, Kemar Whyte, Chanit’a Holmes, Demar Royes, Ornella Kelly, Anthony Clarke, Gabriel Smith and Sade Wilson. We thank our colleagues at the University of West Indies (UWI), Mona, who encouraged us on this marathon. We look forward to critical discourse on these matters and pointers for the next.

xiii

Contents

1 Introduction  1 2 Jamaica ‘Comin’ in from de Cold’ 15 3 The Moyne Commission 37 4 Jamaica: Independence Realized 65 5 Introducing the International Monetary Fund 91 6 A Clash of Ideologies: Jamaica and the International Monetary Fund123 7 The 1980s and 1990s: Inflection Points?167 8 Economic Policy Independence: Jamaica’s Initial Experience195 9 The Local Approach ‘Under the Microscope’: International Monetary Fund Article IV Reviews217

xv

xvi 

Contents

10 Born of Crisis: The Public Sector Memorandum of Understanding243 11 The Perfect Storms263 Index291

Abbreviations

AGRO 21 ALCAN ALCOA Bauxite MOU BFE BITU BOJ CARICOM CAST CBI CD CFE CPI CTMS DfID DLP EFF ESAF EU FINSAC FSSF GATT GDDS GDP GOJ HEART HIPC

Agricultural Programme 1983 on the 21st anniversary of Independence Aluminium Company of Canada Aluminum Company of America Bauxite Memorandum of Understanding Blaise Financial Entities Bustamante Industrial Trade Union Bank of Jamaica Caribbean Community College of Art Science & Technology Caribbean Basin Initiative Certificate of deposit Century Financial Entities Consumer Price Index Central Treasury Management System Department for International Development Democratic Labour Party Extended Fund Facility Enhanced Structural Adjustment Facility European Union Financial Sector Adjustment Company Limited Financial Sector Security Fund General Agreement on Tariffs and Trade General Data Dissemination System Gross Domestic Product Government of Jamaica Human Employment and Resource Training Heavily Indebted Poor Countries Initiative xvii

xviii 

Abbreviations

ICU IDB IFS IMF JAMPRO JCSA JDX JHTA JLP JRC JTA JUPOPE KPH MLGCD MNCs MoEYC MOH NAJ NGO NIR NIS NTA NWU OPP PNP SAF SAL SBA SDR SEPROD UAWU UDC US USAAW USAID USD UTASP WB WIF WIFLP WISA

International Clearing Union Inter-American Development Bank International Financial Statistics International Monetary Fund Jamaica Promotions Corporation Jamaica Civil Service Association Jamaica Debt Exchange Jamaica Hotel & Tourist Association Jamaica Labour Party Jamaica Railway Corporation Jamaica Teachers’ Association (JTA) Jamaica Union Public Officials Public Employees Kingston Public Hospital Ministry of Local Government and Community Development Multinational Corporations Ministry of Education Youth & Culture Ministry of Health Nurses Association of Jamaica Non-governmental Organizations Net International Reserves National Insurance Scheme National Training Agency National Workers Union Obligatory Passage Point People’s National Party Structural Adjustment Facility Structural Adjustment Loan Stand-by Arrangement Special Drawing Right Soap & Edible Products University and Allied Workers’ Union Urban Development Corporation United States Union of Schools Agriculture and Allied Workers (USAAW) United States Agency for International Development United States Dollar Union of Technical, Administrative and Supervisory Personnel World Bank The West Indies Federation The West Indies Federal Labour Party The West Indies Sugar Association

List of Figures

Fig. 6.1

Fig. 6.2

Fig. 6.3

Fig. 6.4

Fig. 6.5

Fig. 6.6

The Emergency Production Plan 1977: Major Pillars. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)143 The Emergency Production Plan 1977: Agriculture. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)144 The Emergency Production Plan 1977: Manufacturing & Crafts. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 145 The Emergency Production Plan 1977: Construction. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 146 The Emergency Production Plan 1977: Construction I. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 147 The Emergency Production Plan 1977: Tourism. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)148

xix

xx 

List of Figures

Fig. 6.7

Fig. 6.8

Fig. 6.9

Fig. 6.10

Fig. 6.11

Fig. 6.12

Fig. 6.13

Fig. 10.1

The Emergency Production Plan 1977: Tourism I. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)149 The Emergency Production Plan 1977: Bauxite & Alumina. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 150 The Emergency Production Plan 1977: Bauxite & Alumina. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 151 The Emergency Production Plan 1977: Fuels and Energy. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 152 The Emergency Production Plan 1977: Fuels & Energy I. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 153 The Emergency Production Plan 1977: Manpower & Employment. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 154 The Emergency Production Plan 1977: Foreign Economic Relations. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica) 155 Reported Industrial Disputes in Jamaica, 1990–2000. (Source: Based on Taylor, O.W., 2001. The Employment Relationship (Scope) National Study 2001 (Jamaica https://www.ilo.org/ wcmsp5/groups/public/%2D%2D-ed_dialogue/%2D%2Ddialogue/documents/genericdocument/wcms_205368.pdf)254

List of Tables

Table 2.1 Table 3.1 Table 3.2 Table 3.3 Table 3.4 Table 3.5 Table 6.1 Table 7.1 Table 8.1 Table 8.2 Table 8.3 Table 8.4 Table 8.5 Table 9.1 Table 9.2

Conflict with colonials: the British Empire (1900–1918) 31 Update on implementation of Moyne Commission recommendations 1–6 41 Update on implementation of recommendations regarding education by the Moyne Commission 43 Update on implementation of recommendations regarding health by the Moyne Commission 48 Update on implementation of recommendations regarding housing by the Moyne Commission 50 Update on implementation of recommendations regarding labour and trade unions by the Moyne Commission 54 Jamaica: History of lending arrangements with the International Monetary Fund 1960–1980 (in thousands of SDRs)124 Jamaica: history of lending arrangements with the International Monetary Fund 1981–1990 (in thousands of SDRs)190 Jamaica: History of lending arrangements with the International Monetary Fund (in thousands of SDRs) 1990–2000196 Changes in liabilities and loans and advances of commercial banks in Jamaica: 1990–1998 202 Chronology of events in Jamaica’s financial sector crisis 204 Summary of planned FINSAC interventions in 1999 205 Three-phase mandate of FINSAC 206 Summary of objectives outlined in FY2001 Article IV 219 Summary of objectives achieved in FY2001 220 xxi

xxii 

List of Tables

Table 9.3 Table 9.4 Table 9.5 Table 9.6 Table 9.7 Table 11.1 Table 11.2 Table 11.3 Table 11.4 Table 11.5

Summary of objectives outlined in FY2002 Article IV Summary of objectives achieved in FY2002 Article IV Summary of objectives outlined in FY2003 Article IV Summary of objectives achieved in FY2003 Article IV Summary of objectives outlined in 2004 and 2005 Article IV 2006 Manifesto promises by sectoral area prior to the 2007 elections Contributing factors and the associated impacts of the 2007 and 2008 global food crisis Economic context and developments in Jamaica—2008 and 2010 Agreed prior actions and benchmark conditionalities required before enactment of the 2010 twenty-seven-month stand-by with the IMF Programme timelines—agreement and review dates—for the 2010 Stand-by Agreement (SBA)

223 225 229 230 235 265 267 275 277 279

CHAPTER 1

Introduction

Introduction This first book seeks to foreground and illuminate the political economy realities that contextualized the emergence of Jamaica as a state, which shaped the country and influenced decision-making. These dimensions have developmental implications in the context of Jamaica’s relationship to the International Monetary Fund (IMF). The various chapters explore the diversity of outcomes and implications resonating from the relationship between Jamaica and the IMF from the perspective of the numerous Agreements brokered and relational nature of the engagement over the years. The theoretical framework being used is Actor Network Theory (ANT), with a view to unearth new dimensions and perspectives emerging through the lens of actor networks which supports relational analyses, facilitating and bringing to the fore various interests, actors and diverse stakeholders and political economy themes which have implications for development outcomes. The tendency in research of this nature, given the subject matter, is to focus on quantitative numerical data, benchmarks and targets through the analytical lens of the economic and fiscal. However, this book seeks to reflect the contexts of discourse, discourse practice and the changing social relations embedded in the historical, socio-political relationships which underpinned Jamaica’s development trajectory as it actualized its independence, juxtaposed with the progressive interface with the International Monetary Fund. The IMF as an actor, in turn, is explored inclusive of its © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_1

1

2 

C. CLARKE AND C. NELSON

discourse and the framework of varying engagements and interventions contoured by power relations, the national interest of power brokers, geopolitics of finance and multilevel governance practices which transcends the global and the local space of flows, yielding residual, multidimensional effects.

Theoretical Lens Developed by Michel Callon (1986), Bruno Latour (1986) and John Law (1992), Actor Network Theory (ANT), or the Sociology of Translation sociology of translation, views the world through the lens of actor networks explaining their heterogeneity and creation. As a founding concept, ‘actors’ or ‘actants’ (Law and Hassard 1999) relate to heterogeneous animate and inanimate elements that influence others in a network, whether human, text or artefact (Garson 1999), bending space around themselves, making others dependent upon or linked to them. ANT has a unique ontology in that it recognizes equity between both the human and non-human actors (Ritzer 2007), termed ‘symmetry’, which affords a precariousness (Williams-Jones and Graham 2003) to the network as well as providing a distinctive approach to social theory and research (Law 2007). Actor and network are mutually constitutive (Stalder 1997, 2), whereby an actor cannot act without a network and a network consists of actors where there is mutual shaping and interdependence. An actor can also be a network in its own right, composed of intermediaries which have been accepted by the actor, then transformed to carry the actor’s signature of authorship (Law 1991) towards being stabilized or ‘black boxed’. Actors form networks by circulating intermediaries among themselves, thus defining the respective position of the actors within the networks and in doing so, constituting the actors and the networks themselves. Intermediaries pass between actors in the processes of network formation in the course of ‘relatively stable transactions’ (Bijker and Law 1992) and are construed as a language, a text, a product or a service that assists in communication and stabilization of the network. ANT as the ‘sociology of translation’ facilitates tracing the characteristics of network construction, the linkages and interactions between actors and explains the dynamics of actor networks as they undergo convergence, divergence, stabilization or disintegration. As a shifting open alliance system (Williams-Jones and Graham 2003), the network, consists of social groups, people, artefacts,

1 INTRODUCTION 

3

devices and objects, where each as an actor, plays a role to influence one another (Cordella and Shaikh 2006; Law 2007) in the alignment and networking of interests. ‘Translation’, in ANT, coined by Callon (1986), encapsulates the shifting, making equivalent, linking and de-linking of actors in network relations, being the glue that holds independent actors capable of resistance or accommodation, or participation (Williams-Jones and Graham 2003). The mechanics of network formation consists of four moments, problematization, interessement, enrolment and mobilization. Problematization, entails the identification of a problem or set of issues around which a ‘focal’ actor solicits the involvement of several actors to solve. This involves the merging of interests of many to address it with the recognition of the possible mutual benefits to be derived in forming an alliance around it (De Jong 2007). In interessement the focal actor becomes indispensable and central to the dialogue, determining the issues that become the ‘Obligatory Passage Point’ (OPP) reflecting and representing interests that must be satisfied or treated with by all the actors. As both the actors and the networks in turn, cannot act or obtain what they need independently, the ‘OPP’ ensures uniform communication through a single domain (Garson 1999) providing the focus and direction for  all, including other actors. This locks them (Stalder 1997) into position in the network where actors must either choose to change direction or remain with the focal actors to achieve their objectives. Enrolment is the moment or phase whereby interrelated roles are defined and attributes chosen and accepted by the actors through the process of negotiation. Callon (1986, 10) describes enrolment as a process involving ‘trials of strength and tricks’ while De Jong (2007, 7) adds ‘persuasion, seduction, consent without discussion, intrigues, propaganda, violence, transactions, interpretation and even physical violence’. The network as an open construct facilitates agreement around the objectives of other actor networks, which, in turn, allows the inclusion of these characteristics. Subsequently new dimensions are added to the character of the network itself, creating a circularity born of successive introductions and recursive interplay ebbing to and fro (Cordella and Shaikh 2006). The openness of the network facilitates actors having their individual objectives agreed to by other actors, which on being co-opted, defines the network. Actors also bring in characteristics from the actor networks of which they are already a part (Cordella and Shaikh 2006),

4 

C. CLARKE AND C. NELSON

resulting in new emergent characteristics being introduced and recursively being re proposed back into the other actor network being created, causing ‘circularity’ (Cordella and Shaikh 2006). Translation therefore includes circularity being the interpretation of that which each actor brings and removes in the process, from the perspective of  how each actor interpretes  other actors in the network (Callon 1990). The more relations an actor has through translation, the bigger the actor grows towards being a ‘macro social’ actor and relations become fixed or ‘black boxed’ (Callon and Latour 1981; De Jong 2007). The coalescing and black boxed status of macro social actor derived from the multiple elements and associations of which it is composed, become inscribed resulting in the network becoming ‘stable’ and ‘like-minded’ (Callon & Latour 1981, 285). The delimitation of the actors, their interaction possibilities, identities and negotiated margins of maneuver in the network, demonstrated by its stability, reflects mobilization. Considered a process of social ordering (Lowe 2001) translation involves struggle where each actor’s interests strive for ascendency or a place, consequently the dynamics, and relational stability of the actor network created will be a function of effective enrolment. Network dynamics of divergence can occur where a new actor network is being incorporated resulting in the location in the network from which it is coming from, also being captured and aligned. These additional network elements are now brought in, which also requires a degree of effort to sustain the growing relationships forged. Convergence is the reverse of this, as an outcome of the reversal of the enrolment process and a rejection of the inscription of the macro social actor, leading to a decoupling from the network of the macro social actor as interests are no longer shared nor served. Power in ANT is derived socially and the network in its entirety is implicated as power becomes a productive and relational output of the actor  network itself (Saeed and Gopal 2005) creating network relations that are viable both politically and relationally. Not being monopolistic and focused upon the individual or independent decisions, power then resides in the degrees of interdependencies and networked relations. The absence of a monopoly by any actor allows the actor network to be always contestable with its durability being dependent upon the commitment of the objects to the network, that move from place to place without changing, coining the term, ‘immutable mobiles’ (Law 2007, 6). These hold their shape physically, geographically, functionally and relationally (Law & Singleton 2005, 6) but are not  inflexibile such that another network could not emerge. Networks that are translated result in a degree of simplification, while retaining difference or heterogeneity to the point of becoming ‘black boxed’.

1 INTRODUCTION 

5

The theoretical framework of ANT assists to construct how Jamaica’s engagement with the various IMF Agreement emerge as well as the interplay and interactions of the networks created, their dynamics and how various actors coalesced, converged and diverged in relational interplay. The IMF Agreements each became actors or actor networks soliciting the enrolment of other actors to the point of representing them in their own right, enlarging in scope, thus  demonstrating the ability to enrol and solicit actors to the point of representing them (Murdoch 1995), indicating power derived relationally (Callon 1986).

Text A distinction is normally made between text and discourse whereby  text  involves  both the written text and transcripts of spoken interaction (Fairclough 1993). Fairclough, (2012) extends ‘texts’ to capture ‘...the written documents and websites of governments...’ as well as ‘…interviews and meetings in government or business organizations’ (Fairclough 2012, p3). The term ‘text’ conveys the meaning of written or spoken language produced in a discursive event, but also signals the semiotic dimension of social events. Text is the product of the process of text creation, whereas the notion of discourse is deeper, more informative and relevant, since it analyses not only  text  created in written form but discourses referring to the whole process of social interaction of which text is just a part (Fairclough 1989, 24). Text is therefore semiotic and can also give evidence of lasting processes such as the redefinition of social relationships in the reconstruction of identities and knowledge. Text is produced in different ways in specific social context and are shaped by social structures and practices as well as social agents, or persons involved in social events (Fairclough 2003). Text refers to any product whether written or spoken that is simultaneously constituting and representing, relations and identities (Fairclough 1992). Concomitantly, text is defined as a communicative event by Titscher et al. (2000, 21), as well as being embedded in a context which consists of material objects as an outcome of representational practices, using a variety of signifying actors which engender the specific meaning of text (Kress and Van Leeuwen 1996). Consequently, requiring the study of differential relations to the social, political or other context from which the basis of interpretation can be derived (Titscher et al. 2000, 24).

6 

C. CLARKE AND C. NELSON

Discourse Discourse as an element of social life, shapes society and culture from the perspective that every single instance of language use reproduces, shapes or transforms society and culture, including power relations. The boundaries of social life result in different domains for the social use of language. The concept of discourse advocated by Fairclough (1989, 1992, 1993, 2003) includes the properties of text, their production, distribution and consumption. Thirdly, discourse is entailed in ‘ways of being’ by the constituting of identities which are partly semiotically constructed (Fairclough 2000a). These moments combine, corresponding to three functions of language and dimensions of meaning which coexist and interact in all discourse, namely the ‘identity’, ‘relational’ and ‘ideational’ functions of language (Fairclough 1992) reflecting the constructive effects in relation to social identities, subject positions and relationships between people and systems of knowledge and belief.

Critical Discourse Analysis (CDA) CDA explores the relationship between talk and text, discourse practice and their sociological manifestations in context, probing the underlying power relations that ensue. CDA is based upon a view of semiosis as an irreducible element of all material social processes (Fairclough 2000a) and social life is seen as an interconnected network of diverse social practices and every practice is an articulation of diverse social elements which always includes a discourse. Any discursive event (or instance of discourse) is seen as being simultaneously a piece of text, an instance of discursive practice and instance of social practice. CDA is the analysis of the dialectical relationships between discourse and other elements of social practices, including semiosis, and how discourse figures within the processes of change and its shifts in the relationship between semi-and other social elements within the network of practices (Fairclough 2000a). Fairclough’s (1989, 1995) model for CDA consists three interrelated processes of analysis tied to three interrelated dimensions of discourse. These three dimensions are as follows: 1. The object of analysis (including verbal language, vocabularies and visual texts).

1 INTRODUCTION 

7

2. The processes and means by which the object is produced and received (writing/speaking/designing, ways of acting) by agents  involved in social interactive and communication processes such as human subjects. 3. The socio-historical context or conditions which governed or framed these processes emerging overall. Consequently, each of these dimensions requires a different kind of analysis namely, ‘textual’ analysis (which is descriptive and linguistic), secondly ‘processing’ analysis, involving the agents, the purposes and medium for  receiving and  the interpretation  outcomes. Finally, ‘social’ analyses considers societal and or cultural context, location, time and interpretations thereunder within a frame. Hence consumption, as also production, may be individual or collective and have extra discursive as well as discursive outcomes. So, the analysis of a particular discourse, focuses upon text production, consumption and distribution as well as considerations of discursive practice embedded in the social. Discourse is also a form of social behaviour, with social processes being embedded in economic, political and institutional contexts from within which the discourse originates which may explain the social constructions of responses in text production. Fairclough’s conceptualization considers that discourse does not just reflect or represent social entities and relations, they construct or constitute them. Hence, time, historical change, different discourses they may all combine under particular social conditions to produce a new, more complex discourse given that discourse is shaped not only by the structures within which the developments take place but also by the agency of the actors seeking to influence them (Fairclough 2005, 7). Socio-cognitive processes of producing and interpreting discourse are linked to social practices in various contexts and to power relations and hegemonic projects at the societal level (Fairclough 1992). The concept of social practice facilitates the oscillation between the perspective of social structure, social action and agency (Chouliaraki and Fairclough 1999). Social practice consists of a relatively stable and durable form of social activity articulated together to constitute social fields, institutions and organizations. Social practices are dialectically related, in that although there are different elements they are not fully separate, in the sense that each internalizes the arbiters without being reducible to them. Social events are immediate occurrences of life, causally shaped by ‘networks’ of social practices and social agents—and are the sources of texts, playing a role in the production of language, while  still partially shaped by them (Fairclough 2003, 25).

8 

C. CLARKE AND C. NELSON

According to Fairclough (2000a) discourse is entailed in social practices in three ways. Firstly, it is a part of the social activity within the practice which entails using language in a specific manner. Secondly, discourse is a part of representation, as social actors produce  and reproduce representations of other practices as well as their own, in the course of activities within a particular practice. As these in turn, are incorporated into their own practices, different social actors will again represent them differently, depending on how they are positioned within the practice. Hence representation is the social construction of practices including reflexive self-­construction, but also by concomitantly entering and being shaped by other social processes and practices. Semiosis features as part and parcel of social practices exercised in social fields, within institutions and organizations. Firstly, it becomes part of the activity, action and interaction within social practices being reflected also in language and systems of genre (which in themselves retain the capacity to change independently) thereby engendering change within the social practices themselves (Fairclough 2000b). Semiosis is also featured secondly, in representations, as actors in various fields and organizations produce representations of other practices as well as reflexively their own practices in various interactions and activities. There is also the recognition that different social actors will represent and perform these differently in relation to how they are positioned within the fields or organizations in which they operate. (Fairclough 2000b). Finally, semiosis is factored in ‘ways of being’, capturing issues of identity and styles within discourse also translating to bodily behaviour. Altogether discourse in this context, engenders change in social practices, structures and modalities of relationships, becoming inscripted and inculcated while simultaneously  engendering new ways of being, new representations, that  alters internal rigidities of structural networks of practices facilitating the amenability to change and reflexivity. ANT, views IMF Agreements as separate actor networks where the development of each corresponds to the Agreements reached in text. But beyond this, also representing the outcome of a negotiated discourse and practice through enrolment towards mobilization to be inculcated by the actors and other parties networked within it. The discourse dimension of the text provisions of various Agreements represent the discoursal vehicles which have to be inscribed, inculcated and reflected in social practices within the participating actors’ networks successfully, which would enable the respective IMF Agreement actor network to become ‘black boxed’ attaining  a degree of stability. It is through the IMF Agreements’ discourse emanating from text provisions being effectively assimilated and

1 INTRODUCTION 

9

inscribed into  the other actor networks, which contours the degree to which networked relations are derived. Thereby, the network relations and the  dynamics  exhibited through the four moments of problematization, interessement, enrolment and mobilization are sustained. The IMF Agreements’ actor networks emerge, persist  and are enlarged towards achieving a ‘macro social’ status  dependent upon the effectiveness and efficiency of the inculcation of the discourse inscriptions within the discourse and practice of participating Government actor networks. The exploration utilizes the network perspective of ANT or actor networks to capture diverse actors and the way in which change is networked with dynamic connectivity, considering various institutional procedures, practices and modalities of governance. Further, in response, there are implications for relations whether multilevel, multipolar or multifaceted, considering how they have, undergone realignment, been impacted or  achieved a new equilibrium in the quest for stability and the establishing of new or revised norms. The IMF Agreements within ANT’s network epistemology are not deemed passive but dynamic and have, (through various provisions representing its discourse and practice) influenced the discourse of the Jamaican actor network, its institutions, modalities of governance, inclusive of the economic, social and political. The changes engendered has influenced a myriad of human relationships, social interactions and associations amongst and between key participants of the Jamaican actor networks created, inclusive of altering the participating actors’ discourse and practice to the point of some of them being black boxed, even temporarily given the network dynamics.

Methodology ANT’s epistemology facilitates the incorporation of other approaches and is compatible with several methodologies that enable diverse explorations of the phenomenon, distilling new dimensions in understanding the complexities and conditions prevalent over time. ANT, as a theoretical framework, combined, with the methodological approach of CDA were used to analyse the discourses around the Agreements and related actor networks. The incorporation of discourse as a moment within the actor network, introduces an analysis of the connectivity between and within actor networks and their associated peripheral networks which are discoursal in character. Collated data was analysed from the perspective of Strauss and Corbin’s Constant Comparative Grounded Theory (1998), Yin’s (1994) Case

10 

C. CLARKE AND C. NELSON

Study method approach using inductive strategies consistent with Grounded Theory method and Constant Comparative approach with respect to the qualitative data. These approaches hold great potential to facilitate analyses of the data and provide understanding and insight into social phenomena. Analyses employing Constant Comparative techniques, facilitate comparisons within and across the data and presents avenues for multiple sources of evidence. One cannot discount the value of bricoleurian research methodologies, utilizing several approaches within studies such as these, engendering a more holistic, multidimensional appreciation and exploration of the phenomenon and diversity of perspectives posited. Textual analytical tools such as Content Analysis and Fairclough’s Critical Discourse Analysis (CDA) were also employed to undertake some of the literature reviews and examination of the texts, discourses and communicative processes but also the systems and protocols that govern and affect the processes of text themselves. The findings from the analyses were triangulated with data from multiple sources (Flick 2007). Qualitative methodologies and data collection entailed primary and secondary data sources, creating a corpus of text which consisted of interviews, observations and various types of documentation and media. Employing a social constructivist perspective, relied upon the use of text as data, ‘systematically gathered and analysed throughout the research process’ (Strauss and Corbin 1998, 12). Primary data was obtained from coding text from high-level interviews from key informants and through ‘snowballing,’ while  other interviews were conducted as audience was facilitated, where persons were available and access was granted. Secondary data included official documents, international reports, archival records and documents which were combined to inform the process. IMF  Article IVs, Prime Ministers’ and Ministers of Finance Budget Speeches, academic and journalistic writings and commentaries about the Jamaican economy, society, environment and governance all served to inform and  construct the features, characteristics and complexity of the Jamaican state and actor network. Texts about the IMF concerning its activities and raison d’être and exploration of its international footprint through its own institutional documents and outputs as well as printed materials from public, multilateral and government databases were also incorporated. From the data collected overall and the corpus of text derived, served to undergird the analytical outcomes and support the interpretation and understand of the depth of diversity in terms of discourses and social practices that emerged. A desk review was undertaken of relevant background

1 INTRODUCTION 

11

materials with respect to the corpus of text as aforementioned, inclusive of electronic media reports, newspapers and examining publicly available databases. The knowledge sought to be analysed and validated through triangulation and the linking of data from the different sources and the methods used. The scope of the project is comprehensive and also presents implications for the economic bases of highly indebted, middle income countries engaged in relationships with the Fund. Further, it highlights the all-­ encompassing nature of IMF programmes touching every facet of a small and vulnerable nation state—the economy, political, social, cultural attributes supported by changes in discourse and practice over time. There are structural changes and revised policy frameworks on the road to development and macroeconomic and fiscal problem solving, which is reflected in the practice of the Government as an actor network. Within the historical, global and political-economy context of the relationship, efforts are made to bring to the fore socio-political, economic and developmental implications from analysing the various contexts. It has been posited that other multilateral development partners (MDPs) have not ‘left’ such an indelible mark, as their relationship has been shorter in length and conditioned in part by that of the IMF, this being more apparent over the last ten years. Further, that the multilateral policy coherence specifically with regard to the more recent IMF interventions, can be argued as being complementary, or synchronized  or even harmonized with the efforts of the MDPs. The changing discourses that are reflective of and which undergirds the progression of the interventions of the IMF over time are signalled. What is foregrounded is the all-encompassing nature of IMF programmes touching every facet and fibre of the Jamaican state—the economy, political, social, cultural attributes—supported by and requiring changes overall in the national discourse and practice over time. There are structural changes and revised policy frameworks along the development trajectory inclusive of macroeconomic and fiscal problem solving, in the practices within the government actor network. The International Monetary Fund as an actor, whilst not innocent of implementing policy mistakes and blunders, was not the demon it was painted as during the 1970s and 1980s. In the end, the Fund has redeemed itself to the various actors in Jamaica and around the world as being a force for economic, social and even climate good, where programmes are not implemented unilaterally by the state as an actor, but where a wide range of actors are incorporated in holding the state to task on its responsibilities. 

12 

C. CLARKE AND C. NELSON

Bibliography Bijker, W.  E., & Law, J. (1992). Shaping technology/building society: Studies in sociotechnical change. Cambridge: MIT press. Callon, M. (1986). 1986: Some elements of a sociology of translation: Domestication of the scallops and the fisherman of St Brieuc bay. In J.  Law (Ed.), Power, action and belief: A new sociology of knowledge (pp.  196–232). London: Routledge. Callon, M. (1990). Techno-economic networks and irreversibility. The Sociological Review, 38(1_suppl), 132–161. Callon, M., & Latour, B. (1981). Unscrewing the big Leviathan: How actors macro-structure reality and how sociologists help them to do so. In Advances in social theory and methodology: Toward an integration of micro-and macro-­ sociologies (Vol. 1). London: Routledge. Chouliaraki, L., & Fairclough, N. (1999). Discourse in late modernity: Rethinking critical discourse analysis. Edinburgh: Edinburgh University Press. Cordella, A., & Shaikh, M. (2006). From epistemology to ontology: Challenging the constructed ‘truth’ of ANT. London: London School of Economics and Political Science. de Jong, B. (2007). Shedding Light on the darkness: Using the Actor-Network theory to analyse the distribution of power. Paper for the 47th Europe Regional Science Association. Paris France. August 29th – September 2 Fairclough, N. (1989). Language and Power‖ Longman. London: Longman. Fairclough, N. (1992). Discourse and text: Linguistic and intertextual analysis within discourse analysis. Discourse & society, 3(2), 193–217. Fairclough, N. (1993). Critical discourse analysis and the marketization of public discourse: The universities. Discourse & society, 4(2), 133–168. Fairclough, N. (1995). Media discourse. London: Edward Arnold. Fairclough, N. (2000a). New language, new labour. London: Routledge. Fairclough, N. (2000b). Discourse, social theory, and social research: The discourse of welfare reform. Journal of sociolinguistics, 4(2), 163–195. Fairclough, N. (2003). Analysing discourse: Textual analysis for social research. New York: Psychology Press. Fairclough, N. (2005). Peripheral vision: Discourse analysis in organization studies: The case for critical realism. Organization studies, 26(6), 915–939. Fairclough, N. (2012) “Critical Discourse Analysis.” International Journal of Advances in Engineering & Technology 7, July (2012). Flick, U. (2007). Qualitative research designs. Designing qualitative research (pp. 109–114). London: Sage. Garson, G.  D. e. (1999). Information technology and computer applications in public administration: Issues and trends. Hershey: IGI Global.

1 INTRODUCTION 

13

Kress, G. R., & Van Leeuwen, T. (1996). Reading images: The grammar of visual design. Routledge, Taylor & Francis Group, London & New York. Latour, B. (1986). The powers of association. In John Law (Ed.), Power, action and belief. London: Routledge & Kegan Paul. Law, J. ed. (1991). A sociology of monsters: Essays on power, technology, and domination (No. 38). London/New York: Routledge. Law, J. (1992). Notes on the theory of the actor-network: Ordering, strategy, and heterogeneity. Systems practice, 5(4), 379–393. Law, J. (2007). Actor network theory and material semiotics centre for science studies, Lancaster University. Disponible en web: http://www.heterogeneities.net/ publications/Law ANTandMaterialSemiotics.pdf Law, J., & Hassard, J. (1999). Actor network theory and after (1st ed.). Oxford: Blackwell. Law, J., & Singleton, V. (2005). Object lessons. Organization, 12(3), 331–355. Lowe, A. (2001). After ANT-An illustrative discussion of the implications for qualitative accounting case research. Accounting, Auditing & Accountability Journal, 14, 327–351. Murdoch, J. (1995). Actor-networks and the evolution of economic forms: Combining description and explanation in theories of regulation, flexible specialization, and networks. Environment and Planning A, 27(5), 731–757. Ritzer, G. (2007). The Blackwell encyclopedia of sociology (Vol. 1479). New York: Blackwell Publishing. Saeed, A.M. and Gopal, A. (2005). ‘Immutability, Inimitability and Autonomy: The 3 little paradoxes of the Toyota (Re) Production System’, Stream 27: Technology and Power, 4th Critical Management Studies Conference, Judge Business School, University of Cambridge, UK Stalder, F. (1997). Actor-network-theory and communication networks: Toward convergence. Toronto: University of Toronto. Strauss, A., & Corbin, J. (1998). Basics of qualitative research techniques. Thousand Oaks: Sage publications. Titscher, S., Meyer, M., Wodak, R., & Vetter, E. (2000). Methods of text and discourse analysis: In search of meaning. Sage: London. Williams-Jones, B., & Graham, J.  E. (2003). Actor-network theory: A tool to support ethical analysis of commercial genetic testing. New genetics and society, 22(3), 271–296. Yin, R. K. (1994). Case Study Research. Thousand Oaks: Sage Publications.

CHAPTER 2

Jamaica ‘Comin’ in from de Cold’

Introduction Xaymaca or Jamaica emerged onto the European historical landscape with its discovery by Christopher Columbus, who sighted the island in 1494 and called it Santiago. Being the third-largest island of the greater Antilles and the Caribbean, Jamaica was originally inhabited by indigenous Indians called Arawaks or Tainos. After it was colonized by the Spanish a number of African slaves were transferred to Jamaica as labourers and the island remained in the possession of the Spanish until 1657, when it relinquished ownership to England after the Battle of Ocho Rios and later the Battle of Rio Nuevo in 1658, when the Spanish tried to recapture the island. The Treaty of Madrid marked the formal ceding of the ownership of Jamaica to the English in 1670, whereby the slaves left behind by the Spanish formed alliances and created their own settlements. These slaves formed three settlements, two of which were led by Juan de Serras and Juan de Bolas, who were both Maroon leaders, the former allied with the Spanish guerrillas living at the western end of the Cockpit Country in Trelawny and the other in the parish of Clarendon, serving as a black militia for the English. The latter’s alliance with the British was instrumental in dispelling the second attempt of Spain to recapture the island. Under British control the island was soon populated with indentured servants, prisoners and slaves inclusive of immigrants from the North American mainland and British Buccaneers. The slave population © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_2

15

16 

C. CLARKE AND C. NELSON

gradually increased becoming the labour force for the plantations due to the importation of slaves by the end of the seventeenth century, which increased the black population to three times the number of whites on the island. Numbers increased from one decade to the next coming from the west coast of Africa. Cognizant of metering the racial balance within the colonies, one approach employed by the British was that of conferring British citizenship rights to the non-slave population. Colonization and being part of the British Empire served to implant patterns and systems and constructs of meaning surrounding government, power, rule of law, honour, ethics, rights and the standards of conduct of societal affairs as well as societal designations surrounding ‘place’ and ‘station’. These ‘norms’ were enforced formally and informally by the state through various institutions and mechanisms. These attributes and aspects were tenuously held, linked to the economic viability of the plantation society and culture surrounding slave labour, sugar, then later bananas and the value contributed as part of the colonial actor network, enabled through networked power relations conferring macro social actor status to the British Empire. The issue of landownership acquired  great significance in a context where the freed person was afforded the opportunity to do so, especially when the permission to access avenues of formal participation in the political system was based on being property holders. Consequently, the connection between property and politics was entrenched in legislation in these early years, taking on additional meaning and dimensions of power for freed people. Conversely, in order to be able to influence the political system, ex-slaves had to acquire property of sufficient value which would enable them to vote and thereby participate. The newly enfranchised smallholders, desired to have an impact on the politics within their respective parishes within which they were resident as community members and to resist the continued dominance of the plantation, ultimately to challenge the hegemony of the planter class. In 1838 and 1839 there were conflicts over rents payable and wages between the freedmen and the plantation which at times became bitter and was only resolved with the intervention of the missionaries and stipendiary magistrates. The latter sought to encourage the planters to offer better terms and admonished the workers to consider the demands they were making. The church (non-Anglican) served as a catalyst for the advocacy of the freed person and was actively involved and practical in furthering the establishment and founding of free villages. The Quaker abolitionist, Joseph

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

17

Sturge, as well as the Jamaican Baptist congregations, pioneered the concept of ‘free villages’, which were created from 1830 to 1840 with land purchased for the settlement of freed slaves after emancipation. These lands were independent of the control of the estates and plantation owners. Slaves could not be sold land even if they became freed, consequently planters provided rented accommodation for the slaves and hence were able to tie them, (as their labour force) to the plantation. Availing themselves of lower labour costs, with the ability to sequester wages for rent etc., at will, the plantation owners, restricted as well as prevented freedom of movement and labour choices prohibiting  the slaves from moving between employers. Given that emancipation from slavery was on the horizon in the 1830s, Baptist and Quaker organizations in England discreetly purchased land in Jamaica through land agents in London thereby avoiding the detection of their activities by the planters. The free villages were established independent of estate owners. Sturge Town Free Village was founded in 1838, the first Free Village or Baptist Free Village was located at Sligoville, and others were Clarksonville, Buxton and so on. The freed person bought their own piece of land for a house spot, enabling their opportunity to vote and to participate in the political process inclusive of choosing their political representative. Planters also began using marginal lands which were utilized by the freed person to create a reservoir of labour nearby. These growing enclaves were mobilized as the new class of small freeholders who were encouraged to register their titles so as to participate in elections with a view to vote out the assembly of planters who were imposing taxes on the animals and food produce of the freeholders. The planters were also using the increased revenue from the rental of marginal lands, allocating it to the police and the established church (Anglican) as well as for immigration. The Baptist missionaries began infant steps towards political mobilization in conjunction with the freed persons, the Quakers, as well as progressive individuals in the Methodist and Presbyterian churches, to launch a campaign using the freed persons’ villages. This ‘politics of Christianity’ involved the mobilization of the ex-slaves for the 1845 election with the intention for them to elect liberals to the Assembly and to dislocate the Anglican Church. Becoming aware of the scheme, the Governor called a snap election in 1844 which caught the allies off guard as many of them had not yet registered their free holdings. Despite the unsuccessful first  attempt to use the villages as a political base, this strategy was pursued, regardless. In 1846 and 1847 with the support from voters of the villages, three Baptist Ministers were elected to the

18 

C. CLARKE AND C. NELSON

parish vestry. Political manoeuvring at this level was demonstrated as the magistrate who sat as an ex-officio member, used his authority to block all the Baptist-sponsored initiatives. Nevertheless, through these mechanisms the villages were brought into the politics of the parish, enabling their representative to finally obtain a seat in the Jamaican Assembly in 1852. The trend for the inclusion of the freed person in the political process took a retrograde step after the radical actions taken at Morant Bay in 1865, where the rebellion emboldened and prompted freed persons to, among other things, aggressively demand land to consolidate their pending Emancipation and freedom. The rebellion prompted a crushing response from Britain, resulting in the unravelling of some of the gains made, resulting in the re-entrenchment of the authority and political influence of the large landholders and planters in the politics of the island and the reassertion of the plantation as a feature of socio-economic dominance over the Jamaican socio-political and cultural landscape.

Post-Emancipation In retrospect, when slavery ended in the 1830s and emancipation proclaimed in the early 1900s, the freed people of colour had expected substantive changes in their socioeconomic conditions. Except  that, not much changed, at least not for the next 100 years. This was demonstrated by the fact that many blacks defected from the Apprenticeship Programme—the transition programme that had the objective to socialize the former slaves to the norms of a free society—due to the fact that it was considered in terms of its effect, as being ‘slavery without the name’ (Mordecai and Mordecai 2001, 14). The rate of defection was at such a level that the Programme, which was supposed to last twelve years, came to an end after four years. The settlement of lands owned by the state (Crown Lands), the purchase of small plots and the establishment of ‘free villages’ were clear demonstrations of the desire of the populace for improved material conditions. In 1834 the Act of Emancipation was promulgated whereby the slave society was freed, however all  the children of slaves under the age of 6 where also automatically freed, but those above this age, were compelled to serve a six-year term of apprenticeship for them to get used to the system of wage labour. This system was interpreted as being a mechanism of partial compensation to planters for their slaves being freed, so they were given this license as gesture by Britain, being an overture or partial reprieve before the final impact of the loss of their slaves would be felt.

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

19

The Apprenticeship System created a conundrum with respect to the tension between the planters and the slaves. Inflexibility and retributive tactics were exhibited by the planters who did not want to part with their slaves and who used devious means to retain their power over them and in some cases, negatively exacerbating their conditions of employment knowing they would inevitably lose them. These ‘tactics’ served to convey to the freed person in the network of relations, that they were still subjugated within the colonial actor network of relations, that nothing had changed and societal hierarchical relations of dominance and power remained. On the part of the slave, his conditions became worst in some cases, compounded by being given ‘freedom’ on paper, but not enforced, instituted or implemented in relation to effecting changes required in the social practices that should obtain as a result of the legislative changes. Prevailing conditions, social practices and power relations under slavery persisted, coupled with psychologically living on the edge of anxiety, unable to be free to disassociate himself totally from the estate as an actant and the symbol of pain and bondage it represented. The absence of substantive change and the amelioration of their condition, twinned with the absence of alternatives socially, ideationally, economically and politically set the context for the events that followed. Cumulatively, these served as the backdrop supporting the premonition of the rebellion that was to come in 1865. The gradual reduction or change in legal control which the laws conveyed, signalled the gradual diminishing of the networked relations and linkages of the institutions of slavery. Inadvertently, these actually conveyed degrees of instability, insecurity and increasing tension with each successive promulgation of ameliorative change without the  commensurate adjustment or change in structural terms, through new relational standards and norms, having their  expression within societal reality. The promulgation of the various laws and the mixed interpretation and understanding of them, divorced from realities on the ground  betrayed  tell-tale signs of negative change in the form of untethering and stressing the power relations established within the networks undergirding the slave plantation society and economy which had formerly served to maintain its stability. With the onset of early globalization and new ‘thought’ on the economy, wealth and the inefficiencies incumbent within the socio-economic institution of slavery and the old mercantilist ideology, sovereign states began dismantling these institutions signalling a change in how markets, economies and trading relations would be managed. These changes were mirrored in new societal structures and the emergence of an

20 

C. CLARKE AND C. NELSON

entrepreneurial and ‘working class’ as technologies of mass production and industry reshaped the agrarian landscape and traditional social relations in Britain and Europe. Mercantilism was being replaced by ideologies embracing tenets of liberalism and free trade. The economics of ‘beggar thy neighbour’ policies in state trading relations were being contested and dismantled towards achieving efficiencies and profits associated with comparative advantage and trading across borders in the pursuit of wealth creation, enlarging state political productive power and influence enabling the global expansion of the British Empire and competing European nations. The adoption of the new economics of liberalism and ‘free trade’ required creating a new societal network of economic as well as societal relations to support the transformation. Mercantilism and the societal networks, institutions and power relations which undergirded them had to go. The focus turned to industry and the slave becoming the new labour or working class with the slave owner as the purchaser of that labour as a factor of production, despite the slave being a reluctant seller (given the historical context) of his labour and position of dependency. The enactment in 1846 of the Sugar Bill abolished the preferential treatment for sugar received from the colonies. This was repealed as there were cheaper sources available from trading with Cuba and the Americas furthermore, the plantations had become a drain on the British Treasury. In the case of the slaves who as freed men decided to work on the Estates and offer their services for wages, the owners also deemed them as tenants and started to charge them rent for housing and use of the grounds unlike before. Consequently, the slaves received minimal payment for their labour, as part of their wages was being sequestered to cover the cost of rent on estate property. In addition, as there was no contractual arrangement or fixed rental for accommodation agreed, rates were arbitrarily fixed and charged for each occupant of the estate house, leading to claims, counterclaims and recriminations in the informal and contentious arbitration of rent for accommodation received, and negative exacerbation of the labour relations of employment. This state of affairs had several repercussions for the ‘new’ labourers or former slaves who now had no other employment, were faced with deprivation, starvation and irregular employment on these same estates, representative and symbolic of the slavery now abolished, upon which they were still  dependent  as their only source of employment and now, their income. The estates themselves were economically under threat from the new phenomenon of competition in the market,  with diminishing

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

21

productivity, colonial subsidies  and preferential treatment, compounded by crop failures, some due to exogenous factors like drought. From as early as 1863 and 1864 there were reports of labour strikes for wages, specifically on the sugar estates. Appeals were made to the Secretary of State for the colonies for assistance, which was referred to the Governor who refuted the allegations which when combined with his lack of responsiveness, inadvertently contributed to the creation of the context for the Morant Bay rebellion of 1865. A letter sent to the British government in London by a Dr. E.B. Underhill, described the people as ‘starving’, ‘unemployed’ and argued even further, that there was ‘no capital to employ them’ (Quoted in Palmer 2014, 29). It was this ‘seething discontent born of the cumulative unresponsiveness to the plight of the freed slave by the status quo that led to the rebellion in Morant Bay’ (Palmer 2014, 29). The main issues that were raised by the leadership of the rebellion, signalled by events prior, during and after the rebellion, related to specific societal issues of a lack of fair wages, the cost and access to housing, access to land to cultivate and earn, and access to justice. In other words, the rebels of the day linked the evidence of substantive freedom to changes in their material conditions, so that life could be made qualitatively different from that which they had to endure under slavery. The ‘new’ society and the transitioning of the slave towards becoming the ‘new class’ of labourers was a challenge in the making, as this would require  the ‘freed slave’ to experience freedom, and choice,  and to be taught how to adapt, adopt and develop new  attributes and a new, discourse and practice alien to his circumstance or culture. Commensurately, he would have to unlearn the attributes, discourse and practice of a slave, born of hundreds of years of slave culture and associated practice to henceforth rematerialize and become the ‘new’ labour source for industry in the colonies. The Crown Colony regime had placed almost unrestricted power into the hands of a Governor, who like his counterpart, expectedly took sides, supporting the position and cause of the planter class against the middle and lower classes. Under both systems, political participation was restricted to those earning a certain level of income, or owned property that exceeded a certain threshold in value (Bakan 1990; Palmer 2014). For example, in 1864, less than half of a percent (0.4%) of the population was eligible to vote (Bakan 1990); in 1935 this figure increased to around 6% which was still relatively small considering that the population had increased by some 39% over the same period (Bakan 1990; Palmer 2014).

22 

C. CLARKE AND C. NELSON

The brutality of the security apparatus in breaking strikes and dismantling protests inferred that representatives were decidedly against taking the concerns of the masses into consideration. For example, the brutality of the response to the rebellion in Morant Bay saw the two leaders, Paul Bogle and George William Gordon, along with hundreds more being hanged, many others flogged, and still many others had their homes destroyed (Mordecai and Mordecai 2001). The persistent plantation  mentality and the animosity towards the planters had not dissipated with the termination of slavery in 1838 hence hostility still existed between the black masses and the planters. Further, there was  a breakdown of workable relationships between the various classes and the old representative system which had been extremely oppressive towards the masses in terms of taxation, justice and education, land distribution and controversies involving instances of squatting on land. It is noted that the coloureds and the whites had formed an alliance to maintain social relations of power which kept the black masses in their place at the bottom of the hierarchy and to prevent them from ascending or realising their potential and becoming a dominant role in the Legislature. The Morning Journal was a newspaper that began publishing in 1838 which had daily publications except on Sundays, that highlighted some of the positions taken by the ‘coloureds’ after the Morant Bay rebellion and discussions that followed surrounding the Constitution and the question of local participation in government. There was a dramatic change in the attitude of the coloureds as expressed by the newspaper Morning Journal of 1865, as during the course of the Morant riots and the period of martial law that followed, it notes that the coloureds had joined in cheering the brutal suppression of the rebels by the British and the West Indian military forces. The ‘blacks’ were castigated for their barbaric acts. The coloureds blamed the blacks for the outcome of the Morant Bay rebellion which resulted in the change in the attitude of the  government and fracturing of societal relations, thereby eliminating the means and relationships by which the coloureds, which represented the education and wealth of the country, sought  to gain positions in the arenas of public affairs which they had been gradually working towards. Their sentiments were that the Morant Bay rebellion only concerned a few people in one corner of Jamaica, and it was unfair for the actions of these few to be used to destroy  and compromise the liberties of the Jamaican people, whereby the coloureds became the greatest losers in 1865.

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

23

Political System and Representation The political system—the Old Representative System—was the governance structure until 1865, when it was replaced by the Crown Colony System. The Old Representative System was supposed to integrate the ex-slaves into the political process, but given that it represented the interests of the plantocracy, which were geared towards the maximization of profits and the accumulation of wealth, this system of governance maintained the old restrictions on participation, effectively marginalizing the mass of the population, as reflected in the small percentage of the population who could vote and the filling of official positions by Englishmen (Higman 2011). The Old Representative System consisted of an all-powerful Governor and a nominated Council which he appointed, performing the roles of executive and judiciary; a Legislature was elected through a circumscribed franchise and represented only the interests of the upper classes (Bakan 1990). It is important to note that the Council at times would assume the role of the legislature. That slavery was alive and well under this system, was demonstrated by ‘the re-introduction in 1859–60 of whipping as a form of punishment for certain offences’ (Bakan 1990, 71). Governor Eyre, who presided over the  government’s actions  and response, outcomes and influenced the  legislative consequences of the Morant Bay Rebellion, obtained the approval of the Colonial Office in London after the rebellion, to disenfranchise and abolish the Jamaica House of Assembly, thereby making Jamaica a Crown Colony. Thereafter, with the installation of centralized administrative control of the island in 1866, the political influence of the planters was safeguarded. Factors that thereafter, led to the inclusion and integration of the local elite into the processes of governance and their access were: (1) Legislation in 1884 that required and allowed the election of nine members to the Legislative Council; and (2) a new constitution in 1895 increasing this number to fourteen, adding five ex-officio members, and a Privy Council (a judicial body), which could have a maximum of eight appointed members (Palmer 2014). In fact, the Morant Bay Rebellion was a response to the lack of improvement in and, in some cases, the deterioration of governance as well as the material conditions of the masses (Burnard et al. 2002). Requirements, such as those attached to the payment of taxes; owning land of a stated minimum value; and acquiring a certain level of income from business ventures; connected to the right to vote severely restricted

24 

C. CLARKE AND C. NELSON

those who could vote and further restricted those who could run for office (Bakan 1990; Palmer 2014). The Crown Colony system was of little difference except that it incorporated a few members of the local elite into the institutions of government decision-making and extended the franchise to a few others (Bakan 1990; Mordecai and Mordecai 2001; Palmer 2014). It was clear after the rebellion, that the Colonial Office had used it as an opportunity to suppress the old system deeming it unworkable and to rationalize the change. The Colonial office was relieved that it now had assumed undisputed authority in the colonies. Many of the whites and the coloureds in Jamaica welcomed the establishment of the autocratic system of Crown colony government. Consequently, in place of an elected Assembly which had given power to the whites and the coloureds, a Legislative Council composed of nominated members to serve as an advisory body to the Governor was established by order of the British government. Although the opponents of the abolition of the former Constitution did not number more than ten of the Legislative Assembly, there was general disillusionment among the whites and the coloureds with the new form of government. The whites dominated the Legislative Council, but they were increasingly dissatisfied as they were unable to control the decisions of the Executive. The whites appeared to be disgruntled because after their fears caused by the Morant Bay rebellion had dissipated, they had hoped that the modification in the form of government would have enabled them to resume direct control of the Colony’s affairs (Burnard et al. 2002). The planters were unhappy with the nature of government expenditures and we’re alarmed by Governor Musgrave’s suggestion in the late 1870s, that since the black peasants in his opinion, formed the backbone of the country they should have the right to vote, thus he called for radical change. Pressure was brought to bear upon the British government and because of the attitude of Premier Gladstone, noted for his morality and political reform efforts,  a Commission was appointed to investigate the financial affairs of Jamaica and report on the possibilities of constitutional reform. Recommendations coming from the Commission resulted in the Legislative Council being expanded to include nine elected members. However, the qualification for voting was high and there were only 2000 rich persons eligible to vote in 1884. The franchise was extended by lowering the property qualifications and removing the literacy restriction

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

25

entirely. So, the registration increased to 22,922  in that year, and in 1894–1895 it had increased to 43,258. However, when blacks were elected in 1850 to the Legislative Council, this signalled to all that they were beginning to develop a degree of political awareness. Many of the whites were afraid and adopted an attitude that cooperation with the existing system or a return to pure Crown colony government would be preferable to any form of government in which the black masses would have political power. By the mid-twentieth century they seemingly relinquished any real interest in securing local autonomy or participating in  a political system in which locals could control the actions of the executive. In response to Crown Colony System, the response was diverse. There was a degree of apathy and acceptance of the status quo evidenced in the behaviour of the blacks, lower classes and the peasantry. The black intelligentsia sought to reform the existing system and to integrate all Jamaicans of all races into the political social and economic life of the island. Some chose to remain isolated and separated themselves psychologically from colonial society and  relations of subjugation whereby many tried to find  a mental escape from reality or became enveloped in cult religions. Others in desperation, supported unrealistic propositions such as the promises of ‘dip em’ Bedward. His preaching stressed the sense of racial oppression and frustration felt by his black followers. Social A portrayal of  experiences in the Caribbean  revealed that, the former enslaved persons were freed but without assets, or educational opportunities to enable them to become skilled or learn the English language properly. The challenges faced by the freedmen in reorienting their production towards other crops and animal husbandry and the importance of developing an economic base for their households, fuelled a prolonged wave of rural to urban drifts of the population to the capital city—Kingston. The poor infrastructure and unavailability or inadequacy of available housing and jobs made it very difficult for these newcomers to integrate into the Kingston society and economy. For those who were able to find work, they found the working conditions untenable as there were no standards for pay, leave, conditions of employment as well as the other ancillary aspects of work.

26 

C. CLARKE AND C. NELSON

Sufficiently radicalized by these conditions, the mass of Jamaicans became quite receptive to the rhetoric of Bedwardism and Garveyism, two movements that influenced in a profound way the sensibilities of the black masses. The result of this was a radical, re-articulation of the demands being made on the Colonial Government for an improvement in the material conditions of the people. The system of taxation, however, was designed to maintain this state of affairs: imported food and goods  that formed the core of the poorer classes or the black persons’ diet were taxed more heavily than technology used by the upper classes; the smaller holders of land were taxed more heavily than the large land owners (Mordecai and Mordecai 2001). More pointedly, the words ‘white/European’, wealthy and powerful became coterminous whereas, in contrast, the words ‘black/African’, was associated with or synonymous with, for all intents and purposes, poverty and powerless. It was this context, that led Alexander Bedward and the Marcus Garvey to develop their respective programmes framing the recognition of the worth of the black masses as well as demands for specific measures for change in the socio-economic conditions and racist ideology that was perpetuated that was in immediate need of deconstruction. Bedward had worked on the Mona Estate in St. Andrew and founded the Jamaica Baptist Free Church in the nearby community of August Town (Bakan 1990). From the 1890s to the 1910s his movement was national in its outreach and his messages to the followers of his movement were characterized by an attack on what he saw as white power and privilege (Palmer 2014). He once impressed upon his significant followership that ‘[h]ell will be your position if you do not rise up and crush the white man … The white wall has oppressed us for years: now we must oppress the white wall’ (quoted in Bakan 1990, 95). In a similar vein Garvey, who organized one of the earliest American black nationalist movements, reminded his followers that ‘[for three hundred years the white man has been our oppressor, and he naturally is not going to liberate us … We have to liberate ourselves’ (quoted in Mackie 1987, 15). These forms of rhetoric stoked the fire of a racialized nationalism, or Black Nationalism, which challenged the prevailing political structures towards reshaping the discourse and surrounding socioeconomic outcomes so that they would benefit the masses. With this Black Nationalist ideology as one of its philosophical premises, not only freedom was demanded but entitlement to a share in the ‘economic pie’ for the peasantry, but also their substantive participation in political processes. Even more than the leadership of the rebellion and the trade unions and the

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

27

political parties it spawned, the mass of black, deprived and dispossessed Jamaicans struck fear in the Colonial establishment reminiscent of 1865. Meanwhile with the emergence of the abolitionists,  advocates of ‘a social conscience’ and human rights, the British Parliament became convinced of the injustices of the enslavement-based economic model, used to enrich England. This was simultaneous with the acceptance that the plantations in the West Indies were no longer profitable and producing  the monetary sums enjoyed since the 1500s, hence the cessation of the slave trade was granted. This abolitionist movement generated and fuelled the winding up of this economic activity in what had appeared to be a tidy manner for the British. Economic Key features of Jamaica’s economy can be traced back to the late 1800s. The centuries-old sugarcane-based economy had become unviable in the wake of new and cheaper sources for refined sugar. The disinterest of the English in Jamaica as they transitioned out of sugar and into other sectors, led to serious underinvestment in the local infrastructure such as water, roads, housing and health care that was critical for individual and household welfare as well as complementary to the development of any kind of private sector activity. Jamaica’s economic system also went into the colonial period intact with its structure proving quite resistant to any real change. Although slave labour nominally became wage labour, working conditions remained virtually the same since it was not uncommon for the wage to be withheld from the labourers. In other words, the peasantry was denied the realization of the single most distinguishing feature between the new system and the old: the payment of a wage for their labour. There were some positive changes under more reform-oriented leadership, such as Sir J.P Grant who took over the governorship from Governor Eyre in 1866, who increased spending on public health, utilities and education (Bakan 1990). However, the reality was that a large section of the population, especially those of the darker hue, saw little or  no positive change in their material conditions which made them especially receptive to radical proselytizing. The Jamaican economy grew very, very slowly between post-­ emancipation and 1865 because sugar had declined so dramatically. When the government responded to the riots in St Thomas—the Morant Bay Rebellion—it started putting in infrastructure to allow for small farmers to

28 

C. CLARKE AND C. NELSON

grow their own crops, opening up their land to coffee, bananas, coconuts and logwood—thereafter,  non-traditional exports started to emerge, so that Jamaica began to realise some degree of growth. The economy was heavily dependent on the export of agricultural produce, especially sugar, which made it acutely susceptible to the vicissitudes of the international economy. The effects of this orientation were felt when a depression in the 1890s resulted in a sharp reduction in the price of Jamaican sugar and related products such as rum and molasses. To put this into perspective, approximately 39,000 Jamaicans depended directly on the production of sugar for their incomes with others involved in the manufacture of rum and molasses whose prices were also affected by the decrease in the demand for sugar (Crichlow 2005). In the face of worsening conditions in 1895, the Government of Jamaica presented a scheme to sell crownlands to small settlers on easy terms. This represented the first official attempt to settle the masses on their own land; however, the quantity of land allotted was the focus and not the quality. It is noted that the land settlement scheme was deemed too late to supply good-quality land to small settlers. Unfortunately, the scheme did not have the desired effect because the land provided was unsuitable for farming without which the development of the peasantry was not possible. The scheme was unpopular among the target group and it was surmised that part of the challenge resided in the fact that the land settlement scheme was a palliative with the intent to retain the existing agrarian structure and not to change or overhaul the deficiencies in the patterns of land tenure overall. The introduction of land settlement in Jamaica served only to try and incorporate and absorb as many people as possible in the context of responding to declining employment opportunities for the masses, in sync with downturns in the economy, for example, when the collapse of the sugar industry was imminent. Official records do not reveal any well-­ articulated policy dictates from the Legislative Council with regard to land settlement, which underscores the view that there was a lack of organization and weakness in the creation of the programmes for land redistribution. Informal comments made by governors from which intentions concerning land settlement could be inferred, became the substitute for official utterances in that regard. The decline in the sugar industry of the late nineteenth century was temporarily checked by the economic upswing created by World War I (WWI). By 1920–1930 the average size of estates had increased for

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

29

productive purposes as outside supplies had declined due to the effect of WWI.  This resulted in the displacement of numerous smallholders and small growers, similar to that which occurred when the banana industry emerged in the twentieth century. Land displacement was evident impacting numerous small landholders which intensified during the early twentieth century as both individual and corporate foreign landowners consolidated their positions in the country. Two American companies, in 1928, namely the United Fruit Company and the Atlantic Food Company, had more land under their control than the total acreage allotted under the 1895 land settlement scheme and consisted of the best lands. Peasants farmed the marginal areas whereby some of these were actually rented from their neighbours (Burnard et al. 2002). Emigration up to 1921 curbed the pressure of land demand, in the context of hundreds of peasants controlling unproductive plots averaging about five acres in size. After 1921, Latin America and the United States who were the key recipients of emigrating Jamaicans, no longer accepted them across their border. The repatriation of labour from Cuba intensified the unemployment crisis in the 1920s along with demands for the government of Jamaica to settle ex-soldiers of the British West India regiment. In principle, the position of the government of the day was that ‘racial distinctions between Her Majesty’s subjects should not be made’ (Bryan 1991, quoted in Mordecai and Mordecai 2001), but the reality was that the correlation between race on the one hand, and wealth and power on the other, was of such a strength that the relationship might have been seen as a causal one. To be white ‘signified privilege, social prestige, and superior human … [but] black Jamaicans were trapped at the bottom of their homeland’s social and economic order’ (Palmer 2014, 65).

Trade Unionism Trade union organizations were born in Jamaica in 1919, when the first piece of legislation recognizing and legitimizing unionization was placed on the books (Daniel 1957). It is interesting to note the status given to the early unions by this piece of legislation which technically rendered these organizations minimally effective since picketing and strike action were both prohibited (Daniel 1957). In other words, unions were practically emasculated by the fact that the most immediate and potent weapons in their arsenal in times of unfavourable negotiations, were legally circumscribed. Nevertheless, despite the absolute weakness of this legislation it

30 

C. CLARKE AND C. NELSON

opened the doors to the formation of a number of trade unions—chief among these were the Bustamante Industrial Trade Union (BITU) and the Trade Union Congress (TUC)1—that negotiated wages and changes in the working conditions for labourers. The Longshoremen’s Union Nos. 1 and 2 were formed in 1922 and 1926 respectively; merging with a few others they formed the Jamaica Federation of Labour in 1926; the Jamaica Workers and Tradesmen Union (JWTU) was registered in 1937; the BITU was formed in 1939 which was an amalgamation of a number of small unions representing several types of trade workers. These unions were the people’s representative against such private interests as the West India Sugar Company Ltd. (WISCO)—the local representative of Tate and Lyle and the United Fruit Company. These companies, through their payment of inadequate wages and provision of poor working conditions with almost no social benefits, were the main targets of union activities. Significantly too, it was out of these unions that the political parties emerged to serve the democratic purpose of interest aggregation when the franchise was made universal in 1944.

Disturbances A more critical interpretation of the disturbances that rocked Jamaica and the wider Caribbean region during the decade of the 1930s such as that given by Bakan (1990), Palmer (2014) and Mordecai and Mordecai (2001) highlights the racial dimensions that prevailed that were tied to the material conditions of most Jamaicans. Hence, the political dimensions showed issues of race and economic deprivation undergirding the struggle for political decolonization/independence. Discourses surrounding issues of personhood, freedom, class, race, democracy, sovereignty, nationhood, governance, leadership and development, became centre stage, embodying the divide between the middle and lower classes while confronting the colonial superstructure. For example, the middle class, especially the left intelligentsia, wanted to participate in the political process, especially at the leadership levels, and so demanded amendments to the constitution that would increase their participation through internal government and the right to  self-rule, then towards independence. The lower classes were demanding improvements to their material conditions which were stymied, relating this  to 1  Successor to the Trade Union Advisory Council; it later became the National Workers’ Union (NWU).

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

31

their race and ideas of freedom that placed emphasis on access to land and employment (Bakan 1990; Palmer 2014). The movement came to a head in 1938 in Jamaica, but the conditions leading up to it, was reminiscent of and mimicked those that led to the Morant Bay Rebellion of 1865, where some of the same challenges that were being faced had existed in 1865— namely, the desire to own land, lack of employment opportunities and poor conditions of employment reared their heads again in 1938 (Palmer 2014; Bakan 1990). On reflection, the global politics of the 1900s was extremely unstable and fractious, reflected in wars, revolutions and unrest as colonial empires jostled to maintain dominance in regions they had subjugated. Meanwhile the subdued began their agitation and conflict in a bid for self-government vis-à-vis being part of colonial empires,  seeking to retain their existing control and extractive dominance as well as to enlarge it. The British Empire from the 1900s until the beginning of WWI in 1914, had been involved in 33 wars, revolts or conflicts, some of them simultaneously within the regions they had colonial jurisdiction over (see Table  2.1). The First Balkan War of 1912, the Albanian Revolution of 1912, the Russian Revolution of 1917 and the Great Depression of 1929 Table 2.1  Conflict with colonials: the British Empire (1900–1918) Year

#

1900–1903

13

1903 1903–1904 1904 1906 1900–1905 1900–1920 1907–1908 1907–1918 1908

1 2 2 2 1 1 1 1 4

1911 1913 1914 1914–1918

1 2 1 1

Combatants Ashanti empire, Sudan revolt, Somali dervish state, Malaysia, Kahzud, rebels, British raj, Aro confederacy Nigeria, Shona-South Africa, Sudanese rebels, Venezuela, Kabul Khel rebels, Mahsud rebels, Waziri Mapondera rebellion Kano emirate Qing dynasty, Sokoto caliphate Mahsud, Sudanese rebels Sokoto uprising, Bambatha rebellion/Zulu Matt Salleh rebellion Somaliland campaign British raj Zakka Khel clan Asir rebellion—Supported Wad Hubaba revolt (neo-Madhist rebels), British raj—Bazar Valley, Mohmand expedition Kenya revolt, British raj Ibadi imamate Tebellion, Ovango Dande Kenya revolt World war I

Source: Compiled by author using information from Wikipedia: https://en.wikipedia.org/wiki/List_of_wars:_1900%E2%80%931944

32 

C. CLARKE AND C. NELSON

signalled that the global political economy was in turmoil, resulting in the collapse of trading relations,  impacting supply and demand and income  earnings. The latter event had global implications, where there was limited capacity to spend and no one was buying sugar and bananas. In the 1930s Jamaica was an economy totally dependent upon exports and imports primarily for food, energy, medicine and tools and in order to do so, it had to sell its sugar and bananas. World War I with its devastation and impact thereafter of autarky in international trade, stymied growth worldwide, with a reduction in the global trade in sugar and bananas to obtain basic resources needed. The global political economy became tempestuous, skewed towards an impending World War II which meant that Britain could not become preoccupied with addressing the needs and responding to the agitation of her colonial possessions with respect to their economic plight and depressing local and economic conditions. The international political climate and the impending start of World War II, was the precise moment when Britain, pressured by the demands of administrating and maintaining her empire, international commitments and geopolitical obligations could no longer continue to ignore her agitating colonies who were articulating dissatisfaction with local economic conditions. In the previous hundred years prior to independence, there had been scant investments in infrastructure in Jamaica. Prior to that, investments were focused on the maintenance of the plantation economy and the needs of the planter class. The view was that it was the colonial system that generated the suffering of the newly freed persons along with the significantly low levels of investment in the infrastructure that would be critical to complement private industry and activity. The lack of investments and poor/rudimentary public and social infrastructure would have; 1. stymied the ability of the peasantry to enjoy widespread profitability from engaging in agricultural activity; 2. represented that there were challenges and signals from the European Union that preferential trade and pricing arrangements could no longer be guaranteed; 3. triggered  the  impetus for rural/urban population drifts to arise as a means of economic survival for dislocated workers  with little understanding of the real likelihood of better outcomes; and 4. driven the rising rates of rural poverty and subsistence farming.

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

33

According to Eisner (1961) the Jamaican economy experienced an annual average economic growth rate from 1830 to 1930, and average annual production increases of under 1% indicative of the relationship between output and employment. Considering that 70% of the labour force was linked to the agriculture sector, the limiting of access to suitable land for that purpose, had several repercussions. The proportion of Jamaicans who worked on the land fell steadily from 67.5% in 1881 to some 54% in 1930 (Eisner 1961) due to lack of access to land. One causal factor was the change in the composition of agricultural crops grown, resulting in the reduction of sugar output accompanying the shift to the production of bananas, the latter requiring less labour to produce. Employment in the banana industry increased from 4000 in 1891 to 23,000 in 1911. Another was the shift in the composition of the labour force employed in domestic services which was commensurate with the decline in agricultural employment. There was also the view that population growth ‘had outstripped cultivable land’ (Eisner 1961, p.  164), with surplus labour being absorbed into domestic services given that employment in manufacturing, construction and industry remained constant. The increase in agricultural unemployment had implications for food security and Jamaica’s inability to feed itself, reflected in the reliance upon imports, especially in the context of the absence of manufacturing activities to absorb the surplus labour. The deficit in terms of government spending on the social sector— namely education, health, as well as infrastructural development, had been identified from the 1880s, which was not addressed even years later in 1930, this time further compounded by a lack of raw materials and power resources. Immigration was deemed one of the easiest responses for some and there was large scale immigration to Panama, Costa Rica, Cuba and the United Kingdom as a consequence. This situation was not unique to Jamaica, but of the Caribbean region as in 1961, 10% of the inhabitants of St Kitts immigrated in one single year (Eisner 1961). Subsequent legislation by the Britain and other recipient countries served to cap this flow.

The ‘Movement’ The riots of 1938 compelled the British Parliament to take stock and assess the causal factors contributing to its occurrence and also  confront the conditions in the West Indies that could no longer be ignored.

34 

C. CLARKE AND C. NELSON

That the disturbances struck a chord in Britain was further  demonstrated by the organization of a Commission, the Moyne Commission of 1938–1939, to examine the ‘problem of the West Indies’ and make recommendations on how the problems could be resolved. In order that a full appreciation of the significance of the disturbances may be appreciated, it becomes obligatory to put the ‘movement’ into some context so that its role in the emergence of the Jamaican state can be demonstrated. Furthermore, so that the full significance of the Moyne Commission can also be contextualized (see Chap. 3) and the origins of the characteristics of the state can be exhibited. The disturbances, although not primarily geared towards national independence, resulted in these concerns being placed at the forefront of discussions, and it resulted in dialogue on the matter, as well as creating a groundswell of grassroots support, engendering the intelligentsia to eventually further such a demand on Britain. Mechanisms were put in place that enabled the mobilization of support locally as well as the timing of it, complemented by various contexts, locally and overseas that gave impetus to the movement. The stage was created and circumstances configured for the emergence of key actors that facilitated independence to be entertained and for measures to enable it to become a reality.

Bibliography Bakan, A. B. (1990). Ideology and class conflict in Jamaica: The politics of rebellion. Montreal/Kingston: McGill-Queen’s Press-MQUP. Burnard, T., Monteith, K. E., & Richards, G. (2002). Jamaica in slavery and freedom: History, heritage and culture. Kingston: University of the West Indies Press. Crichlow, M. A. (2005). Negotiating Caribbean freedom: Peasants and the state in development. Lanham: Lexington Books. Daniel, G. T. (1957). Labour and nationalism in the British Caribbean. The Annals of the American Academy of Political and Social Science, 310(1), 162–171. Eisner, G. (1961). Jamaica, 1830–1930: A study in economic growth. Manchester: Manchester University Press. Higman, B.W. (2011). The Price of Emancipation: Slave-Ownership, Compensation and British Society at the End of Slavery. Slavery & Abolition, 32(2), pp.321–323. Published online 20 June, 2011. https://doi.org/10.108 0/0144039X.2011.568250 Mackie, L. (1987). The great Marcus Garvey. London: Hansib Publishing (Caribbean), Limited.

2  JAMAICA ‘COMIN’ IN FROM DE COLD’ 

35

Mordecai, M., & Mordecai, P. (2001). Culture and customs of Jamaica. London: Greenwood Publishing Group. Palmer, C. A. (2014). Freedom’s children: The 1938 labour rebellion and the birth of modern Jamaica. Chapel Hill: UNC Press Books.

CHAPTER 3

The Moyne Commission

Introduction After more 300  years of human enslavement with its attendant institutional and societal vestiges, the Jamaican population found itself hopeful for much brighter fortunes on August 1, 1837 on the granting of emancipation. It was envisaged that the newly freed persons would engage in a process that would see them continue to support the plantation-oriented agricultural sector whilst developing their own income-generating activities. Lands for settlement were carved out as a means of empowerment, and it was almost expected that no investments or supplementary resources would be needed to develop this extremely nascent form of agriculture as well as the infrastructure, networks and markets to get any produce to. The reality of the situation was, of course, far different from a picture-­ perfect ending. There were difficulties associated with eking out a living on the often-fringe lands located on hillsides or deep valleys that needed significant drainage and terracing before any planting could be successfully done. Further, these workers would have been more familiar with flatter lands for sugar planting and lacked any knowledge of mechanization and tools that would make their work a little smoother. Irrigation, fertilizer and other inputs would now need to be provided by the individual farmer, and many were unable to cope with the transition from being a worker to a business owner and investor. The challenges faced by the freedmen in reorienting their production towards other crops and animal husbandry and the importance of © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_3

37

38 

C. CLARKE AND C. NELSON

developing an economic base for their households, fuelled a prolonged wave of rural to urban drifts of the population to the capital city—Kingston. The difficulty of smallholding farming alongside the introduction of indentured servants from China and India as a means of extending the viability of the plantation-centred agricultural system, also contributed to the emergence of a drift from rural to urban areas. The poor infrastructure and unavailability or inadequacy of available housing and jobs made it very difficult for these newcomers to integrate into the Kingston society and economy. For those who were able to find work, they found the working conditions untenable as there were no standards for pay, leave, conditions of employment as well as the other ancillary aspects of work. Simultaneously, as the few remaining British plantation owners wound up their businesses in Jamaica, so did the comparatively skeletal public service originally designed to cater to their needs. Investment in infrastructure over the hundred years after emancipation was limited and fell dramatically during the various wars in the early part of the twentieth century. The disinterest of the English in Jamaica as they transitioned out of sugar and into other sectors led to serious underinvestment in the local infrastructure such as water, roads, housing and health care, which was critical for individual and household welfare and well as complementary to the development of any kind of private sector activity.

Lord Moyne’s Discoveries The British population and Parliament agreed that they could no longer afford to ignore the occurrences in the West Indies, leading to the West India Royal Commission being dispatched by an Act of the British Parliament led by Sir Walter Edward Guinness, Lord Moyne to Jamaica, August 5, 1938. Highlights of the Report note: The Report was described as ‘a scathing indictment of British imperialism’ (Mordecai and Mordecai 2001, 26) which found that consecutive administrations ‘through their myopic policies and prejudices, had brought the troubles upon themselves.’ (Mordecai and Mordecai 2001, 26) The Commission argued that the real problem was to be found in the fact the people were insisting on improvements in their material conditions at that very time when the international economy could hardly promise the maintenance of current conditions.

3  THE MOYNE COMMISSION 

39

Furthermore, social services were woefully inadequate to meet the needs of the population resulting from defective policies and a serious lack of funding available to those with the responsibility to address these issues. (West India Royal 1945) In the education sector, the commissioners made the argument that there wasn’t only a need for more teachers but also what it described as ‘better trained teachers, more and better school accommodation and equipment, and curricula more closely related to the life and experience of the residents of the West Indies.’ (West India Royal 1945, 424) Health care was described by the Report in a similar tone and housing was said to be in a deplorable condition with sanitation that was ‘primitive in the extreme.’ (Moyne Commission 1945) To address these and the many other issues that the Report brought to the fore, the Commission recommended the establishment of a West Indian Development Fund capitalized by £1 million annually for not less than 20 years to finance social programmes. (West India Royal Commission 1945; see also Palmer 2014) Additionally, it raised issues such as land reform, promotion of trade unionism, the appointment of women to political offices, the creation of a federation, but did not support complete self-government on the basis of universal suffrage.

The Moyne Commission found chronic unemployment, lack of school places for the entire cohort, shortage of trained teachers, inadequate housing and increased levels of malnutrition across the population. Population pressures in rural areas were disproportionate with the ability of the rural economy to provide sustainable economic opportunities which led to a period of continuous population drift into the urban areas. As a result, many farmers were forced to maintain their subsistence-level operations whilst attempting to transition their children out of farming and into goods producing sectors of the economy. The urban city centres were themselves suffering from limited infrastructure particularly housing stock; in addition, the job market was limited and required relatively high level of skills that the migrating population did not possess. In some areas, skilled and semi-skilled workers were imported to Jamaica from China, India and parts of the Middle East. The unemployed, under-represented and poor Jamaicans did not view  positively this importation of workers before the local population had time to upskill, which resulted in some degree of racial tension and animosity as

40 

C. CLARKE AND C. NELSON

these higher-skilled workers were able to command a better standard of living than the typical Jamaican. World Wars I and II ate into British wealth, which was mainly funded by the largesse earned from plantations in the West and East Indies, which provided raw material for the second wave of the Industrial Revolution. The bombing of the metropoles and therefore the need to rebuild them meant that any significant needs in the colonies were not likely to be met. Essentially, World Wars I and II had eroded the financial and physical capital of Britain through the monetary and human effort to sustain these wars as well as restore  destroyed physical infrastructure  and compensate for  the  loss of human capital. As a result, the British government was unable to mount a response and the issues of the colonies, such as Jamaica, became a secondary concern for  British citizens in the context of their own suffering and destitution. The Moyne Commission’s Report, therefore, provided the monarchy with a justifiable platform to engage in discussions with the emerging leaders in Jamaica about Independence. In 1945, a statement was issued regarding the action taken on the recommendations made by the Moyne Commission, the Secretary of State for the Colonies to Parliament reported that the war effort had fully compromised the ability of the British government to implement much of the listed recommendations (Parliament, 1945). The Report indicated that the prescribed investments in housing and health facilities, in particular, were unattended due to the demands on human and other resources that compromised the British government’s colonial office from providing the type of support required for their implementation. The Report was quick to juxtapose the lack of achievements against the clear policy intentions to address these issues as documented in Reports of the Comptroller for Development and Welfare for the periods 1940–1942 and 1942–1944, which the Secretary of State Report indicated exceeded the prescriptions of Lord Moyne. The Report provides an update to the Crown about the progress made in the West Indies in response to the issues (Table 3.1). The form of the public sector in the Jamaican colony also began to change as, prior to abolition, it was oriented towards (a) the production, packaging and exportation of sugar to England, (b) suppression of the enslaved population and (c) maintenance of services for Englishmen in Jamaica. In the post-emancipation world, there was a recognized need to improve all aspects of social and economic life. These improvements required a totally different ethos, mindset and approach in the delivery of

3  THE MOYNE COMMISSION 

41

Table 3.1  Update on implementation of Moyne Commission recommendations 1–6 Recommendation from the Moyne Commission

Implementation status

Recommendation 1 Large expenditure on social services and development through a specially formed organization funded by a west Indian welfare fund based on a £1 m transfer from the Exchequer annually. Funds to be used to improve education, health, provision of housing and transformation of slums, establishment of departments of labour, facilities for social welfare and land settlements.

July 17, 1940 colonial development and welfare act passed providing £5 m from the Exchequer for expenditure by the colonial empire for development and welfare work however no funds were specifically ring-fenced for the West Indies colonies though they did receive some funds. Whilst Lord Moyne had recommended that the intervention for the West Indies last for twenty years, the original act passed by the British parliament only contemplated a ten-year horizon. A subsequent act passed in 1945 extended the length of the original a further five years providing for a total £120 m of expenditure. Recommendation 2 Sir Frank Stockdale was appointed as The special organization should be Comptroller for Development and Welfare in located in the West Indies but separately the West Indies in July 1940. His Excellency run from the governments and the was given latitude in terms of the details of social conditions continuously reviewed particular interventions as well as fractional by the comptroller of the west Indian amounts to be used at his discretion for: minor welfare fund—Who would have access amenities, training of subordinate personnel in to the secretary of state for the the West Indies, provision of technical colonies—That would also advise the assistance to colonial governments and colonial administrations as well as specialized training overseas of West Indians. submit reports annually. That would Whilst the colonial governments were in charge indicate progress and areas requiring of administration, the comptroller and his attention. office continuously toured the colonies in the West Indies to inspect progress on the programmes being implemented. Reports were prepared every two years, 1943 for the period 1940–1942 and 1944 for the years 1943 and 1944. (continued)

42 

C. CLARKE AND C. NELSON

Table 3.1 (continued) Recommendation from the Moyne Commission

Implementation status

Recommendation 3 The comptroller was to have absolute discretion regarding the operations that were to be undertaken to improve the social development of the territories under consideration. Delays due to unnecessary bureaucratic requirements were not to be imposed at the expense of the clearly needed social and economic improvements.

Comptroller authorized to make grants to colonies from the omnibus grants approved by the secretary of state and some had been made relating to school construction and procurement of medical supplies and other needs in the windward and leeward islands. He was also authorized to approve variations to projects previously approved by the secretary of state providing that variation did not contravene a principle or scope variation of the project. A total of 16 experts in the recommended areas were available to the comptroller to implement his mandate in various capacities and under a range of timer periods and conditions of appointment.

Recommendation 4 The comptrollers team was to include from the outset experts in a wide range of areas including education, finance, health, housing, income tax, labour and social welfare, civil engineering and statistics. Consultation with the inspector-general of agriculture was also recommended. Recommendation 5 The administrative expenses for the new organization was to be borne by the Imperial Exchequer and the colonies were to make their income tax rates comparable to those of pre-war Britain so as to avoid placing additional burdens on indirect taxation. Recommendation 6 Provision of machinery and funds to accomplish the goals of social policy.

The expenses required to maintain the Comptroller’s office were not paid from the allocations specified in the act for assistance to the colonies. Income tax rates were increased substantially since 1939 in nearly all west Indian colonies.

As indicated above.

Source: Moyne et al. (1945)

social services as, increasingly, they would now have to be designed, developed and implemented in a manner that addressed the state of the Jamaican population. The public sector would therefore have to be repopulated and more West Indians would have to be trained in order to expand the skill set and labour force available to administer the various programmes.

3  THE MOYNE COMMISSION 

43

Sectoral Review The Moyne Commission made specific recommendations in the sectoral areas such as education and health (see Table 3.2). Table 3.2  Update on implementation of recommendations regarding education by the Moyne Commission Recommendation from the Moyne Commission

Implementation status

Recommendation 7a Advocated for the expansion of teacher training through the establishment of appropriate facilities in the larger colonies which would facilitate training for students from the smaller colonies.

This recommendation was unable to be completed fully due to the resource constraints required to simultaneously expand education opportunities for the children themselves in reasonable class sizes. The first subsequent recommendation was that active pupil-teachers reduce the time they teach students to half-day and then themselves receive training in the latter half of the day. The report warned that those pupil teachers who do not opt to take further training would not be retained after the age of 19 as they would be better suited to do so at age 15. Additionally, intending teachers aged 15–18 would be provided with three-year secondary courses and apprenticeships would be provided to good teachers who participate in the half-day option as well as who perform well in the three-year secondary courses. Master teachers were also to be trained in a Teacher’s institute that would facilitate demonstration and practice as well as provide accommodation for teachers with their families. Finally, supervisors would also be provided from teacher training, pupil-teachers as well as courses offered in this regard during vacation periods. These points were discussed between the comptroller and the secretary of state. (continued)

44 

C. CLARKE AND C. NELSON

Table 3.2 (continued) Recommendation from the Moyne Commission

Implementation status

Recommendation 7b Indicated that attention needed to be placed on the provision of school accommodation, ensuring appropriate design, balance between urban and rural areas, integrating where possible domestically available materials and the provision of play space, water and sanitary facilities.

There had been approval of grants for £1.25 m with the proviso that the building design must be consistent with what the territories are able to maintain themselves. However, the building process was said to be negatively impacted by the consumption of raw materials due to the war. These supplies did not arrive until 1943 and textbooks and stationery were provided free.

Recommendation 7c Provision of additional or replacement equipment including textbooks and stationery free as well as items for physical training. Recommendation 7d Curriculum reform was recommended for relevance and appropriateness Vis-à-Vis the environment in which the children operate. Emphasis was placed on the need to ensure that students developed clear and connected speech, hygiene and diet; manual and agricultural teaching for boys; and domestic training and child welfare for girls. There was a thrust for the establishment of more junior secondary schools to provide training in practical subjects and these junior schools should be provided with the same equipment, staff and accommodation as academic secondary schools. Recommendation 7e Explore the extent to which educational films could be produced and collated in a library of films. This effort would be supported by an expert who would support the production of simple films on local subjects. Recommendation 7f Expansion of wireless transmitters to enable schools to benefit, Recommendation 7 g Schools should be the Centre of adult education and learning particularly for agriculture and hygiene and should serve as lending libraries,

Generally the main move here was the reorganization of the previous elementary school system and the dropping of the term junior secondary for the senior school that would provide a minimum level of four-year education that would be the basis of expanding secondary education across the West Indies. The 4H club movement was also to be extended as a way to expand both practical and pre-vocational training to students.

Action in this area was constrained by the unavailability of appropriate equipment nevertheless there was indication that the British Council would have arranged for an expert in producing documentaries to visit. Accepted recommendation but implementation hampered by war efforts, These classes were established and the British Council assumed responsibility for the establishment of the lending library system. (continued)

3  THE MOYNE COMMISSION 

45

Table 3.2 (continued) Recommendation from the Moyne Commission

Implementation status

Recommendation 7 h Education policy should be supervised by a specific officer in each colony and should be officially part of the deliberations of the standing Committee for Social Welfare. Advisory educational boards should also set about enlightening government and public opinion. Recommendation 7i Restriction of primary school attendance age to between 6 and 12 providing that junior secondary schools are established for those aged 12–15 as well as nursery schools for those under six years of age. Recommendation 7j Whilst the literary curriculum was adjudged to be equally suitable for girls and boys, it was recommended that appropriate vocational training in domestic science for example should begin early for girls. At the secondary level, it was recommended that girls be eligible to compete for scholarships. Recommendation 7 k Free meals and appropriate clothes for poor children should be provided where a child is determined to need it based on their economic circumstances. Where possible these items could be made at the schools.

Supervision of education policy by one officer was implemented throughout the region however more required it being established as a matter under mention for the standing committee.

There was varied pace of instituting this recommendation as the main concern was the provision of the full range of educational options in each territory given what existed prior. There was active exploration of the extent to which this could be implemented and there was and the relevant adviser had been appointed to address the matter of vocational training and education.

This provision was evident across the West Indies however it was indicated that it was not universal. It was not yet determined how such a provision that would be nutritious, consistent with food provision and the availability of finance would be done. This was being investigated. This recommendation regarding control by government where government funds the school was not well accepted as it has been quite controversial.

Recommendation 7 l Where schools are managed by denominations where salaries are paid by the government, the government was to have complete control over the school administered. Those wholly funded should be wholly controlled by the government. Religious instruction should continue in schools as at present. Recommendation 7 m This was done in 1940 and the expert The comptroller should have access to an is supported by an assistant. educational expert on his staff Source: Moyne et al. (1945)

46 

C. CLARKE AND C. NELSON

Education With respect to Jamaica under Recommendation 7a, the Comptroller indicated that in the five years since the recommendations from the Commission were being implemented it was not possible to train all teachers in Jamaica at an appropriate training institution due to the scale of the reorganization and expanded accommodations that would have been required to do so. As far as Recommendation 7b, grants for Jamaica were approved for erecting schools and teacher’s cottages with the use of local materials and due consideration was made to the development of playgrounds, water provision based on increased production of water. Jamaica also benefitted from the wholesale purchases of readers and exercise books and the appointment of two Supervisors of Physical Training along with appropriately designed equipment designed by the Department of Education consistent with Recommendation 7c. The primary school curriculum is reported to have been totally revised with implementation beginning in 1939 and included instruction in hygiene, domestic science, manual and agricultural grooming, and further child welfare instruction was to be connected with the play areas in the new senior schools. Supplementing this was the development of history and other readers that were to be compiled locally. Regarding the production of local films as per Recommendation 7f, Jamaica instituted a committee to put in place plans for this to be done regularly in the form of both motion pictures and slides with the first being slides on the Girls’ Practical Training Centre. As far as the recommendations regarding adult literacy, Jamaica instituted a campaign that was targeted as teaching as many illiterate adults to read and write in a programme that was coordinated between the Education Department and managers of primary schools through an Adult Education Committee. At the time of the Report, the recommendation regarding adjustment of the age limits in each stage of education was only being considered given that it would necessitate a complete restructuring of the education system despite the notation that two play centres were already in operation. The role, relevance and necessity of vocational training was being considered under the overall review of the Jamaican education system and it was reported that boys and girls received vocational training at the same age.

3  THE MOYNE COMMISSION 

47

With respect to the concern that schools were not feeding and clothing their students, Jamaica seemed to have a relatively developed system with two central canteens and 70 school-based canteens in operation and consideration was being made of the possibility of providing a midday meal for pupils. Clothing was being received from the United States of America and being remade in sewing class which were distributed to more needy students. Trinidad had been offering free midday meals to its students in Port of Spain and San Fernando by voluntary societies who were paid a fixed rate per meal by the government. In addition, there was a central kitchen providing meals for 270 children in San Juan. Health Outreach by head teachers distributed meals for needy children with resources from the government. Milk was also provided daily in Port of Spain and St Joseph to 2100 under-nourished children and work was being done to provide further nourishment through powdered milk and local cocoa to needy children in primary schools (Table 3.3). There were an equally wide range of recommendations as far as addressing the health concerns of the population. The first major area was in relation to improving public health through: the appointment of a medical adviser to provide guidance in relation to the development of health policies and ensure harmony between all medical services and to coordinate all activities relating to health; both of these recommendations were implemented in 1940. Recommendation 8b attempted to address the number of health personnel available to work in the sector with a focus on improving the career prospects on offer in order to increase the number of specialists available to provide both preventative and curative services to the population. A scholarship scheme allowed forty students to pursue medical study in Great Britain on condition that they would serve a bond of five years across the West Indies. There were proposals to implement a West Indian Nurses Board that was viewed as a step in the development of a nursing service in the region as nurses were also part of the training schemes in London. Recommendation 8c reflects a need to centralize medical care in order to optimize the ability to more efficiently care for the sick as well as to provide training for medical staff. Under this centralized system, hospitals

48 

C. CLARKE AND C. NELSON

Table 3.3  Update on implementation of recommendations regarding health by the Moyne Commission Recommendation from the Moyne Commission

Implementation status

Recommendation 8a Appointment of a medical adviser to the comptroller of the west Indian welfare fund to advise on health policies for the West Indies; the unification of medical services and coordination of other health activities. Recommendation 8b Medical services across the British West Indies were to be unified in an effort to improve career options and trajectories for persons enabling them to operate more efficiently in their attempt to prevent and cure diseases as well as fostering a comprehensive view of the health problems facing the region.

Appointment of adviser was done in 1940. Visits were completed to all the colonies and health programmes were formulated for each with the input of each government.

Recommendation 8c Centralization of certain medial institutions across the countries to enable greater efficiency and economy in dispensing medical services and facilitate training facilities for all classes of medical personnel. This would include the need to provide adequate ambulance and stretcher services as well as in relation to the provision of institutions to deal with mental health and leprosy. Recommendation from the Moyne commission Recommendation 8d Create at least one School of Hygiene to facilitate research and teaching in the area of preventive medicine and train sanitary inspectors and health visitors.

Unification was being considered but not yet implemented as priority was given to reorganizing and developing medical services in other fields. This was negatively impacted by the shortage of doctors which influenced the dispatch of forty students on scholarship with a five-year bond to be served upon completion. A west Indian nurses board was also proposed and was under review for practicability. Nursing students currently in London for training. Work had focused on addressing public health concerns whilst proposals were submitted to the medical adviser with respect to improving the state of each colony’s central medical hospital to enhance treatment of patients and training of medical personnel. Ambulance and other medical equipment however, were not procured, given the needs of war time.

Implementation status A public health training Centre was established in Jamaica through the assistance of the colonial development and welfare act and was staffed by a director assigned by the Rockefeller Foundation as well as full- and part-time instructors. It was anticipated that this would become an institution that served the entire West Indies. (continued)

3  THE MOYNE COMMISSION 

49

Table 3.3 (continued) Recommendation from the Moyne Commission

Implementation status

Recommendation 8e The formulation of long-term health policies need to be jointly developed between all departments within the colonies including labour, agriculture, education and social welfare. Recommendation 8f Partial reorganization of the medical services to ensure that there is a preventive outlook, provision of well-trained auxiliary staff such as sanitary inspectors and health visitors, and provision of better rural and urban facilities for medical treatment was the focus of this recommendation. The extension of contributory health insurance schemes based on carefully selected membership was to be studied by the medical adviser. Recommendation 8 g Immediate progress regarding preventive measures through improvements in: Housing, general sanitation, control of malarial areas, development of maternity and child welfare work, venereal disease clinics, school medical services and better health education. Recommendation 8 h Greater attention on availability of more balanced diet for general population with closer collaboration between departments of education, agriculture and public health. Recommendation 8i Nursing education should receive increased attention through the appointment of sister tutors and centralization of training institutions.

Consultations were widely held as suggested for the formulation of health policy with reference to hospital and dispensary services, water supplies, malaria control, nutrition and health education, among others.

Source: Moyne et al. (1945)

Focus on the preventive outlook was emphasized and supported by the training of eight relevant personnel for this purpose. Well-trained auxiliary staff, centralization of medical institutions and better facilities in urban and rural areas were also addressed. For Jamaica there had been a steady increase in the number of available auxiliary staff since the Commission’s report, which was, however, negatively impacted by the recruitment efforts for the armed forces and shortage of suitable candidates in other areas of the medical services. See Table 3.4 for progress regarding housing. Progress was made in all areas but was expected to increase as trained personnel became more experienced.

There was an increase in the provision of locally grown food to support the nutrition goals and school meals were also provided to some elementary school students.

The central general hospitals across the region were allocated sister tutors and there was to be further training of west Indian women in London County council hospital. At the date of writing there was the expectation that a sister tutor would be appointed as the Kingston public general hospital and the establishment of nurses training Centre in Kingston.

50 

C. CLARKE AND C. NELSON

Table 3.4  Update on implementation of recommendations regarding housing by the Moyne Commission Recommendation from the Moyne Commission

Implementation status

Recommendation 9a Powers should be developed to control where new housing is sited and consideration must be given to health, sanitation and water supply as well as the balance between urban and rural housing. Recommendation 9b For urban housing, where bad slum housing is present and to be clear no compensation should be paid except in cases of proved extreme hardship and then only under rigid conditions as prescribed by United Kingdom law except where that law is inappropriate. Recommendation 9c For rural housing the estates should provide land for housing, vegetable plots, adequate terms of tenure and housing plans should be approved by government at low interest rates with rent charged based on increased wages. Surveys of estate housing and peasant housing to be done with a view towards demolishing units if either the peasant or government can afford to replace or rebuild the unit.

The legislative process had been initiated to facilitate compulsory land acquisition, town and country planning and housing and slum clearance with consideration for compensation. Staff needs delayed its implementation. See implementation of recommendation 9a.

The comptroller indicated that its housing policy was to provide non-tied housing for workers on the estate either free or on long lease or sale. In addition, the labourer would be assisted by the colonial government to provide a house for himself. Low interest rate loans would be provided to estate owners to enable them to repair housing since they would have labour ready to effect the repairs. Specifically for Jamaica, small progress was made regarding estate housing and it was anticipated that a comprehensive plan for a scheme would be granted assistance under the colonial development and welfare act. Surveys of estate and peasant housing was being down to identify needs and make plans for re-housing were necessary. Recommendation 9d Appointment of persons as specified Appointment of a temporary expert to organize were made as well as the appointment an enquiry into the methods of building and of assistant architects to address the types of housing, a permanent advisory officer issues outlined. with wide knowledge of town planning and an officer in charge of the actual building of large-scale projects in the United Kingdom. Source: Moyne et al. (1945)

3  THE MOYNE COMMISSION 

51

in remote areas would be used as a collecting point from which ambulances would then be used to dispatch patients to the major hospitals. Whilst efforts were made in this regard, ambulances and stretchers were in short supply due to the war and therefore the extent to which the system was able to be centralized was limited. In response to the fourth recommendation regarding the establishment of schools of hygiene in the region, a training centre for public health nurses and inspectors was established in Jamaica in 1943. Another recommendation focused on the need for the development of health policy to be done in collaboration with the education, labour and agriculture departments. This collaboration was widely implemented and allowed each island to identify special areas of concern and develop policy to address them. The sixth recommendation surrounded the need to engender a preventive outlook with respect to health by the medical services as well as an expansion of the allied health services that would work in conjunction with the centralized service approach. Supplementing expanded treatment options was the need to develop a contributory health insurance scheme. In this regard Jamaica appears to have benefitted from a steady increase in auxiliary staff which was, however, negatively impacted by Implementation successfully focused attention on measures to prevent disease through the training of persons to support this process inclusive of various levels of medical staff. Efforts at developing an appropriate health insurance option were stymied by the inadequacy of medical staff to facilitate use of such a scheme by patients as well as the actuarial finding that despite the likely membership, the contributions would exceed the benefits to the contributor. The assessment of the sanitation and water situation indicated that Jamaica had anticipated assistance to strengthen the Central Housing Authority to expand its rural and urban housing. Whilst there was progress in the area of latrine and sewer development there was still a need to improve the production and distribution of water supplies and the authorities prepared to apply for support to install pipes to transport water. Scoping of malaria was proceeding with a view to developing a plan for its control. Eighty-five clinics were established to support maternity and child welfare interventions as well as the control of venereal disease. Medical services for schools were only available in Kingston and St Andrew. Regarding Recommendation 8  h with respect to balanced nutrition amongst the

52 

C. CLARKE AND C. NELSON

population, despite the fact that the war effort had impacted substantive attention in this regard, it was noted that the 4H clubs were being expanded to support efforts at food production. Housing The area of poor housing stock and complementary infrastructure was a central factor in the 1938 riots leading to the deployment of the Moyne Commission. The approach since Moyne was focused on the acquisition of land to help those persons who were not based on the estates but this help would only be given to those who did not have the means to improve their housing quality themselves. For the housing on the estates, a loan scheme was being developed through the Colonial Development and Welfare Act. There was a response to the need for architects and other building experts to address the issue of appropriate building types and those with experience in building projects on a large scale and appointments were made. Underpinning this was the implementation of the legislative framework to support government action in land acquisition, town planning and the clearance of slums was being implemented. Additional emphases were placed in developing a stronger system of social welfare through the establishment of Social Welfare Committee alongside staffing by a social welfare expert in the Comptroller’s office. In addition, Jamaica received assistance through the Jamaica Welfare Limited from the Colonial Development and Welfare Act. Welfare workers in the West Indies were also trained with care being taken to support the work of the existing organizations. Jamaica hosted attendees from almost every colony in training courses for social welfare in 1943 and 1944, and three West Indians received scholarships to study social sciences at the London School of Economics. Women received special attention in the recommendations by the Moyne Commission in the form of enabling them to be eligible for appointment to all Boards, local authorities, as magistrates and jurors and encouragement that even where women were not duly nominated they should be considered for membership equally with men and they should be treated equally in the civil services.

3  THE MOYNE COMMISSION 

53

Industry As far as economic challenges, the update reported the vast difference in the economic conditions facing the West Indies between the nineteenth and the twentieth century, namely that their increased production of primary products had contributed along with that of other developing countries to excess supply globally and therefore price that were lower than the equilibrium price. The conditions were thought to be persistent as they were due to the fact that agricultural techniques globally have improved and there has been more rapid growth in tropical countries than in their principal markets. in industrial countries. It is thought that the role played by the increased population in the colonies was important in explaining the social and economic woes of the region. These links, it was argued, needed to be thoroughly explained across the region in an attempt to reduce this impact (Table 3.5). The Report recommended that in order to absorb this additional labour force created by the expanding population, that the agricultural system be expanded using mixed farming to produce more essential foodstuff as well as doing whatever possible to expand exports. Whilst they have looked at the issues broadly, specific recommendations were only made for the sugar industry. What is clear in this Report is the very terse attention given to economic matters, which had a total of five recommendations in comparison to the over forty that were made on various social issues. The content of the economic issues surrounded the correction of population dynamics that it was felt caused economic challenges of the country. It was felt that the reduction in the economic outcomes were driven by the relative population growth in the tropics versus that in the markets where they sold their products, the latter being negatively impacted by the demand for men to support the war effort. The first recommendation was that the additional population needed to be absorbed into the production process through an expansion and intensification of efforts within the agricultural sector that would then focus on expanding the production of local foodstuff and thereby, generate the basis on which to expand the exportation of agricultural output. The sugar industry which was the most predominant sector at the time needed to be revitalized in terms of the volume of production and the issue of the price at which it was being sold. Despite the increase in production during the period 1932–1937, the recently implemented International Sugar Agreement now

54 

C. CLARKE AND C. NELSON

Table 3.5  Update on implementation of recommendations regarding labour and trade unions by the Moyne Commission Recommendation from the Moyne Commission

Implementation status

Recommendation 10a Enactment of laws to protect unions from actions for damages consequent on strikes; legislation of peaceful picketing, with pickets being allowed access to a reasonable number of workers both at factory gates and at their homes; compulsory registration of trade unions and audit of their funds.

The legislation regarding trade unionism was in operation in all colonies with a view to ensure it prescribed at a minimum the recommendations of the commission where it did not previously do so. Recommendation regarding the auditing of trade union accounts was not then in operation. A committee on industrial relations in Jamaica submitted a report that was being considered had also recommended this audit and that it be done free of charge. A labour department was established in 1939 and its officers had been assisting in settling disputes relating to wages and conditions of employment. There was also a labour advisory board that is expected to be reconstituted following the conclusions of work done by the industrial relations committee. Done.

Recommendation 10b Until trade unions are able to play a decisive role in the regulation of wages, an advisory council should be developed with an impartial chairman.

Recommendation 10c Staff if comptroller must include a labour adviser who liaises closely with labour offices and departments across the west Indian colonies. Recommendation 10d Labour department to be established at the colonial office along with a labour advisory committee with expert knowledge of labour and colonial questions. Recommendation 10e Wages boards to be created where they do not exist supported by the relevant legislation in order for the colony to participate in assistance to the sugar industry including allocation of benefits declared by the boards. Any issues arising in industries not covered by the boards are to be handled by the staff of the labour departments. It was recommended that an industrial court be established for the West Indies as a whole.

Done.

The concept of the court was discussed at a labour conference in the region and the consensus was that the labour adviser could continue to play this role. An advisory board for the sugar industry was established and set minimum rates in Jamaica consistent with the prescriptions under the minimum wage law of 1938. The labour department and minimum wage boards handled any other disputes or differences between employers and employees.

(continued)

3  THE MOYNE COMMISSION 

55

Table 3.5 (continued) Recommendation from the Moyne Commission Recommendation 10f Governments in the West Indies should set an example by forming Whitley councils for civil services including staff and teachers.

Implementation status

This was agreed to by governments in the region and the councils were adapted to the local circumstance. Whitley councils for the civil service were established in Jamaica, British Guiana, the Leeward Islands and Trinidad although in Trinidad teacher’s organizations were recognized as bargaining agencies. Recommendation 10 g Up to the report date, Trinidad was the only Governments of the larger countries one that had explored this issue. Other should attempt to establish some form of colonies were to explore options. unemployment insurance in employment arrangements that provide regular employment. Recommendation 10 h The report is sanguine that the existing More detailed factory inspections were to factory inspection and cooperation between be undertaken in order to assess labour department and medical authorities conformity with the public health laws were being followed in Jamaica. and regulations. Larger countries were expected to have a medical inspector seconded to the labour department and there was to be close cooperation between the medical and social welfare authorities and the labour department. Recommendation 10i Local labour experts were of the view that this Governments were advised to consider system required far more in terms of the introduction of workman’s administrative capacity than was available in compensation similar to that in operation the islands. in Ontario. Recommendation 10j Not implemented due to the state of the sugar Each government was to be invited to industry. Authorities in Jamaica referred this take early steps to impose welfare levies for consultation to the commission assessing based on sugar production to finance the state of the sugar industry. welfare schemes similar to what was done in the British mining sector. Source: Moyne et al. (1945)

56 

C. CLARKE AND C. NELSON

placed a quota on the volume of sugar that could be exported from the Colonial Empire. There was a view that there needed to be a renegotiation of the quota, However, the opposition that would emerge from the various stakeholders would not be easily countered simply on the basis of the situation in the West Indian colonies. The increases obtained prior to the war were critical to prevent the under-utilization of the factory and employed labour where sugar was being grown. Jamaica was singled out in this regard, given the pre-eminence of the industry to the Jamaican economy and therefore its importance to livelihoods overall. It was felt that the quota system was made in the pre-war period, during which conditions were more favourable for other economic efforts. In order to expand the quota for Jamaica and the other British West Indian colonies would require an additional £1.5 m of which less than two-thirds would be received by the West Indies. As war time conditions continued, the United Kingdom absorbed as much sugar as the West Indian Colonies could export through to 1944. It was felt, however, that a reorientation of agriculture on a whole towards mixed farming to include the production of essential foodstuff would be critical. Additional support would be obtained through improved marketing methods and the development of local manufacturers on an economic basis. In addition, there was a notion that despite the changing global terms upon which the agricultural products from the British West Indies were facing, if they were properly marketed then they would be better able to compete as exports as well as across the local population as production of domestic foodstuff increased. Jamaica’s marketing campaign was acknowledged as a creditable experiment in marketing and it was suggested that close contact should be maintained with the Colonial Empire Marketing Board when it was reconstituted. Associations representing the British West Indies for the promotion and sale of sugar, limes and sea island cotton participated, including various producer associations that were developed to support the marketing efforts being embarked upon. Jamaica responded to the war-time conditions with compulsory planting of essential food crops and purchased through government at guaranteed minimum prices. Factories were also established for the production of products from cassava, flour and maize, including milk and the maintenance of livestock. Marketing efforts were driven by a newly established Department of Commerce and Industry as well as to make bulk purchases of export crops on behalf of the government of countries importing these crops. Legislation was also implemented to govern the establishment and

3  THE MOYNE COMMISSION 

57

regulate the operations of producers’ associations, beginning with citrus growers, livestock farmers and possibly the nutmeg subsector. The Commission had warned governments in the West Indies from entering into speculative industrial enterprises however, there was a recommendation that cement works could be established in Jamaica in collaboration with British manufacturers, as well as local manufacturers of coconut products, of which twenty-nine thousand tons were produced and exported. The Report noted that several recommendations emanating from the West Indian Conference of 1944, highlighted various recommendations to support the concept of diversifying agricultural production through research into the nature and use of local materials that might culminate in the establishment of new industries and expansion of existing ones. In order to support this, there was a need to allow free entry of machinery to be used in the process, the granting of tax relief to permit industrial expansion and the provision of vocational and technical training to expand the availability of skilled workers. Whilst at the time of the Report, cement works had not yet been established in Jamaica, results were obtained from efforts in the production of byproducts from copra. The Report then gave updates on specific sectoral recommendations such as agriculture. Agriculture was acknowledged as the main source of income, wealth and survival in the West Indies and it required intensive use of the soil. The Commission commented that there was a need for even more intensive use in order to expand food production to support the growing population. There was a recognition of the need for the development of peasant agriculture which would be premised on progress in the types of methodologies used by peasants and the estates which had been apace. What was recommended was the need to replace the use of shifting cultivation with an organized system of what was referred to as permanent mixed farming, that is, away from large farmers growing a single crop to mixed farming depending on the local circumstances. It was acknowledged that the ability to do so would be a function of the transfer of new knowledge about the new products to be included in the mix as well as the provision of the needed resources that would enable farmers to take advantage of the conditions presented by the war effort and the associated demand for foodstuff. In addition to implementing the recommendations, the British West Indies is also reported to have benefitted from increased number of agricultural instructors to support the advisory and technical functions.

58 

C. CLARKE AND C. NELSON

A range of administrative reforms to improve the agricultural sector were also made. It was recommended that an Inspector-General of Agriculture be appointed who is not on the staff of the Comptroller but who could be consulted on matters relevant to agriculture (Recommendation 21 (a) (i)). Research and investigation was to be centralized at the Imperial College of Tropical Agriculture that would increase the availability of specialist workers centrally and reduce the need for specialists in each association except in the case of banana and sugar cane breeding (Recommendation 21 (a) (ii)). The Directors of Agriculture in Barbados and Jamaica were to take responsibility for the Leeward and Windward Islands and British Honduras, respectively (Recommendation 21 (a) (iii)). Conferences to facilitate the presentation and discussion of research was accepted but not implemented given the call on resources due to the war effort (Recommendation 21 (a) (iv)). Recommendation 22 (b) proposed that all major research and investigations into agriculture be centralized in the Imperial College of Tropical Agriculture funded by Parliament in order to sustain this new mandate and this remained under consideration by the Comptroller. Simultaneously, a proposal was made under Recommendation 21 (c) to enable the Hope Agricultural School in Jamaica to provide agricultural education that would lead to the diploma courses offered at the Imperial College. However, analyses indicated that this entity would not be able to provide this intermediate education. Recommendation 21 (d) further suggested the areas of enquiry for research, including (a) soil surveys, (b) topographical surveys to address land ownership issues, (c) surveys of peasant agriculture towards an improvement, (d) experimental investigations regarding the introduction of mixed farming, (e) surveys to enable preventive methods against soil erosion, (f) investigations on methods of maintaining soil fertility, (g) investigations concering the marketing of estate and peasant produce, (h) investigations into the implementation of mixed farming with sugarcane and other crops and (i) surveys of agricultural indebtedness and credit with a view to improving the current balance sheet. The surveys and other studies were implemented to varying degrees. Advancements were made regarding the research functions relating to soil erosion, fertility and conservation issues. Advances in marketing organizations were created and improved to increase the sale of locally grown foodstuff. In relation to the financial state of the agriculture  sector, whilst credit facilities were

3  THE MOYNE COMMISSION 

59

expanded, there was little progress as it relates to the debt levels in the sector. Cooperative credit banks were established to facilitate improved credit terms to the sector. In Jamaica, inadequate personnel delayed the implementation of the soil survey until after the war. Cadastral maps were to be implemented instead of topographical surveys in Jamaica after due consideration. Preliminary surveys of peasant farming activities were completed however they required more personnel than was available to do regional surveys. Agricultural stations were instituted in order to support the implementation of mixed farming methods on the estates. Soil analysis was implemented on a small scale until an officer was deployed to complete a detailed investigation. War efforts restricted the extent to which marketing efforts could be implemented. Regarding the mixed farming thrust, advances were made regarding banana and citrus whilst there was more of a focus on domestic food crops rather than on exports. Planting subsidies were awarded in 1943 and 1944 alongside a detailed survey of cane planting and information was gathered in relation to other crops. Implementation of the recommendations from the Secretary of State of the Colonies on August 23, 1939 was the basis of Recommendation 21 (e), in response to which an Agricultural Policy Committee was established during 1945 in Jamaica. The provision of more foodstuff to facilitate a better-balanced diet to satisfy based health and medical needs was the substance of Recommendation 21 (g), with a view to enabling increased production of foodstuff that are adequate in both quantity and quality inclusive of selected dairy products such as milk, fish and eggs along with green vegetables. War-time shortages reduced shipping and consequently imports of foodstuff and therefore the efforts at increased production of local food items was deemed favourable. In order to support the farmers, price guarantees were extended along with undertakings to purchase surpluses for areas with short supply or for use as food for farm animals. Increased production of dairy items and green leafy vegetables was supported by government policy and the prevailing conditions made it convenient for the increased production of root crops. Special measures were recommended under 21 (h) (i) for Jamaica regarding the need for eradicating the banana disease—leaf spot—with support from either local assistance or the British Crown. In order to cover the cost of spraying the price paid by the government for bananas included a premium for this purpose. Further work was also being done regarding research on the control of the Panama disease.

60 

C. CLARKE AND C. NELSON

Given the need for significant resource inflows to address the challenges in agriculture, Recommendation 22 advised the need for the transfer of a substantial sum from the Imperial Exchequer to address strictly agricultural work. The response references the transfer of £2,256,343 up to December 31, 1944 for agriculture and veterinary schemes out of a total £7,702,626. With regards to land settlement issues, Recommendation 23 prescribes that an orderly plan for settling a large number of persons on land as smallholders along with the extension of some form of assistance, despite this being an expensive prospect. This land settlement was to be based on its use for mixed farming and not for exports which they acknowledged would require a change in outlook and methods as well as in the habits and tastes of consumers and the organization of commercial activities. Improvements in the field of husbandry and land settlement for the children of the current farmers in this area was also recommended. Recommendation 24 further reiterated the need to improve husbandry among existing smallholders. However, this recommendation also cautioned governments from committing themselves in the future  to the granting of freehold tenures but to experiment with leasehold agreements simultaneously. Recommendation 25 focused on the provision of a range of options to improve communications and travel between the British West Indies and the United Kingdom. The recommendations included the (a) subsidization of the maintenance costs in regular British shipping, (b) provision of two small sea-going ships for trade between the smaller islands given the reliance on a schooner pool with future considerations of the associated costs and (c) development of regular air services from St Kitts to Trinidad & Tobago and further, by covering Barbados and all the principal Leeward and Windward Islands. With regards  to the recommendations for constitutional and other matters relating to the creation of a political union, the Moyne Commission under Recommendation 26 had not supported the proposals for the granting of either immediate or complete self-­government predicated on Universal Adult Suffrage or expansion in the authority of Governors that would convert the existing arrangements into an autocracy. The first recommendation was not viewed favourably due to the size of the financial resources being committed to the British West Indies for which they would lose direct oversight under this approach. The second was thought to be a regression of the current state of the Legislative Council. It was

3  THE MOYNE COMMISSION 

61

further felt that even the pursuit of a political federation was not the answer to the pressing needs of the West Indies despite this being the recommended course of action. The response to this recommendation from the Crown indicated that it would not want to be in charge of a constitution in the British West Indies that went against the views of the population. It therefore reiterated that the focus of British policy in the region would be to support moves to establish a federation as soon and far as it was practicable, as well as to foster unity among the populations in the region, by removing any obstacles to the establishment of the federation. Opportunities were to be given to Colonial Legislatures and then towards the holding of a conference for West Indian delegates who ought to be afforded the opportunity to formulate proposals for closer associations between the colonies. Lord Moyne’s Commission recommended, nevertheless, that the various interests of the community are represented on the Executive Council. Appointments to the Executive Councils would be done in a manner that ensured that persons selected were the ones best suited to advise on matters affecting the interests of the community. Following on this Recommendation 28 (b) suggested the adoption of a Committee System to be established so that elected representatives were properly oriented to the demands of government. A new constitution developed in Jamaica, provided for a ten-member Executive Council chaired by the Governor and five of the members belonging to the Lower House. The Council would become the main policy-making body and the Committee System was proposed for adoption by the House of Representatives. Under Recommendation 28 (c), election of members to the Legislative Council would be done for all positions except those filled by three representatives from Britain. Universal suffrage was suggested under Recommendation 28 (d) in order to enable the widest representation on the Legislative Council and this was implemented first in Jamaica. Reducing and equalizing the qualification criteria for Legislative Council and voter registration, and grouping of the Leeward and Windward islands would be done as a test of the practicality of federation. At the time, the latter proposal was stymied by the difficulties in communications between the islands during war time and which would be a pre-requisite for workability in the Federation. The Moyne Commission also recommended that more time in the British Parliament be allocated to matters in the colony and to accommodate delegates from the Colonies to make representation at the recommended Standing Parliamentary Committee. It was, however, felt that

62 

C. CLARKE AND C. NELSON

representation to the full Parliament was considered superior to the employ of a sub-committee as that would restrict knowledge of these affairs to those members only. Recommendation 29 represented the concept of a Unified Service for the West Indies that would benefit from delegated powers of necessary for staffing the government and the salaries and conditions of service should be equalized in order to enable persons to interchange in positions as suits them. At the date of the Report, none of these recommendations were implemented given the prevailing conditions.

Conclusion Unwittingly and perhaps inadvertently, the Moyne Commission and its attendant derivatives in the implementation of its recommendations emerged as a significant actor in the formation of what would emerge as the Jamaican state. The recommendations and the justifications for why some recommendations were not achieved reverberate through to the twenty-first century to impact social and economic life in Jamaica and even beyond throughout the Caribbean region. The Commission’s voice can be heard in the perspectives of social and economic commentators who analyse and propose solutions for the challenges and issues facing the country as it entered a new decade. The thrust for Independence whilst representative of the struggles across the British Commonwealth for an escape from the clutches of colonialism, introduced new actors with their own agendas and ideologies into Jamaica’s social, economic and cultural arenas. Prior to Independence, the thrust to implement the Moyne Commission, though sincere, did not result in the widespread transformation that was needed to mount broad and deep social and economic transformation for the masses. The continued call for transformation and development of every aspect of life meant that disharmony and disunity was still prevalent across the country which would militate against the development of a sanguine relationship with continued British rule. The message was clear, despite the efforts of the British Crown to address the challenges in Jamaica—albeit delayed in relation to the granting of Emancipation—they were seen as doing  ‘too little, too late’ and were therefore wholly inadequate given the magnitude and wide dispersion of the needs.

3  THE MOYNE COMMISSION 

63

The British Crown, the Monarchy and their allied entities were no longer viewed as viable actors who would operate for the benefit of the Jamaican people. The British population in the United Kingdom, themselves having been subject to the effects of World War II very directly, collectively became a critical actor in the thrust towards independence. As an important stakeholder to the Crown and monarchy, their agitation for a refocusing of expenditure on rebuilding, retooling and re-energizing the metropole compelled  the British government to reprioritize given the limited economic and human resources available in the post-World War II period. Agitations in Jamaica were largely driven by what would become the two main political parties which emerged as and remained as dominant actors in all spheres of life and sectors of economic activity in the Jamaican landscape. The labour movement and the people’s movement would later emerge as the Jamaica Labour Party and the People’s National Party respectively. In retrospect, the Independence Project was and remains the most ambitious programme undertaken by the Jamaican people. By definition, the coming to the fore of a Jamaican government, in name and intent was new, being ambitious and earnest, however it bore the burdens of a people that had been waiting for more than a generation for a better lot in life. As an actor, it was endowed with a wide range of power however, this power was not matched with or cognizant of the degree of resources that would be required to achieve developmental  results, where the Moyne Commission had failed. The Moyne Commission became a significant actor that triggered both the British and Jamaican populations to advance the Independence movement in the post-World War II period. The Commission indicated the stark social and economic conditions under which the majority of the population found itself, with the Monarchy having no response, given the need to rebuild England in the aftermath of WW2. Meanwhile, Jamaicans were anxious for the long awaited achievement of the dreams and aspirations of freed persons—improved livelihoods, affordable  housing stock, water production and storage, energy production and transmission, and access to consumer goods. The possibility for personal empowerment, development and upliftment through a newly organized economic and social system designed and operated by Jamaicans for the benefit of Jamaicans. The view was that it was the colonial system in and of itself that generated the suffering of the newly freed persons along with the significantly limited levels of investment in infrastructure that would be a critical complement to private activity. The lack of investments and poor/rudimentary public and social infrastructure would have.

64 

C. CLARKE AND C. NELSON

1. stymied the ability of the peasantry to enjoy widespread profitability of agricultural activity, 2. driven the impetus for rural/urban population drift as a means of economic survival with little understanding of the real likelihood of better outcomes thereafter, 3. enhanced the  expansion of rural poverty linked to  the reliance upon small subsistence farming activities with its limitations.  This book, however, debunks the view that it was colonialism in and of itself that generated the challenges of development faced by the various actors in Jamaica. The reflections and analysis will reveal that at every juncture the antecedents and contextual experiences of the Jamaican population; the political ambitions, rivalries and the type of expectations of the population have come face to face with basic economic realities and relationships that drove the country to the brink of various crises.

Bibliography Mordecai, Martin and Pamela Mordecai. 2001. Culture and Customs of Jamaica. Connecticut: Greenwood Press p. 26. Moyne, L. (1938). The Report of West India Royal Commission (The Moyne Report), Chairman Lord Moyne. Report of a Commission established in August 1938 to investigate social and economic conditions in Barbados, British Guiana, British Honduras, Jamaica, the Leeward Islands, Trinidad and Tobago, and the Windward Islands, Cmd 6607. London: His Majesty’s Stationery Office. Moyne, L., Stubbs, R. E., Crowdy, R. E., Citrine, W., Mackinnon, P. G., Blacklock, M. G., ... & Henderson, H. D. (1945). West India Royal Commission 1938–39. Statement of action taken on the recommendations. London: His Majesty’s Stationery Office. Palmer, Colin A. 2014. Freedom’s Children: The 1938 Labour Rebellion and the Birth of Modern Jamaica. Chapel Hill: University of North Carolina Press. West India Royal Commission. 1945. West India Royal Commission Report. London: His Majesty’s Stationery Office.

CHAPTER 4

Jamaica: Independence Realized

Introduction Carved into the historical political economy and landscape of Jamaica’s societal discourse, has been the element of struggle, revealed in the contest of wills inherent in the dismantling of power relations and networks forged throughout the history of the colonies and slave society undergirding the British plantation economy on the journey towards independence. This struggle is exacerbated anew, by the emergence of diverse actors in the post-slavery plantation economy, each trying to interface differently within the ‘new’ context. Each actor in the British plantation economy and society extended effort ideationally, in terms of how they interpreted and understood their ‘new’ world or the new arrangements prior to independence and after. Relationally there is (allegedly) portrayed a new modus operandi of the societal actor network, post slavery, embracing tenets of ‘freedom’ and ‘choice’. But this becomes more of an illusion, being stymied in a reality, despite reconstructions posited through governance mechanisms and the legislation pronounced. Struggle continues more so in terms of the efforts of actors expended to attain to an identity with associated social practices modified from that which was pre-defined within the context of the slave society system. However, given that the context of the actor networks are framed, in that the elements and power relations of the system, the structural edifices, societal and relational power network still persist to

© The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_4

65

66 

C. CLARKE AND C. NELSON

which they are still umbilically linked, the nature of the interface of the actors remained the same. The British were fighting wars on two fronts. Firstly, from being involved in World Wars I and II, being faced with the physical destruction, taking on the task of reconstruction but also reengineering, revitalizing and revisiting the foundations and relational networks within their economy and society. Having lost its pre-war hegemonic standing, Britain sought to salvage and retain as much of its global, economic and political networks and influence, reconstituting them in the context of the geopolitics of changing power relations. Concerned with the viability of the vestiges of its colonial empire, governance solutions had to be determined that would ensure as far as possible, a minimal drain on its already highly leveraged economic resources, no diminution of its geopolitical standing and, at the same time, not undermine its domestic efforts in pursuing development and the restoration of its economy. Authorities were in predicament in the colonies in a bid to retain the network connections of governance, the economy and industry as avenues of wealth creation, while simultaneously being compelled to rethink the continuation of the same  networks undergirding these relational flows. Global events of significance included World War II, as well political concerns whether central planning or market economy regimes should hold sway in determining how post-WWII liberated states and newly emerging independent states (previously colonies) should interface within the networked systems of governance of the global economy. Against this backdrop was the simmering discontent within the colonies, faced with the emergence of a peasant class after the abolition of slavery and the planter class being partially disenfranchised from their historical livelihood. The situation for the latter was exacerbated by the shifting emphasis of productive capacity and industry to the metropole, evidenced by the reduction and eventual absence of financial support from London for the sugar industry in the colonies. The collapse of the sugar industry due to global competition and the pursuit of ‘free trade’ principles left the UK colonial office in the quagmire. This  dilemma concerned what modality of governance and relationships should prevail in the colonies that would not result in an implosion of these island economies, but prevent the continued diminution of their profitability and ensure the stability and control of the established hierarchical society? Furthermore, to reinforce and not overturn the hegemonic image of a strong  British empire, retaining and

4  JAMAICA: INDEPENDENCE REALIZED 

67

exhibiting customary power and influence within the power relations of the global political economy and status quo. Deciding to maximize, despite the challenges and the economic burden that the failing colonies presented, mechanisms were found that would retain elements of the relationship but also afford the salvaging of them in terms of arriving at a position of mutual benefit, compared to the monopolizing of benefits. (see Chap. 2).

Post Moyne Reflections on the political malaise in the aftermath of the uprisings, in Jamaica and the British West Indies resulted in the promulgation of the UK Colonial Development and Welfare Act, which arose from recommendations made by the Royal Commission that was appointed to investigate conditions precedent to the disturbances. What had become evident, was the high levels of unemployment, under employment and widespread poverty, coupled with low levels of social services facilities in Jamaica. The Act provided a framework within which welfare aid as well as development, post-World War II could be framed which was followed by the granting of Universal Adult Suffrage in Jamaica and movements towards actualizing self-government. One of the outcomes of the 1938 disturbances was the formation of the People’s National Party in September of 1938 and secondly, that of the Jamaica Labour Party, being formed in 1943. The leadership of both parties were co-founders of the two leading trade unions. The first election under universal Adult Suffrage was held in 1944, the year the Constitution was reformed (Bakan 1990; Palmer 2014; Caine 2017). Not only did this extension of the franchise increase the size of the electorate but it also altered the composition, empowering the involvement of colonials as more browns and blacks acceded to political positions. Under Britain’s tutelage, Jamaica had been afforded full Adult Suffrage in November 1944, the exercise of which was determined initially by the economic wealth and property held by men resulting in the exclusion of women. However, by December of the same year, the right to vote was extended to all adults, which facilitated elections based on Universal Adult Suffrage, which was contested and won by Alexander Bustamante of the Jamaica Labour Party (JLP), December 12, 1944.

68 

C. CLARKE AND C. NELSON

Ten-Year Plan 1947–1956 The end of World War II heralded the drafting of a Ten-Year Plan to guide the development of Jamaica and expenditures from the annual budget. The Plan from 1947 to 1956 projected a budget of £22,000,000 over the period of ten financial years, focusing on six thematic areas, namely agriculture, communications, industrial and trade development, education, public health and social welfare. The Plan had to be revised in 1951, but the overall intention was to address the concerns for the provision of social services, of which 54% of expenditure was targeted towards education, health and social welfare. Expenditure in these areas were cut in 1951 in an effort to yield more rapid returns, or target ‘low-hanging fruit’, with a view to increase the national income and taxable capacity, whereby actual expenditure in the three areas was only 37%. There was effort made to engender productivity through agricultural expenditures to address the need for soil rehabilitation, the restoration of hillside lands degraded by small farmers, technical assistance as well as to promote efficiency in agricultural land use. The emphasis on productivity, led to the shift in prioritizing expenditures towards, soil conservation, irrigation and swamp reclamation. The establishing of an Agricultural Development Corporation had the intent to assist in research and the provision of marketing and credit facilities. Major industries were retained by foreign companies and profits were repatriated as well as expatriates holding top positions within these organizations, meanwhile wages for local labour was low in comparison. During this period, 40% of the sugar industry was held by foreign nationals. In the 1940s, there was the backyard production of consumer goods for example, based on coconuts, such as soap and oil, leading to the incorporation of the company called SEPROD Limited in July 19401 to produce soap and edible products, inclusive of manufacturing products such as condensed milk, to meet local needs as well as under incentive in Bog Walk near the Rio Cobre. Cement production was spearheaded by Sir William Stephenson, MC, DFC, who was a soldier who became the British Security Coordinator for the Western Hemisphere during WWII and was responsible for supervising the training of US intelligence and spy operations. He established the Caribbean Cement Company as a businessman in Jamaica, in response to cement shortages due to war time hostilities as well as the high cost of imported cement from the United Kingdom.2  http://whoswhojamaica.com/industry/seprod-limited/  http://www.caribcement.com/was-james-bond-inspired-by-the-founder-of-carib-cement/

1 2

4  JAMAICA: INDEPENDENCE REALIZED 

69

Bauxite With respect to the development of the bauxite industry, although it was established from the 1890s, that there was ‘red ferruginous earth’3 in Jamaica, the assessment that this earth was indeed bauxite was verified as a result of soil tests undertaken on lands owned by Sir Alfred Da’Costa between 1938 and 1942. It would take another ten years for bauxite to be exported from Jamaica, whereby investment in the industry was concentrated in the period 1950–1957 and increased after 1963. Operated by three multinational corporations which essentially mined the unprocessed ore and transported it for refining and fabrication to their processing plants in the United States, the growth of the global industry was fuelled by wartime demand, with 130,000 tons produced during World War I increasing to 1.9 million tons during World War II (Girvan 1971). In 1945 large deposits of bauxite were discovered in Jamaica on the verges of World War II, whereby the subsequent exploitation of bauxite proved to be catalytic, considering the economic fortunes of Jamaica during the 1950s being of strategic importance within the context of the Cold War and arms race. The importance of Jamaica to the US government resided in their security  concerns and their ability to defend the route from Jamaica to the Gulf ports compared to the Guianas (where bauxite was also mined), including the size of the deposits and their overall proximity to the United States. This is evidenced by Reynolds and Aluminium Company of Canada (ALCAN) being given resources covering 85% and 16% respectively of their capital investment, coupling repayment to the supply of aluminium to the US stockpile (Girvan 1971). Aluminium was of strategic importance due to its properties, being light in weight, resistant to corrosion as well as possessing high electric conductivity. It was also used in the production of cement and chemicals as well as being used for construction, transportation, the making of consumer goods and electrical materials. The discovery of commercial quantities in Jamaica was deemed critical to the government of the United States, to further the expansion of the US and Canadian Brookside industries that were reliant upon imported bauxite. The US economy made profits on aluminium from the War by supplying both the British and the Germans as well as shifting their production of equipment to the lighter aluminium from steel. Aluminum Company of America (ALCOA) and Aluminium 3

 http://www.jbi.org.jm/pages/the_making_of_an_industry

70 

C. CLARKE AND C. NELSON

Company of Canada (ALCAN) were created out of the local negotiations with the British, facilitating access to Jamaican bauxite since the latter could not access the French resources. The foreign policy interests of the US government included breaking the monopoly position of ALCOA to encourage competition and the entry of Kaiser and Reynolds to the aluminium industry. The industry became controlled by these entities and they each established their own ports—Kaiser at Port Kaiser on the south coast, Reynolds from Ocho Rios on the north coast and ALCAN from Port Esquivel. In 1976 ALCOA had US$2.9 billion in sales, ALCAN had sales of over US$2.7 billion and Reynolds Metals Company had sales of US$2.4 billion, making these three companies first, second and third in the world in aluminium production. What was not apparent was the large percentage of electricity that needed to be consumed in the production of alumina. Consequently, given the fledgling electricity supplies available within Jamaica and the enormous capital intensive requirements of energy generation, Jamaica had to forego the opportunity to capitalize on the benefits of engagement in production and processing further along the value chain due to these requirements. The result was that the raw material was supplied from Jamaica and the more profitable capital-intensive smelting aspects would remain within the United States. Consequently, there was the skewing of smelting operations of more high-end activities towards remaining in the developed society. The multinational organizations controlled all stages of the process from mining bauxite, refining and smelting into aluminium, inclusive of shipping and transportation and production of items for consumers. Resources were not accessible for infrastructural development; however, emphasis was placed on the necessary railway linkages to facilitate the movement of bauxite deposits. The Kaiser Bauxite Company built 19 kilometres (12 mi) of independent track and 12.1 kilometres (7.5 mi) of sidings running from mines in upper St Ann to Discovery Bay. The company utilised Baldwin locomotives and purchased eight between 1952 and 1971. ALCAN for the most part, used the existing lines of the Jamaica Railway Corporation (JRC) running from Bodles to ship its product to Port Esquivel. ALCOA built a thirty-one-kilometre (nineteen-mile) railway in 1962 to connect its Woodside mines with the port at Rocky Point Port. This line was then leased to the JRC and ALCOA provided locomotives as rolling stock, and its staff operated and maintained the line under JRC management. Jamaica’s first shipment was in 1952 and by 1957 had

4  JAMAICA: INDEPENDENCE REALIZED 

71

a productive capacity of 5,000,000 tons of bauxite per  annum, which proved to be 25% of the total mined in the world that year, to become the world’s leading bauxite producer. In fact, the economic activity generated by the bauxite mining provided well needed foreign exchange, employment and infrastructure development that was welcomed. Other partners over time such as Alpart built eighteen kilometres (eleven miles) of independent track in the 1970s to connect its refinery at Nain with Port Kaiser near Alligator Pond. Windalco built a line to move Bauxite deposits while Reynolds built a short independent railway to link mines, drying plants and ports. Twenty-five years later the bauxite companies owned 75% of the land area of Jamaica. One could argue, that apart from rail lines being built in connection with the mining of bauxite, its refining into alumina and then transportation to the Port, that the activities of the bauxite companies also served as a catalyst to ignite interest in public investment through the associated  building of roads and electrification of rural communities. Public infrastructure development as aforementioned was also fuelled in this post-war period in the form of bridge building and road paving that had the unintended consequence of reducing passenger rides on the railway system.4 The pillars of the economy were changing and differentiating towards mineral products. However, it was the market potential of bauxite  that also provided an impetus for investment and equipment to be brought in to jumpstart activity and the eventual inflow of US dollars. There was a displacement of the peasantry when persons started planting the lands which held bauxite deposits, from which they were ejected, prompting rural urban migration away from the land, towards urban cities like Kingston or even immigration to England. Levels of unemployment ranged from 13% to 24% (Bissessar 2019). Financial flows from the expansion in the bauxite sector was not widely shared in the economy which fostered continued widespread social discontent. Persons acknowledged the economic growth that had occurred; however, they realized that there was a distinction between growth and development and began to agitate for economic development. Development was understood to be more widely experienced by the population than growth. The passing of the Jamaica Hotels Law in 1904 laid the foundation for the growth of the tourist industry after World War II, buttressed by the 4

 http://www.wikiwand.com/en/Rail_transport_in_Jamaica#/Bauxite_lines

72 

C. CLARKE AND C. NELSON

development of International Airlines and hotel accommodations in the country after the 1944 Hotel Aid Law. Prior to this Jamaica was promoted as a health retreat for cruise passengers from the United States in the 1950s Jamaica was pursuing the Puerto Rican model of development which include diversification and import substitution through the development of the manufacturing sector propelled by foreign investments. This approach was pursued even after independence and allegedly assisted in fuelling some benefits in terms of employment. The creation and activities of the Jamaica Hotel and Tourist Association were supported by legislation in the form of the Island and Hotel Incentives Act of 1968 which provided incentives that encouraged the growth of tourist accommodation. However, the profits made were largely expatriated, depriving Jamaica of developmental benefits. Government and Governance Jamaica transited certain milestones on the road to independence while still under Great Britain’s control. One of which included Jamaica’s limited self-government and creation of a Constitution in 1944, premised upon the Westminster model of government. Institutions were created such as a nominated and elected Executive Council, chosen from the majority in the Legislative Council, subjugated under the power of the Governor. This governance arrangement was changed, as was the Constitution, in 1953, giving place to a Chief Minister and seven from the House of Representatives which was modified on achieving ‘full’ self-­ government in 1957. Thereafter, the Executive Council was replaced by a Ministerial Council leading to a reduction in the powers of the Governor, which was eventually rescinded to full self-government which was achieved in 1957. One of the implications of the introduction of the Ministerial System in 1953 was to cede to elected ministers the responsibility for the general budget. Prior to this, governance of the financial affairs of Jamaica were the remit of the Colonial Office, centralized through the civil service, personified in the officer designate of the Financial Secretary, who reflected and was influenced by the policy interests of the Home Office. More so, that financing of the budget was underwritten by resources provided under the Colonial Development and Welfare Act (C, D and W). Given the opportunity provided for Ministers to reflect and represent the interests of their constituencies apart from being subject to political

4  JAMAICA: INDEPENDENCE REALIZED 

73

pressures and public agitation, it was inevitable that the budget would increase with a view to reflect these concerns. Consequently, in terms of budgetary allocations agreed prior, these changed in an effort to respond to public demand, for example, for increased social services, hence increasing expenditure in areas that had been formerly reduced, or that was now elevated to be of political importance. For the government to fund budgetary obligations, an increased percentage of the budget had to utilize a greater percentage of borrowed resources than that envisaged in the original Plan. Up to 1957 a total of £14.5 million had been borrowed of which £5.6 million was for Plan financing, while 61% or £8.84 million now had to be raised externally.

The 1957 Plan Using agricultural development as the catalyst, the new plan of 1955 was introduced by the newly elected government which proceeded with the intention to propel the rate of development by a projected expenditure of £78,000,000 over a ten-year period. A central planning unit was established which produced a new Ten-Year Plan in 1957–1958 with the following attributes and emphases. Agriculture, seen as the catalyst, was incentivized by the introduction of farm development schemes to encourage farmers to use subsidies and loans to fund their projects and improve their farms. The Scheme was to embrace 8% of all farms and 15% of all farmland at the end of the three years. Secondly, there was an emphasis on engendering strategic industrial development, supported by the requisite expenditures inclusive of the institutional capacity of the Industrial Development Corporation, to provide financial aid and  increase the assistance given  to manufacturers to expand their offerings and activities. Expenditure support was proffered for infrastructure and the necessary framework to support the movement of goods and services namely the construction of roads, water supply systems and airport transportation. Expenditures were also provided in the budget for needed social services such as health and education. Universal primary education was also one the objectives of the plan for this period. The financing of this Plan was different from the previous Ten-Year Plan, as there was the expectation that the financing and development expenditure would be derived from the use of public savings to reduce the input of foreign assistance in the implementation of the Plan, as well as bauxite taxes,  for a new tax agreement was brokered between the

74 

C. CLARKE AND C. NELSON

government and the bauxite companies which was concluded in March 1957. From 1957 to 1963, 65% of the revenue for development was provided by accessing local resources. Another element of difference, was the inclusion of provisions for industrial development as well as the tourism industry, compared to the previous Ten-Year Plan. Projections of increased bauxite revenues due to the growth in production and the market price of aluminium contributed to an optimism born of an assumption that non bauxite tax revenue would rise at an annual rate of £2.2 million attributed to the degree of foreign capital invested in various operations within the domestic economy. Expenditures were targeted towards Agriculture, Communications and Works taking 63% of planned expenditure, with 23% targeting economic services such as Industry, Trade, Mining and Labour, Finance and Development. Provisions for social services were increased in terms of the share of actual spending in areas such as Education, Housing, Social Welfare and Health. The level of government saving increased due to the growth in bauxite revenues which materialized earlier in the first three years of £10,000,000, which was expected but the actual yield was £11.3 million, attributed to the new agreement taking effect earlier than anticipated compared to when the plan was actually drawn up. Another positive was the recurrent revenue which grew, which was partially attributed to the level of purchases in the economy and local capital investment by industries linked to the bauxite industry and also through the higher level of public spending financed by the inflows of bauxite revenue. Expectations of recurrent revenues of £6.6 million in the first three years became £8.8 million. The caveat of the slow growth of recurrent revenue and the contribution of government saving in the second of the three years was less that envisaged in 1957 due to shortfalls in anticipated books at revenues. However, after 1958, as bauxite production aluminium prices did not grow as expected and the price for aluminium affected government revenue from the industry, fluctuations rather than increases began to take hold. Projections were predicated upon a high level of foreign investment in the mining industry and the knock on effect it would have on other industries which held true up until 1957. The annual growth rate of Jamaica from 1950 to 1957 was 13%.

4  JAMAICA: INDEPENDENCE REALIZED 

75

West Indies Federation 1958 Interpreted as an effort to retain influence, as well as and premised on the similarities of tradition, language, social economic life and common interests amongst the colonies, Britain passed an act to constitute a federation of the West Indies to come into effect on January 1958 as a single state, which would require that it possess its own government and Constitution. Thus, Jamaica would transition to full political independence as part of the West Indies Federation in 1961 with and inclusive of other Caribbean territories. The concept of a federation was not new in British colonial parlance, being advocated as early as 1883, in the context of the Leeward and Windward islands, which was not actioned. It was noted thereafter in 1922 that West Indian opinion was against the Federation and institutions created to bring it to fruition came to naught. After World War II it was an accepted view among the larger countries in the world, that small nations could not compete economically and survive politically in the modem world. Britain’s belief in this theory led them to their offer of 1947 (Sewell 1997). The view was held that West Indian islands themselves had to become conscious of the need for unity, for any success or movement in this direction to be successful (HP 1950, 261). Several factors thereafter assisted to bring the idea of regional unity to the forefront, such as the establishment of regional entities such as the Development and Welfare Organization followed by that of the Caribbean Commission. West Indians had already begun to meet for various reasons such in the context of the Caribbean Labour Congress, the West Indies Sugar Association, the Federation of Civil Service Associations of the Caribbean and the Caribbean Research Council. These institutions of regional unity signalled and enabled initiatives in the form of preferential trade agreements, special treatment and future purchase agreements of agricultural products and the emergence of air services in the West Indies with increased connectivity. The question of the Federation was brought to the fore again in 1945, resulting in the convening of a Conference of the British West Indian colonies which was held in Montego Bay, Jamaica. The Conference highlighted the desirability of the political Federation of the British Caribbean territories and the acceptance of the principle of the Federation on the basis that each constituent unit would retain autonomy over its affairs except those specifically assigned to the Federal Government Standing Committee. This Committee was set up to establish the federal constitutional

76 

C. CLARKE AND C. NELSON

arrangements and make recommendations regarding the unification of public services and currency. The British wanted the colonies to create a federation, to which Britain would grant independence synonymous with membership into the Commonwealth. It was opined that the islands of the Caribbean were not attempting to divorce themselves from Britain, as so many of their other colonies were. The British West Indies islanders sought freedom to determine their own destinies without interference or assistance from Britain but be part of the British Commonwealth of Nations (Sewell 1997). The Committee reconvened in 1948 and again in 1949, with an imperative to realize the shortest path towards real political independence for the British peoples of the region, in the context of the British Commonwealth. Advocacy was made for a British Caribbean Federation built upon the Australian pattern with the legislative power being vested in a federal legislature consisting of a Governor General, a House of Assembly and a Senate, the latter of which had twenty-three nominated members, while the House of Assembly had fifty elected members inclusive of a federal Supreme Court. It was important to note that not all groups again, were in support of the idea of the Federation, such as East Indians in Trinidad and British Guiana, who felt vulnerable as ethnic minorities. Others feared the imminent control by Jamaica as the largest economy whereas within Jamaica, there was several divisions, uncertainty and mixed viewpoints. One outcome, acceptable overall, was the reiteration of the importance of education to the furtherance of democracy and development within the region coupled with the advocacy for the establishment of the University College of the West Indies as a symbol of such, as well as to convey and encourage cohesion and regional unity. Federation-wide elections were held throughout the islands, with the two main contenders made up of parties or groups from the British islands to constitute two main parties, namely The West Indies Federal Labour Party (WIFLP) (which was urban based) and the Democratic Labour Party (DLP) (rural based) with Norman Manley assisting the former and Alexander Bustamante, the latter. There were similarities in advocacy namely, encouraging expansion of the economy for example, in tourism and strengthening economic and cultural ties with the United Kingdom, the United States and Canada. The WIFLP encouraged agricultural enterprise development while the DLP encouraged private industry focused on labour concerns and the development of human and economic resources. The WIFLP triumphed in the federal elections of March 25, 1958, whereby Sir Grantley Adams of Barbados, Mr. Manley’s deputy  in the

4  JAMAICA: INDEPENDENCE REALIZED 

77

party, became the Federation’s first Prime Minister due to the non-­ involvement and reticence of Mr. Manley. Concerns of preserving political collateral in the domestic context of Jamaica are suggested as possible concerns, which would have been offset by his absence. Signals that all was not well within the fledgling Federation was recognized by the non-involvement of the leaders of the political parties in Jamaica as candidates at the federal level. The non-participation of Jamaica in this manner, was interpreted as a sign that the Federation’s unity was a fragile one given their absence and their exemption from any role at the federal level. Jamaica became a founding member of the West Indies Federation created on January 3, 1958 through the legislation of the British Caribbean Federation Act of 1956. Further, the victory of the WIFLP and Manley in the regional arena at the federation level was mirrored by Manley’s defeat at home in the domestic arena a few years later.

The Jamaican Split There had been a call for a greater association between the islands as early as 1947 as a means for them to combat isolation, smallness and lack of economic viability within the context of participating as viable economies given their structural positioning within the global political economy. The Jamaican economy in 1958 was rebounding from adverse world conditions the year before, with increased diversification of the economy with respect to the development of mining, manufacturing, industry and tourism. The endorsement of the appropriateness of the economic policies pursued was evidenced by manufacturing being 12.5% of the GDP and post-war growth of other activities. Amendments were being contemplated to institute a mandatory levy on the territories and to introduce a regional customs union with the intention to provide revenue to the federal government. The mandatory levy on the former colonies, would result in Jamaica contributing 43% of it as well as entitling the federal government to profits from currency differentials. Consequently, within the context of economic successes in the development of the secondary industry, the government of Jamaica did not want to regress. The imposition of a direct federal tax introduced by Sir Grantley Adams, the federal Prime Minister, engendered public and national dissent in Jamaica, with local calls being made before the end of 1958, for Jamaica to leave the Federation.

78 

C. CLARKE AND C. NELSON

Norman Manley, was nevertheless successful in the Jamaican general election of July 1959, being outspoken in favour of West Indian unity and of the Federation when he  became Jamaica’s Premier 1959–1962. He asserted the superiority of the British Constitution, stating, ‘I make no apology for the fact that we did not attempt to embark upon any original or novel exercise in constitutional building’ (quoted in Lindsay 1975, 99). Manley’s clear support for the Federation was somewhat prefaced against the background of dissent from the Jamaican public. His expressions on these issues suggest a shift in attitude and rhetoric to indirect expressions referring to the need for proper representation, protection against every form of taxation, (federal) the freedom to pursue Jamaica’s  own economic development policy within the context of the Constitution  including the protection of Jamaica’s interests and in particular the industrial programme in everything relating to a Customs Union. The Opposition leader Sir Alexander Bustamante, who had been consistently and openly averse to the Federation, had taken the position that Jamaica must leave the Federation or secede. These debates in the context of domestic politics fuelled extensive rhetoric which constituted an outright objection to the Federation. Manley was forced to concur there was no guarantee that he could obtain parliamentary approval for the Federation in the absence of joint support from the Opposition. Mr. Manley consequently engineered a referendum amongst the populous of Jamaica, outside of the consultations with Federal Party associates in the region as well as the British government, with a view to engender public support for the general principle of the Federation and to obtain an endorsement from the Jamaican public. In 1961 the referendum was held in Jamaica on continued membership within the Federation, in which the vote was a complete rejection of membership and reversal, with the populace indicating to secede membership, which Bakan (1990) attributes to Alexander Bustamante’s efforts and the newly found ‘Jamaican nationalism’. National independence was granted in August 1962 with Sir Alexander Bustamante becoming the first Prime Minister of independent Jamaica. Against the backdrop of trending economic success for Jamaica with the emergence and profitability of the bauxite and tourism industries, the challenges of smallness, of inter-island diversities, insularity and the communication deficit, as well as geographical distance warranting federalism as a mitigating response or mechanism against these, was discounted. Subsequently the referendum of September, 1961 which was orchestrated

4  JAMAICA: INDEPENDENCE REALIZED 

79

by Manley, to engender and obtain popular support ended up in a clear victory against the Federation. Altogether, the Caribbean or ‘nursery of the British Navy’ (HP 1950, 257) within a few years, demonstrated reluctance to cede their political independence and freedom within the institution of a federation thereby, bringing about its collapse. Alexander Bustamante and Michael Manley as leaders of the JLP and the PNP respectively, were critical in the nationalist movement that agitated for internal self-government and later, national independence. The Bustamante however, of this period has been variously described as a ‘firm supporter of the Crown … [and] a staunch opponent of colonial independence’ (Bakan 1990, 113). Thus, the claim that he was a ‘strong nationalist’ (Daniel 1957, 167) might be an exaggeration as Bustamante’s nationalism may have only developed in response to Manley’s support for a federation of the islands of the West Indies through which independence would be gained. Nettl (1967, 205) posited that the leaders of newly independent nations face a paradoxical task in striving to achieve a degree of continuity with the past, coupled with the desire for maximum dissociation from it.

1962 Independence and Leadership Jamaica’s two political parties had transitioned from the leadership which founded the parties in the wake of the 1938 labour struggles to a new younger leadership that would lead Jamaica in its first two decades of independence. The Jamaica Labour Party, which was voted into office in 1962, was formally led by Donald Sangster, but Sir Alexander Bustamante, was the party’s informal leader who retained control over the JLP’s mass organization, along with the Bustamante Industrial Trade Union (BITU). The People’s National Party (PNP) was still headed by its founder, Norman Washington Manley.

The Public Sector The Constitution of 1962 established a parliamentary system with political and legal traditions closely modelled upon that of the United Kingdom. After gaining independence in 1962, the new Constitution made a number of changes to the political structure instituted when internal self-rule was granted in 1959. The Premier was now referred to as Prime Minister, who

80 

C. CLARKE AND C. NELSON

presided over an executive Cabinet drawn from the legislature. The legislative arm itself was expanded from the thirty-two members to sixty (currently sixty-three) representing their respective constituencies (Buddan 2009). The Judiciary, though having the Privy Council as its highest court, was now staffed by members appointed by the Governor General (the Queen’s representative) on the advice of the Prime Minister and/or the relevant Public Services Commission. The Prime Minister himself wielded significant power over both the executive and the legislature (akin to that of the Governor of the Crown Colony system) to the point that he was referred to, at times, as ‘an elected dictator’ (Munroe 2002, 116). Modelled on the British system of government, the Westminster-Whitehall model and the ‘first-past-the-post’ electoral system, Jamaica’s Constitution essentially instituted rule by either of the two major political parties. The Westminster model is characterized as representing centralized hierarchical institutions, driven by hegemonic command and control procedures of executive elites, with the government being a monolithic whole, where bottom up participation is excluded, with the system underwritten by the philosophy that the government knows best (Rhodes 1997). Several Caribbean authors have opined that the traditional framework of the Model was a product of evolution and experiment, (Guerre 1971) others such as Ghany (1994) posit that the model being exercised in the Caribbean is a myth, consisting of a set of adaptive devices created by civil servants at Whitehall in the United Kingdom, to contain the competing political interests at the time of independence. Pollitt and Bouckaert (2004) suggest that the model does not describe adequately the change inherent in the way societies were governed, while La Guerre (1971) indicates that the regimes and patterns of government that remained in the Caribbean have led to political polarization, exclusionary political practices and clientelism, to the extent that some have argued that the model is no longer relevant and has been transcended (Go 2003). These positions have led several debates compounded by the changing state under globalization and conceptions of the shift from government to governance which has given rise to the emergence of different alternative models and different political and institutional arrangements of organizing and pursuing the collective interest (Pierre and Peters 2019). The form of the public sector also changed, away from the orientation towards the production, packaging and exportation of sugar to England; the suppression of the enslaved population; and the maintenance of services for Englishmen in Jamaica.

4  JAMAICA: INDEPENDENCE REALIZED 

81

The Post-1962 Independence Project Despite the improved economic buoyancy of the 1960s there continued to be dissatisfaction with several aspects of the economic situation namely, persistent income inequalities, the limited economic opportunities particularly for those with low levels of skill, coupled with  increased foreign ownership of local assets, which was viewed negatively in the context of emerging nationalistic views as independence bloomed. The decline in the world prices for bauxite and alumina as well as the strategic importance to the United States of the bauxite and alumina industry expressed in terms of market demand, had repercussions for Jamaica’s revenue streams from the sale of the products, exacerbated by the entry of additional suppliers as competitors into the global marketplace. Consequently, the assumption by the government that the bauxite tax revenues would become a critical pillar in the expenditure required under the Independence Plan fell through, with greater reliance placed on other forms of tax revenue and borrowing. Over the six-year period from 1957 to 1963 bauxite revenues did not experience the rate of growth anticipated in 1957, requiring the government to borrow to finance the 1957 Plan, sourcing the bulk of the additional funds of about £4.6 million, from the domestic capital market. Shortly after independence, the government experienced increasing demands from the population as they had gradually moved away from plantation settlements and created their own towns both formally and informally. These settlements required the provision of basic amenities such as roads, water and infrastructure and the development new livelihoods for the populace to support their development away from the plantation. The need for secure housing and security of land tenure with the necessary legal requirements put in place, demanded state intervention to respond to them. In addition, the demand for access to and affordability of education at all levels and the provision of basic consumer items was increasing. Agitation around the poor, social and improper working conditions had produced the skeleton of the trade union movement that championed the cause of the worker. Once self-governance was realized it was felt that a self-directed economic structure with Jamaicans in charge, would expand economic opportunities and thus the economic benefits would accrue to the individual. Growing inequalities in income distribution and the recognition within the country of same, despite the benefits derived from economic growth, caused the government to take stock, especially with the growing

82 

C. CLARKE AND C. NELSON

agitation from the populace. The most disenfranchised were small farmers in rural communities whose economic position declined concomitant with the increased pool of urban unemployed partially due to rural urban migration and the hope of obtaining jobs in the growing industrial sectors. This growing awareness was explicitly capitalized upon in the election of 1962 which voted the Opposition party into power and Faber (1964) concluded that the swing of votes in favour of the JLP, reflected the degree to which various areas believed that that they had not benefited from their proper share of economic development. The creation of the 1962 Independence Plan thereafter had the objective therefore to address the provision of economic, social and cultural services mainly for the benefit of those sectors of the community where the need is greatest and the demand for improvement has been clearly reflected in discontent and unrest over the years.

Consequently the 1957 Plan was replaced in 1963 with the Five-Year Independence Plan, with the intention to finance it largely from resources overseas (Girvan 1971). The 1961–1962 throne speech attempted to address these issues through programmes to increase water, employment, agricultural production and credit to facilitate increased investment. Given the timing of the election and the election of a new government, the budget during this period was a stocktaking budget. The primary fixture was the creation of jobs. Agriculture was to support the marketing of food products; price controls to address the cost of living; the continuation of housing, agriculture and education projects; the review of salaries and new posts for a wide range of civil servant groups, from doctors to weekly paid government workers.

The 1963 Plan A similar mandate was pursued in the first budget and throne speech under independence in 1963–1964 with the reduction of unemployment through craft cottage industries and construction; agricultural production; incentives for production particularly in rural areas and agricultural production; and the expansion of education spaces for primary age children. The government of the day was forced to contend with the expectations of the population for access to services new roads sewage systems

4  JAMAICA: INDEPENDENCE REALIZED 

83

health and water supplies and consequently there was the need for resources to ensure that the government of the newly independent nation would agitate for improved standards of living and the change desired. On February 21, 1963 Jamaica became a member of the International Monetary Fund and about four months later signed an agreement for a one-year Stand-by Arrangement (SBA) which facilitated access to resources commensurate with the special drawing rights (SDRs) of US$10,000,000, which expired unused in 1964.

Foreign Ownership of the Economy The 1964–1965 Production Budget focused on Agriculture and Industry with moves to strengthen the financial sector. Treasury bills were used to raise funds to support government activities. Civil service salaries were further revised youth programmes and community centres were developed. The country passed the IMF Review of the Stand-by Credit Arrangement. An Expansion Budget was tabled in 1965–1966 to again tackle unemployment, production in agriculture, industry and tourism; develop rural area facilities; increased incentives to areas such as food processing, tourism development, land reform; drain and harbour production; 900 administrative and 269 temporary jobs; completion of technical high schools, primary schools and teachers’ cottages; and the expansion of teacher training. Consolidation was the focus of the 1966–1967 budget in the wake of decreased agricultural exports due to depressed banana and sugar prices despite 7.5% economic growth. Manufacturing had become the largest sector of the economy and there were increases in construction, tourism and mining. Land reform was also important to support further agricultural development. The expansion of education through the development of training colleges, junior secondary schools, technical training and compulsory attendance from ages 6 to 15. Youth unemployment was to be addressed through youth centre activities. During the 1967–1968 budget year the second Five-Year Development Plan was to be developed. There was a plan for the further expansion of education and the development of a Dairy Development Programme and Cold Storage in domestic agriculture. More farmers were to be sent on the US Farm Programme and the Youth Employment Advisory Programme

84 

C. CLARKE AND C. NELSON

and Apprenticeship Training were to be made available. A detailed Road Construction and Maintenance Programme for rural areas was developed too along with water supply schemes and the construction of three hospitals and the development of the Kingston Public Hospital. Infrastructure projects such as those generated through the development of bauxite areas were important as they provided large numbers of jobs for the population and simultaneously enabled the development of the stock of physical capital. The Urban Development Corporation was established in 1968 to institutionalize this approach by redeveloping, defining, designing and developing all urban areas across the island. Indirectly, these developments were intended to address social issues such as rural-urban drift, which has materialized in the form of squatting in close proximity to the city centres. Other institutions such as the National Insurance Scheme (1963), the Golden Age Movement (1965), expanded access to primary education, expanded teacher training, improved quality of secondary schools and, community-based enterprises were developed to provide livelihood opportunities, were implemented shortly after independence to address various aspects of the social problem.

Conclusion An early indication of Jamaica’s position regarding its relationship with the international economy was articulated by Sir Alexander Bustamante, the first Prime Minister of independent Jamaica, when he asserted, ‘We are with the West’ (quoted in Beckford and Witter 1980, 73). The economic strategy favoured by both parties thereafter was an imitation of the Puerto Rican model dubbed industrialization by invitation. The strategy courted international capital through the offer of such incentives as tax holidays, duty-free imports, special site rentals and depreciation allowances (Beckford and Witter 1980). This resulted in a partial diversification of the economy that was primarily agricultural, by attracting investors in mining and manufacturing (bauxite), tourism and services (banking). In a very real sense the relationship could certainly have been described as a clear case of ‘corporate imperialism’ (Girvan 1976) since the multinational corporations (MNCs) owned and operated the local bauxite industry. Beckford and Witter (1980) argue that foreign capital was important in the expansion of tourism and banking and the ultimate beneficiaries of

4  JAMAICA: INDEPENDENCE REALIZED 

85

the growth were the international capitalists who benefited from an unequal system of distribution. The investors came mainly from the United States, Canada and the United Kingdom. During the late 1950s–1960s the country saw a rapid rise in the growth of its economy, becoming in the early 1960s the world’s leading exporter of bauxite (Mordecai and Mordecai 2001). Inflows of capital have historically been attributed to the tourism and bauxite industries that enabled some diversification from economic reliance upon traditional agricultural produce after colonialism. The growth associated with the JLP government of 1962 was more intensely linked with the presence of foreign capital and was associated with a simultaneous increase in the level of income inequality due to the high capital-intensive nature of the sectors receiving the investment. The economic strategy continuing into the 1970s, ‘Operation Bootstrap’ or industrialization by invitation, was supported by both parties regarding the bauxite industry. Growth in the industry and the wider economy continued due to the required investment cycle in the industry and, at the end of the decade, six transnational companies—ALCAN, Reynolds, Kaiser, ALCOA, Anaconda and Revere—had well established mining and or processing bauxite plants in Jamaica. These companies’ each had a global footprint, exercising control over every aspect of the worldwide aluminium industry and, as such, they had an overwhelming advantage vis-à-vis Jamaica’s lack of experience in the bauxite industry and efforts to engage in sectors that would engender economic development. Consequently, the terms of the first agreement between these companies and the government were highly unfavourable to Jamaica. Jamaica’s economic development was umbilically linked and connected to the global actor network of the bauxite industry financed by foreign direct investment predicated upon continued returns from monopolistic profit maximization on the part of the investor. This in turn, was subject to vagaries of global market price fluctuations, the impact of growing competition and demand with respect to the changing geopolitical interests of US foreign policy. Networks of governance, economic and socio-­ cultural ties with Britain under colonialism were being eroded and replaced by a fledgling Jamaican nationalism and the growth of connectivity with the United States in networked relations through the influx of foreign industry and capital surrounding the bauxite industry.

86 

C. CLARKE AND C. NELSON

Up to the late 1960s, Jamaica had no need to ascribe to the IMF. The economy was performing creditably and Jamaica was viewed as a wonder among developing countries given its recent receipt of independence. The fact, however, was that this economic performance was due to two major factors that were not directly determined or controlled by the Jamaican government. The first was the recovery of the world economy upon which Jamaica was heavily dependent, which was driven by the ability of the global productive sectors to convert their war production machinery towards the production of consumer goods such as cars and washing machines, fuelled by the extraction of domestic bauxite to produce these goods. The discovery of bauxite in Jamaica and the serendipitous link between bauxite and the production of the consumer goods demanded globally was the second boost to the Jamaican economy. Other flows were available through nascent foreign direct investment in the tourism sector and other factories were established that provided a level of employment and earning sources for allied services that combined to provide a respite to some sectors of the population. Increased income provided a fillip to imports and increased demand for goods and services. The terms of trade during this period happened to be in Jamaica’s favour and such expansion could be safely accommodated. The challenge faced by the administration of the 1960s was now related to the distribution of this income across the entire population. Skill levels were low as an artefact of the colonial history of the country and this implied that even where labour—the freed persons most important asset— was employed, it would not accrue a large proportion of the returns enjoyed by the companies for which they worked. As a result, although Jamaica’s economic performance was positive at the macroeconomic level, the local population was still broadly outsiders to and excluded from participating in these gains and their condition was still defined and characterized by poor living conditions, low levels of education and poor health access and outcomes—all critical contributors to their ability to access a share of the newfound wealth—the precise conditions detailed by Lord Moyne (see Chap. 3). Given this juxtaposition of wealth and lack—with the foreign owners and operators of capital seemingly extracting the wealth of the country and sharing very little with the local population— resentment against various entities particularly the foreign owners of capital grew. This translated to a reduction in the trust of the political administration as there was no observed substantive contribution in the living conditions

4  JAMAICA: INDEPENDENCE REALIZED 

87

of the people which was the responsibility of the government. These sentiments were elevated in the political arena in the face of an imminent general election. Riots and unrest re-emerged towards the end of the 1960s with a state of emergency being declared in 1967 in order to contain the situation. The Opposition party joined in the calls for changes to the prevailing economic struggle as it vied for power in the 1972 election. Girvan et al. (1980) indicated that the PNP government of 1955–1962 did attempt to generate development by promoting private investment and attracting foreign capital. Nevertheless, given the fact that the growth associated with the JLP government of 1962 was more intensely linked with the presence of foreign capital, simultaneous with increased levels of inequality due to the high capital-intensive nature of the sectors receiving the investment, the JLP came to be associated with the foreign domination of the local populace. In their early years, both parties were structurally similar drawing their leadership from the mulatto middle class and were ideologically indistinguishable pursuing practically the same policies especially in the realms of economics (Beckford and Witter 1980). Given the foregoing, independence, though not fought for in terms of military deployment on the ground, was still the result of many physical skirmishes, verbal battles and deep economic hardship for the masses of the Jamaican population. In retrospect, the personal and private discord between the two Jamaican politicians dogged their political careers and infused the nature of political relationship beyond it, portrayed in the context of issues of the Federation and juxtapositioning at the interface with the implicit wishes of the post-colonial powers seeking to preserve their influence. This discord arguably seeped into and infused the network of relations created between the respective political parties of the leaders, their generations and their affiliates arguably, beyond the immediate historical context and extending into the future. The tribal characteristics exhibited between the two political parties and the nature of their respective interactions within the political and societal actor networks of the Jamaican political economy are evident. While it is imaginable that persons saw some improvement in their living conditions, possibilities for personal empowerment, development and upliftment through a newly organized economic and social system designed and operated by Jamaicans for the benefit of Jamaicans was a dream pursued.

88 

C. CLARKE AND C. NELSON

Bibliography Archibald, C.  H. (1962). The failure of the West Indies Federation. The World Today, 18(6), 233–242. Bakan, A. B. (1990). Ideology and class conflict in Jamaica: The politics of rebellion. Montreal: McGill-Queen’s Press-MQUP. Barrett, L.  E. (1971). Mirror, mirror: Identity, race and protest in Jamaica. Caribbean Studies, 11(3), 101–104. Beckford, G., & Witter, M. (1980). Small garden … bitter weed. London: Zed Books Ltd. Bell, W. (1977). Independent Jamaica enters world politics: Foreign policy in a new state. Political Science Quarterly, 92(4), 683–703. Bell, W., & Gibson, J.  W., Jr. (1978). Independent Jamaica faces the outside world: Attitudes of elites after, twelve years of nationhood. International Studies Quarterly, 22(1), 5–48. Bissessar, A. M. (2019). Development, Political, and Economic Difficulties in the Caribbean. In Development, Political, and Economic Difficulties in the Caribbean (pp. 1–11). Palgrave Macmillan, Cham. Buddan, R. (2009, July 12). Fifty years of self-government. The Gleaner, old. jamaica-gleaner.com/gleaner/20090712/focus/focus6.html Caine, T. (2017, August 6). Jamaica’s political journey to independence. Jamaica Observer. www.jamaicaobserver.com/news/jamaica-8217-s-political-journeyto_106279? Profile=1444 Charle, E. (1966). The concept of neo-colonialism and its relation to rival economic systems. Social and Economic Studies, 15, 329–337. Crichlow, M. A. (2005). Negotiating Caribbean freedom: Peasants and the state in development. Lanham: Lexington Books. Cumper, G. (1971). Mirror, mirror, identity race & protest in Jamaica-Rex Nettleford (book review). Caribbean Quarterly, 17(3), 144–145. Daniel, G. T. (1957). Labour and nationalism in the British Caribbean. The Annals of the American Academy of Political and Social Science, 310(1), 162–171. Dunkley, D.  A. (2011). Hegemony in Post-independence Jamaica. Caribbean Quarterly, 57(2), 1–23. Eaton, G. E. (2011). The Trade Union Education Institute and Rex Nettleford’s philosophical orientation. Caribbean Quarterly, 57(3–4), 1–19. Eisner, G. (1961). Jamaica, 1830–1930: A study in economic growth. Manchester: Manchester University Press. Faber, M. (1964). A “swing” analysis of the Jamaican election of 1962: A note. Social and Economic Studies, 13, 302–310. Gaffar la Guerre, J. (2002). National unity, the Westminster model and governance in the commonwealth Caribbean (pp. 23–31). Governance in the Caribbean. Ghany, H. (1994). The myth of the Westminster model. Caribbean Affairs, 7(3), 62–82.

4  JAMAICA: INDEPENDENCE REALIZED 

89

Girvan, N. (1971). Foreign capital and economic underdevelopment in Jamaica. Mona: Institute of Social and Economic Research, University of the West Indies. Girvan, N. (1976). Corporate imperialism, conflict and expropriation: Essays in transnational corporations and economic nationalism in the third world. Armonk: M.E. Sharpe. Girvan, N. (1980). Swallowing the IMF medicine in the ‘seventies’. Development Dialogue, 2, 55–74. Girvan, N. (2012, August 22). 50 years of In-dependence in Jamaica: Reflections. Delivered at the SALISES 50–50 conference, ‘critical reflections in a time of uncertainty’, Kingston. Girvan, N., Bernal, R., & Hughes, W. (1980). The IMF and the third world: The case of Jamaica, 1974–80. Development Dialogue, 2, 113–155. Go, J. (2003). A globalizing constitutionalism? Views from the postcolony, 1945–2000. International Sociology, 18(1), 71–95. Guerre, J. L. (1971). The Moyne Commission and the West Indian intelligentsia, 1938–39. Journal of Commonwealth & Comparative Politics, 9(2), 134–157. HP. (1950). Background to West Indian Federation. The World Today, 255–264. IMF. (1976). Annual report. International Monetary Fund: Washington, DC. IMF. (1979). Annual report. International Monetary Fund: Washington, DC. Key, V.  O., Jr. (1955). A theory of critical elections. The Journal of Politics, 17(1), 3–18. Lewis, R. (1990). JJ Thomas and political thought in the Caribbean. Caribbean Quarterly, 36(1–2), 46–58. Lewis, R. (2011). “Mirror mirror on the wall/who is the fairest of them all?” Rex Nettleford and the Knotty issue of identity. Caribbean Quarterly, 57(3–4), 33–48. Lindsay, L. (1975). The myth of independence: Middle class politics and non-­ mobilization in Jamaica. Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) working paper, (6). Mackie, L. (1987). The great Marcus Garvey. London: Hansib Publishing (Caribbean), Limited. Manning, M. (2000). Dispatches from the ebony tower: Intellectuals confront the African-American experience. New York: Columbia University Press. Marable, M. (Ed.). (2000). Dispatches from the ebony tower: Intellectuals confront the African American experience. New York: Columbia University Press. Meeks, B. (2000). The political moment in Jamaica: The dimensions of hegemonic dissolution. In M.  Marable (Ed.), Dispatches from the ebony tower: Intellectuals confront the African American experience (pp. 52–74). New York: Columbia University Press. Mordecai, M., & Mordecai, P. (2001). Culture and customs of Jamaica. Westport: Greenwood Publishing Group. Moyne, L., Stubbs, R., Crowdy, R. E., Citrine, W., Mackinnon, P., & Blacklock, M.  G. (1945). West India Royal Commission Report. London, UK: HM Stationery Office.

90 

C. CLARKE AND C. NELSON

Munroe, T. (1972). The politics of constitutional decolonization: Jamaica, 1944–62. Kingston, Institute of Social and Economic Research, University of the West Indies. Munroe, T. (2002). An introduction to politics: Lectures for first-year students. Kingston: University of the West Indies Press. Nettl, J. P. (1967). Political mobilization: A sociological analysis of methods and concepts. London: Faber. Nettleford, R. M. (1970). Mirror, mirror: Identity, race, and protest in Jamaica. Kingston: W. Collins and Sangster (Jamaica). Palmer, C. A. (2014). Freedom’s children: The 1938 labour rebellion and the birth of modern Jamaica. Chapel Hill: UNC Press Books. Pierre, J., & Peters, B. G. (2019). Governance, politics and the state. London: Red Globe Press. Pollitt, C., & Bouckaert, G. (2004). Public management reform: A comparative analysis. Oxford: Oxford University Press. Rhodes, R.  A. (1997). Understanding governance: Policy networks, governance, reflexivity and accountability. Maidenhead: Open University. Robinson, R. V., & Bell, W. (1978). Attitudes towards political independence in Jamaica after twelve years of nationhood. British Journal of Sociology, 208–233. Sewell, S.  C. (1997). British decolonization in the Caribbean: The West Indies Federation. Doctoral dissertation, Oklahoma State University. Springer, H. W. (1962). Reflections on the failure of the first West Indian Federation (p. 66). Cambridge, MA: Center for International Affairs, Harvard University. Stephens, E.  H., & Stephens, J.  D. (1987). The transition to mass parties and ideological politics: The Jamaican experience since 1972. Comparative Political Studies, 19(4), 443–483. Stephens, E. H., & Stephens, J. D. (2017). Democratic socialism in Jamaica: The political movement and social transformation in dependent capitalism. Princeton: Princeton University Press. Wallace, E. (1962). Jamaica, 1830–1930: A study in economic growth. By Gisela Eisner, with a foreword by W. Arthur Lewis. Manchester: Manchester University Press. 1961. pp. VI, 399.50s.-The economy of the West Indies. Ed. GE Cumper. Kingston: Institute of Social and Economic Research, University College of the West Indies. 1960. pp. iv, 273. Canadian Journal of Economics and Political Science/Revue canadienne de economiques et science politique, 28(4), 619–622. Waters, A. (1999). Half the story: The uses of history in Jamaican political discourse. Caribbean quarterly, 45(1), 62–77. Wood, D. C. (Ed.). (2017). Anthropological considerations of production, exchange, vending and tourism. Bingley: Emerald Publishing.

CHAPTER 5

Introducing the International Monetary Fund

Introduction The objective is not to capture or undertake a forensic analysis of the historicity of the IMF as an institution but to focus on key attributes and salient literature that brings to the fore the emerging and dynamic discourse of the Institution that has influenced and determined to degrees the different flavours within development discourse influencing institutions, modalities of practice, relations and conduct. Elements such as ‘context’ are woven into the analysis of texts, to show the relationship between concrete occasional events and more durable social practices. Context can reveal transformation, innovation and change in texts and time as well as having a mediating role in allowing one to connect detailed linguistic and semiotic features of texts with processes of social change on a broader scale.

The International Monetary Fund The International Monetary Fund (IMF) emerged as a macro social actor, in the words of John Maynard Keynes, to seek ‘a common measure, a common standard, and a common rule applicable to each and not irksome to any’ (Igwe 2018) within the context of global governance institutions and within the international financial system when it was created at the United Nations Monetary and Financial Conference, held in Bretton Woods in 1945. Its discourse and practice were influenced by the lingering © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_5

91

92 

C. CLARKE AND C. NELSON

concerns to reconstruct, redesign, rebuild and reengineer the global economy arising from the chaos of war, the Great Depression and stymied international trade. The Bretton Woods System, from within which the IMF emerged as one of the key institutional pillars, represented a compromise between the ideas of the British economist John Maynard Keynes, who wrote a proposal for an International Clearing Union (ICU) as against the US Treasury official Harry Dexter White, who proposed an International Stabilization Fund (ISF). The ‘White Plan’ gained prominence, resulting in the creation of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (the World Bank) and the General Agreement on Tariffs and Trade (GATT) division of responsibilities between the Institutions. The IMF and other Bretton Woods Institutions reflected a compromise between the efforts and approaches of the British and Americans after World War II, whereby the former’s key concern was for an international monetary regime with stability and the latter for the reinvigoration of commerce and industry. The three Bretton Woods Institutions created shaped international economic relations, The International Bank for Reconstruction and Development facilitated the transfer of resources for the reconstruction and rebuilding of Europe. The IMF was created to engender exchange rate stability and being pivotal in establishing the rules for commercial and financial relations amongst the world’s major industrial states. The liberalization of trade was to be driven via the General Agreement on Tariffs and Trade (GATT) to reinvigorate trade, stymied during World War II. As a cooperative, the IMF as a global institution, provides the machinery for consultation and collaboration on international monetary problems by member states and seeks to facilitate the expansion and a balanced growth of international trade. The IMF specifically was responsible for a regime to stabilize the global monetary system governing the movement of finance, monetary transactions and the stabilization of currencies. The Bretton Woods system of monetary management for which the IMF had responsibility, was an example of a fully negotiated monetary order to govern monetary relations among independent nation-states pivoting upon US dollar convertibility. The institution was also expected to further the growth of multilateralism and the orderly conduct of foreign exchange transactions with minimal restrictions. Under the Bretton Woods system the external values of foreign currencies were fixed in relation to the US dollar, whose value in turn, was

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

93

expressed in gold at a price set by the US Congress of US$35 per ounce. A pegged rate or adjustable peg regime in contrast to the floating rates of the 1930s which had engendered crisis and speculation, was put in place whereby countries agreed to fix their exchange rates, tying their currencies to the US dollar pegged exchange rate, with fluctuations allowed between 1% above and below parity. The United States was required to maintain fiscal discipline, hold the net creditor position, ensure that capital markets remained open to private and government parties and stabilize price levels. The Fund became more active at the end of the 1940s and mid-1950s. In 1949 the world realized a devaluation of many currencies in relation to the US dollar. This, of course, was encouraged by the International Monetary Fund. Thirteen of their thirty-member countries were encouraged to devalue their currency as much as 30.5% relative to the US dollar. Another six countries that had no set exchange rate par value also devalued their currency. The reasoning behind the devaluation stemmed from post-­ war distortions in international payments (International Monetary Fund 1950). For a few years, the new system functioned smoothly. Membership increased; more countries drew on the Fund’s resources and the amounts drawn increased. The Fund specialized in making relatively small, short-­ term loans. Repayment was usually prompt and allowed the Fund to recycle its resources (James et al. 1996). By the 1960s, a surplus of US dollars caused by foreign aid, military spending and foreign investment threatened this system, as the United States did not have sufficient gold to cover the volume of dollars in worldwide circulation in addition to fend off speculative attacks, even in the presence of capital controls. Further, with central bankers, failing to perceive the diffusion of the dollar standard and the underlying model, stepped up gold accumulation and put the system under undue pressure. Without a new conception of the monetary mechanism based on total detachment from commodity money. (Cesarano 2006: 191)

The commitment to maintain gold convertibility by the United States, lost credibility by the mid-1960s given that the rest of the world did not want to absorb additional dollars and thus inflation. Surplus countries especially (Germany) were reluctant to revalue in the context of the United States, avoiding devaluation, the latter being reluctant as this would be

94 

C. CLARKE AND C. NELSON

viewed as an admission that their policies lacked credibility. Once controls were removed, inconsistencies surfaced between the interests of the United States and other members, so that the system was only held together only by the intervention of the G-10.1 The price of gold was increased from US$35 to US$38 an ounce, devaluing the US dollar by 7.9% under the terms of the Smithsonian Agreement as compelled by the G-10. Concerns about the limitations of gold and dollars as the sole means of settling international accounts, led to the emergence of the SDR, or ‘special drawing right’, in 1969 affording members of another modality whereby to settle their obligations. SDRs are an interest-bearing, international reserve asset, or unit of account, defined and maintained by the IMF to supplement the international reserves of gold and the US dollar. Member states are assigned SDRs based on the size of their economy and is a component of the membership contribution to the Fund, which determines the capacity to borrow from it. SDRs are not a currency but a unit of account by which member states can exchange in order to settle international accounts. Being used in exchange for other freely-traded currencies of IMF members, the SDRs value is based on a basket of five key international currencies—the US dollar, the euro, the pound, the renmimbi and the Deutsche Mark—which, as the ‘basket’, are reviewed by the IMF every five years. Resources are accessed when a country has a balance of payment deficit and requires foreign currency to pay its international obligations. Members commit to use and accept SDRs, borrowing against their IMF quotas in the event of a crisis requiring them to seek a loan. The maximum amount to be accessed would depend on the quota values of the contributor with receipts denominated in SDRs. Funding for the IMF loans is partially derived from its membership fee, or quota (the price of membership), which is arrived at as a correlation of the member’s size and status in the global economy and the latter also determines voting rights. Twenty-five percent of each country’s quota is paid in the form of SDRs. A member’s quota reflects that country’s financial and organizational relationship with the IMF with subscriptions determined by the size of its economy. Given that membership reflects the 1  The Group of Ten, consists of the eleven leading industrial countries—Belgium, Canada, France, Germany, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and Italy, with the United States being the eleventh.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

95

relative economic position of each country in the world, wealthier economies would provide more resources or income to the IMF and commensurate retain more influence than those countries that contribute less resources and are borrowers accessing IMF loan resources. These dynamics have degrees of resonance in the nature of the decision-making process and response formulation in the accessing of resources in the organization. The First amendment of the Articles on July 28, 1969 signalled the abandonment of the par value system established by the original Articles. The Agreement conveyed the authority to allocate Special Drawing Rights through this Special Drawing Rights Department to members participating in operations and transactions involving SDRs in the Department. As a monetary asset the SDR is freely usable by members in accordance with the Articles and has no reference to the Fund’s policies on conditionality. It is noted that the SDR was previously defined in gold but is now defined in terms of the basket of currencies, as aforementioned, with an exchange rate of members’ currencies determined in reference to the SDR. Members hold currencies and peg their currencies to a particular currency or to the SDR and hold reserves to meet possible challenges in their external account. Members who have floating currencies have a reduced need for the financing of future deficits, but they hold and use reserves to intervene in the exchange rate market to affect the rates of exchange of their own currencies, to convey stability and creditworthiness. Reserves are held beyond the need of a working balance but for other purposes. In a changing economic environment the IMF actor network had to acquire legal powers as part of its discourse and practice enabling it to respond and adapt in the use of its own resources but also to adopt policies and create mechanisms and instruments to address balance of payment problems with conditionality, in response to the needs of its member countries. The Second Amendment of the Articles provided for the SDR to become the principal reserve asset of the International Monetary system. The power of ideas cannot be discounted with respect to the influence of the conceptualizers of the Institution which informed its approach as a throwback to the merger of the ideas of John Maynard Keynes and Dexter White, where, for both of them, the motivating principle for its creation was to engender post-war economic growth and avert autarky and protectionism. The IMF actor network represented the face of multilateralism at the end of World War II with the involvement of the war time allies and their being incorporated into a multilateral financial system.

96 

C. CLARKE AND C. NELSON

With the United States placed in the position of dominance, given that Britain and many other European states were undergoing post-war reconstruction, there was an unspoken dependence upon American ‘largess’ (Boughton 2004). The US dollar became elevated to the status of being an international currency upon which the domestic economy of the United States, as well as the international global political economy, would be reliant and pivot. The financial structure of the IMF was located in Washington, juxtaposed to the influence of the US Treasury, whereby the United States provided the bulk of the loan resources and controlled the decision making surrounding their use and was in effect virtually in control of the global economy. However, by the 1960s, criticism began to emerge in several quarters concerning the IMF’s approach to stabilization especially in Latin America which had harsh repercussions. The strict orthodoxy of the ‘Washington Consensus’ and the tenets employed coupled with the absence of a shared commitment between the IMF and the member governments had a detrimental effect in the absence of social safeguards. This led Brazil in 1962, in the middle of protracted negotiations for an IMF Stand-by Arrangement, to introduce a resolution in the UN that implicitly condemned the IMF for ignoring the structural factors that had led to sustained inflation and called for studies on the subject. The Resolution claimed that inflation in underdeveloped countries is aggravated by urbanization and the incorporation into the market economy of populations used to living in a subsistence economy. As a result, different structural adjustment requirements were needed (Boughton and Lombardi 2009). With the gradual development of Europe and convertibility reestablished, capital flows began to increase and increased even further into the 1970s in light of the recycling of surplus assets to oil-importing sovereign borrowers through large international banks. For example, the fixed exchange rate system ended in 1971 and the Fund had become more involved in the macroeconomic policies of its member states now that the international monetary system had a flexible exchange rate system. In fact, states were even more vulnerable under the current monetary system whenever there were drastic changes in the value of their currencies, as well as that of foreign currencies. This vulnerability became evident during the financial crisis in Mexico as aforementioned in the mid-1990s, and even more so with the Asian financial crisis in the late 1990s that affected so many countries.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

97

1980s Challenges for the IMF The global challenges of the 1980s instigated introspection within the IMF with respect to revisiting its role as managers of the international monetary system commensurate with their emerging role with respect to economic growth and development. In responding to various challenges and change within the global political economy and the need to intervene and respond to crisis, tension was elicited between the Fund’s raison d’être and its primary role and remit as a monetary institution. There was the reluctant acknowledgement by some vis-à-vis the Fund’s emerging role as a participant or gatekeeper, engendering economic development outcomes by precipitating the intervention of other development agencies in developing states, assured by the presence or report from the IMF on their economic status, prior to their engagement. The Managing Director of the IMF, Hendrikus Johannes Witteveen, from the Netherlands, 1973–1978, sought to encourage lending arrangements whereby longer maturities were given on concessional terms to assist developing states, buttressed by support from other organizations. Numerous challenges emerged in the 1980s and into the 1990s especially for developing countries struggling with vulnerabilities of state and governance as well as debt related issues. The increased demand for credit from the IMF and the implications for relations within the Fund were poignant, with respect to metering issues of power and decision-making, regarding the leveraging of the networks of international private credit markets, modalities of access, internal to the membership, use of resources and the need for product differentiation. Other IMF Managing Director’s, Jacques de Larosiere (1970–1987) and Michel Camdessus (1987–2000) were confronted with these issues and the tasks of negotiating and overseeing arrangements that could either enable or deter development for member countries of the developing world. This was against the backdrop of geopolitical narratives, economic turbulence and contests between hegemonic powers leveraging their domestic interests in the fields of politics, economics and finance, even within the context of various Fund arrangements with implications for the member sovereignty. Efforts to raise the resources that the Fund could put into concessional lending to low-income countries, by Michel Camdessus, who assumed the position of Managing Director of the Fund in 1987, is noted. He orchestrated a Summit Meeting in June 1987 involving seven heads of state and

98 

C. CLARKE AND C. NELSON

governments who attended and were solicited to support a significant increase in the resources of the Structural Adjustment Facility (SAF) to respond to the issues in Africa. His efforts led to the creation of the Enhanced Structural Adjustment Facility (ESAF), which offered loans to poor countries at an interest rate of 0.5%, with a maturity of ten  years, financed by grants and loans from industrial countries. The change in lending patterns towards resources being provided to developing countries and low-income countries was exhibited over the period 1950–1989. Between 1950 and 1959 borrowing undertaken by low-income countries was minimal increasing to about 30% of IMF lending in 1989. Between 1960 and 1969, the composition of lending to industrial economies were about 60% with other developing countries utilizing about 30% of IMF lending over the same period. What is noticeable is the stark shift whereby the category of other developing countries began leveraging about 80% IMF resources between 1980 and 1989 compared to less than 10% for industrial countries reflective of turbulence in the global economy and vulnerabilities within these developing economies requiring that they solicit interventions from the IMF (Boughton 2001).

Surveillance One of the persistent remits of the Fund is the obligation of ‘surveillance’ originating in the final report of the Committee of Twenty in June 1974 and also reflected in the Amendment to the Articles of the IMF Agreement in 1978. The IMF is responsible to oversee the international monetary system which involves monitoring the economic and financial policies of its member countries. Article IV Consultations are required by Article IV of the IMF’s Articles of Agreement to which all members are signatory. The purpose of the Article IV surveillance is to identify risks and vulnerabilities that have the potential to exacerbate into crisis and crises of contagion. A consistent rationale is that systemic stability is most effectively achieved by each member adopting policies that promote its own balance of payments stability and domestic stability. Of consideration is the potential interactions between the real economy and the financial sector for possible spillovers and contagion risks. Policy advice is also provided to help mitigate and avert the emergence of crisis.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

99

Surveillance is undertaken on a bilateral or country basis as well as a regionally. Country surveillance services are an ongoing process with individual member countries whereby the team’s report on the outcomes are discussed with the Executive Board of the IMF and eventually transmitted to the country’s government. This monitoring of the economies aims to provide policy advice with respect to any weaknesses that are identified that could lead to financial or economic instability. The IMF teams examine exchange rate regimes, monetary and fiscal policies and the establishing of coherence in these areas inclusive of financial sector issues and assessments of risks and vulnerabilities. These are conducted by the surveillance team with a view to determine the strengths and weaknesses of countries’ economic and financial policies. The IMF has also have increased the level of transparency of the process, in that, country authorities at the end of their country surveillance and meetings produce a press release which summarizes the outcomes of the staff surveillance and discussions (Lavigne and Vasishtha 2009). In retrospect of the process, one critique highlighted that the quality of the surveillance that unfolds can vary among the member countries. On one occasion the IMF warned emerging markets about the risks of overheating and unsustainable debt accumulation, risky financial practices and credit booms. A similar message was not afforded the advanced economies with similar vulnerabilities and were only identified in the context of multilateral surveillance over the period. Similar concerns were not expressed in the context of bilateral surveillance discussions particularly in the advanced economies (Dhar 2010). Other concerns were that the IMF policy prescriptions for many countries on financial sector issues seemed to ‘champion’ the approach of the United States and the United Kingdom. Comparatively, the important financial centres in the United States and the United Kingdom were considered to be upbeat (International Monetary Fund Staff 2011). In 2007 the Decision, titled ‘Bilateral Surveillance over Members’ Policies’ (the ‘2007 Decision’), was adopted in that there had been significant developments in the global economy that highlighted the extent of trade and financial interconnections and integration and the potential benefits and risks of spill overs across national borders. This emphasized the importance of better integrating knowledge gained from bilateral and multilateral surveillance and the adoption of an integrated surveillance decision which was warranted (IMF Fund Staff 2011).

100 

C. CLARKE AND C. NELSON

Given the degree of interconnectedness of the global economies the purpose is to have ongoing processes of regional surveillance that would provide early warnings and advice that would stem financial and economic instability with can have global repercussions or implications for global contagion. Based on the experience of the Asian financial crisis, institutional and structural issues have also been included in the analyses against the backdrop of assessing the adherence to internationally recognized standards and codes and that which contributes to central bank independence, financial sector regulation, policy transparency and overall accountability. From the consultations they would seek to ensure that lessons of international experience can be used to guide national and regional economic policies.

Power Plays In the 1970s and 1980s the Fund was associated with the recycling process of surplus petrodollars. It had a major role in capital-account lending to ‘recycle’ the revenues of oil-producing countries after the oil price increase. Its role as adviser to developing countries on macroeconomic adjustment increased. That advice was tied to lending; the Fund made loans to ease the burden of adjustment to the structural and macroeconomic reforms it advocated. Before 1973 the United States was engaged in foreign direct investment involving the exploitation of raw materials and resources for example the bauxite industry in Jamaica, but they were involved in certain markets telecommunications and automobiles in Europe and Latin America. The US interest became vulnerable in the period of the Cold War, where there was an intense struggle against the spread of communism throughout the world. The United States was involved in recycling surplus petrodollars through the New  York investment banks throughout the world. In the case of Mexico, the Volcker shock drove Mexico into default in 1982–1984. Between 1974 to 1981 Latin America economies experienced an average annual rate of growth of four-point 1% petrodollars from the New York investment banks enabled financing of public sector activity the purchasing of real estate. Latin America had several authoritarian regimes who are credited with the economy growth. The growth in Latin America came to a halt as a result of the actions of the Federal Reserve chairman Paul Volcker, who unilaterally adjusted the interest rate, which had a threefold effect.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

101

Firstly, the US economy went into a recession when commodity prices fell, and Latin America felt the impact in terms of the reversal of capital flows. This contraction the economies of Latin America led to economic depression start net growth currency and banking crisis as well as debt accumulation on their loan resources. Capital inflows shifted their modalities towards US-dollar-denominated instruments. The undermining of the military dictatorships in Latin America later collapsed with the severe downturn engendering a shift towards democratically elected governments within the region. The Reagan administration which leveraged the powers of the US Treasury and the IMF intervened and was successful in rolling over the debt, which was contingent upon Mexico becoming engaged in neoliberal reforms, whereby the liberalization of international credit and financial markets as a strategy, became actively promoted (Harvey 2007). In 1982 the IMF expanded its lending especially to countries experiencing high capital outflows. The IMF’s main function at that time was to lend to members in order for the countries to pay off their existing debt, some of the debt was to the Fund and also commercial banks. It increased lending significantly in the context of the financial distress known as the ‘Latin American debt crisis’. The result was that Latin America’s debt rose, the creditor banks were protected and the debtor countries continued to suffer under a rising debt burden and falling income per capita. Harvey (2007)notes Stiglitz reference to the ‘purge’ of all Keynesian influence from the IMF in 1982 and states: The IMF and the World Bank thereafter became Centers for the propagation and enforcement of ‘free market fundamentalism ‘under neoliberal orthodoxy in return for debt rescheduling indebted countries were required to implement institutional reforms, such as cuts in welfare expenditures more flexible labor market laws and privatization. This was ‘structural adjustment’ invented. Mexico was one of the first states drawn into what was going to become the growing column of neoliberal state apparatus worldwide. (Harvey 2007: 29)

The Washington Consensus In 1989, John Williamson a British economist undertaking interventions in Mexico and Latin America, identified ten ‘policy instruments,’ a set of free market policies and reforms that was agreed as being necessary in

102 

C. CLARKE AND C. NELSON

Latin America which had emerged from his consultations. The term was not originally intended as a policy prescription for development to be used widely by countries generally, but was specific to the context of Latin America, being desirable to be implemented to aid its development. These policies rooted in neoliberalism included financial sector liberalization, deregulation of impediments to free entry and exit in markets, trade liberalization, privatization of state-owned operations and exchange rate competitiveness. Others included, openness to foreign direct investment, legal security for property rights, market-determined interest rates, fiscal discipline and tax reform. Known as the ‘Washington Consensus’ because of the agreement from Washington-based financial institutions such as the IMF and US Treasury, this was a set of ten economic principles aimed at improving critical economic shortfalls within developing countries. Advocacy for the application of this set of neoliberal economic policies was spread by the Bretton Woods Institutions especially by the World Bank, whereby they entered into the economic policy and development schedules of many developing countries in the 1970s. Coined the ‘Washington Consensus’ these principles were widely accepted by the IMF and was integrated into their policy prescriptions for developing countries throughout the 1990s. Over time, the term was taken and became widely used in a pejorative way to reflect a set of ten neoliberal economic policies and dogmatic belief that developing countries were encouraged to embrace. These policies were deemed as being compulsory to adopt as a development strategy that would result in economic growth trickling down to the benefit of the economy. The Washington Consensus reflects the set of free market policies that became the standard package of advice attached to loans of the IMF and World Bank. The term was originally not written as a policy prescription for development per se: it was a list of policies that were held by Washington to be widely desirable in Latin America in their context in 1989.  The Bretton Woods Institutions in many ways have shifted from the purist neoliberalism followed in the early years and led more so by the World Bank, has shifted towards a synthesis reflected in part, in the Post-Washington Consensus (PWC) which underlined the necessity for participation from different institutions in different economies and identified circumstances in which government market interventions can play useful roles. Poverty and governance issues began to be more infused into the discourse and practice of these institutions with the

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

103

recognition of the complementarity of state and market in the economy (Onis and Senses 2003) and that the institutional capacity of the state has implications for performance in order to enable the trickle-down effects engendering development. Many developing countries, especially in Latin America, had suffered hyperinflation during the 1980s. Therefore, a monetarist approach was recommended, whereby government spending is reduced and interest rates are raised to reduce the money supply. The implementation of these principles led to the collapse of many developing countries throughout the world and the IMF was widely blamed for their lack of appropriate response to the financial sector crisis many of its members experienced in the 1990s. A study by Khan and Sharma (2003) highlights the challenge, in the aftermath of exploits into structural adjustment and implementation of neoliberal policy prescriptions, of balancing country ownership and conditionality and efforts to maximize ownership to enhance and enable the success and effectiveness of IMF country interventions. Pastor  (1987) found that Fund programmes in Latin America between 1965–1981, demonstrated a significant improvement on the balance of payments, but with increasing effects on the rate of inflation, an insignificant change in the current account, and a negative effect on output.

Capital Flows With respect to capital flows, post WWII, the financial flows from the private sector was limited and the emphasis was upon trade flows financed by trade credits. Cross border portfolio flows were considered to have the potential of exerting a destabilizing effect on economies despite being a potential source of investment capital. The proponents of the IMF held the view that these capital flows should be restricted especially where they seem to be destabilizing hence the IMF was empowered to prevent such. Consequently, if a member was non-compliant, they would become ineligible to use Fund resources. Countries were afforded light capital controls and payments for transactions on the current account were not restricted into the 1950s. The 1990s saw heightened activity where cross-border flows became an essential source of finance for emerging market as well as developed economies, furthering the increasing complexity of international financial markets making them difficult to measure or control attributed in part, to their size. The imposition of capital controls was never encouraged because the IMF was a proponent of the belief in the benefits of open capital markets.

104 

C. CLARKE AND C. NELSON

Open capital markets facilitated faster growth, rising standards of living and better portfolio diversification for investors. Thus, the position, that liberalized capital controls in the long run and long-term capital movements, enable the maintenance of equilibrium in the balance of payments. There were even stronger beliefs that the opening of the capital account would increase the overall efficiency of the domestic financial system by the introduction of market competition that would help to stimulate innovation (Fischer 1997). Guitián (1996) argued that capital flows were not a feature of the global economy in the context of recovering from World War II when the IMF instilled the code of conduct prescribed in its Articles of Agreement. In that context the IMF had placed the emphasis upon encouraging trade flows and the resumption of the exchanges of the current and capital accounts, that had been disrupted during the War. The logic that informed the inclusion in the Articles of Agreement of the Fund, which placed restrictions on international capital flows was essentially ‘time sensitive’ so given the characteristics of flows in the 1990s this restriction was deemed no longer necessary. These ideas led to initiatives and the proposal in 1995 to amend the Articles that would give the IMF a degree of authority over international capital flows which would signal a substantial modification of the institutional design drafted in the post-World War 2 era. Consequently, member countries would have to seek the Fund’s approval for temporary records the capital controls before they could remove them. Liberalization was seen as being inevitable and having a desirable impact on the economic prospects of countries. It was heralded as a mechanism of economic growth, ‘welfare enhancing’ and also a disciplinary mechanism in terms of enforcing sustainable economic policies. Consequently, what was identified by the IMF staff was a clear positive causal relationship between liberalization and economic growth. Globalization of financial markets was recognized as being positive as an engine driving global growth afforded by liberalization. Liberalization was deemed interactive in the sense that there is a presumption embedded in the idea that international and domestic financial liberalization are mutually reinforcing so there are implications for sequencing liberalization. This is accompanied by a standardization argument, that strengthening the regulation and supervision of domestic financial markets and institutions that interface with them, are critical prerequisites for successful liberalization. There was a further perspective that because they were mutually forcing that they could actually proceed simultaneously rather than being sequenced, providing an inducement to improve regulations supervising the domestic sector (Moschella 2010).

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

105

Commensurate with these emerging positions, was the normative idea of orderly liberalization. Specifically, relating to capital controls in that, once instituted, how they are progressively diminished or metered in terms of effect, modality and speed, not just hastily removed. This encroaches on issues of the policy modalities used to manage the process and tailoring such to the environment as well as the determination of its desirability or inevitability in the context of economic policy and the expected benefits and outcomes. The policy idea of orderly liberalization if embraced as part of the management remit of the IMF required it to become institutionalized by an amendment of the International Monetary Fund’s (IMF’s) Articles that would have extended the Fund’s mission to include policies surrounding the liberalization of capital flows. Moschella (2009) explored the issues around the inability of the IMF to obtain an amendment of its Articles of Agreement to enable acceptance and management of the policy of orderly liberalization with a view for it to become institutionalized as a part of the policy and management remit of the IMF. External actors, such as those of the Wall Street-US Treasury Complex (Wade and Veneroso 1998), were supportive, who had vested interest in these functions being ascribed to the Fund. Internal actors of the Fund were complicit with the initiative, inclusive of the staff trained in ‘neoliberal’ departments (Moschella 2009) who would be predisposed to the idea, along with actors within the organizational culture, as well as those top actors in the hierarchy who were already empowered, not requiring an instruction from principals to do so. These were elicited to converge and provide the momentum for the idea to materialize in the form of the Amendment sought. There were degrees of institutional implicitness into which the workers were acculturated involving institutional knowledge and behaviours (Iedema 1998) which did not yield expected outcomes in terms of support. Several developing countries were supportive, accessing and benefiting from global financial integration commensurate with the flows of capital required to engender their development. Consequently, a number of these countries, for example, those in Southeast Asia receiving such flows, had benefits accruing to them. However, incidents of massive volatility occurred in the period 1997–1999, affecting private capital movements in market economies like Mexico, resulting in the inability of the latter to service its loan obligations with contagion effects in other parts of South America. But there was

106 

C. CLARKE AND C. NELSON

none so blatant as in the South East Asian crisis of contagion in 1997 which demonstrated the risks of free capital flows and in the aftermath, lessons learned with respect to management of that risk. The Mexican Financial Crisis Mexico was unable to fulfil its repayment obligations in August 1982 which led to a debt crisis which implicated other Latin American and African countries. Early concerns were with regard to whether the issue was one of illiquidity or insolvency or an issue where there was a decline in the willingness of banks to lend due to the debt service issues of another country. In managing this debt crisis, the IMF began to assess its own weaknesses suggested in relation to the initial forecast, the likelihood of resumption of sustained output and growth and for meaningful reductions in the debt service ratios which were considered in retrospect, as being optimistic. Asian Financial Crisis A crisis for which the International Monetary Fund is widely criticized, was the Asian crisis of contagion in 1997 and 1998. The IMF was tasked with the role of preventing financial crisis whereby the IMF was adjudged as failing in its handling of the crisis especially coming in the aftermath of other forms of crisis in Latin America and Russia. The IMF is generally blamed for treating the Asian crisis as if it was a run-of-the-mill balanceof-payments crisis caused by excess aggregate domestic demand when in fact, the problems were rooted in the policies they forced upon these countries. In ignorance, the specificities of the affected countries’ economies were disregarded. As Sachs (1997) criticized, the IMF threw together a draconian programme for South Korea, without a deep knowledge of the country’s financial system and without any clue as to how to approach the problems as a result. This is similar to the critique of policies in other developing countries during the period. A lack of understanding of the country’s economy and ‘one size fits all’ application of remedial policies left several countries in even worse positions than before interacting with the Fund. The Fund has also been criticized for not realizing that the Asian crisis was a liquidity crisis, similar to bank runs. Incidentally, the Fund has also been criticized for inciting panic about the macroeconomic stability of these countries’

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

107

governments, causing the runs in the first place (Sachs 1997). With these interpretations and diagnostics, fiscal austerity and rising interest rates, which were the recommendations of the IMF to these countries, could only deepen the crisis (which it did). Another root cause was identified as financial liberalization. Financial liberalization facilitated the movement of capital across borders. The East Asian Economies liberalized their financial systems thereby allowing a huge influx of foreign capital. Given that most of these countries suffered trade deficits, the capital was spent mainly on infrastructural development which means that enough returns could not be realized to cover the current account deficits. As such the current account deficits had to be financed with international reserves. Stiglitz (2000) highlighted that at the peak of the Asian crisis, some countries faced capital outflows of more than 10% of GDP. In erring, the IMF prescribed a mix of fiscal austerity and high interest rates for the countries in the speculators’ firing line. Calling on countries running healthy budget surpluses to tighten their belts only intensified the recession. Meanwhile, raising interest rates to protect their currencies did not succeed in warding off the speculators and simply intensified the pain for domestic firms (Denny 2002). An option that was available to the International Monetary Fund was to implement a bankruptcy law that could have threatened the interests of the lenders and encouraged them to not withdraw capital, potentially preventing the crisis. The rationale for not probing this course of action was missed. The 1997 Asian crisis and the contagion effect it had on the countries in that region, in particular South Korea the most advanced state in the region was devastating (Park et al. 2013). The IMF thought it crucial to intervene and provided assistance by giving them a US$40 billion loan under particular conditions. It is important to note that such a loan was unheard of thus far and that the requisites for the loan had caused humiliation among South Korean officials. This event raised the eyebrows of many conservative observers who saw this as too much money being lent and were puzzled by the deep interference of the IMF in their affairs (Wyplosz 2005). Having borrowed from the Fund, the Asian countries were forced to adopt restrictive policies that stifled growth, led to extreme unemployment and poverty levels and eventually caused a recession by contagion (De Carvalho 2000). Uchendu (2003) notes that in order to contain contagion arising from capital account flow problems actions would include:

108 

C. CLARKE AND C. NELSON

( i) strengthening the financial sector in developing countries, (ii) improving bilateral and multilateral surveillance, (iii) making the IMF a genuine lender of last resort, (iv) introducing mechanisms for orderly negotiations with private creditors, (v) managing the social consequences of crisis and (vi) creating an internationally agreed regime for restrictions on capital account flows. During this crisis (1997–1998) the IMF provided loans in excess of $36 billion to support stabilization policies and structural reforms in Indonesia, Thailand and Korea (International Monetary Fund 2019: 32). The IMF subsequently qualified its position by withdrawing its advocacy for the amendment of its Articles but advocates that countries should possess the necessary regulatory and prudential frameworks for the adequate supervision within their domestic economies given the dangers of sudden outflows but also the risks associated with capital inflows. Furthermore, that the process should be in an orderly one to be adequately sequenced comprehensively, in concert with other economic and financial activity, exchange rate stability and monetary policy etc. prefacing the need for a comprehensive understanding of context. Overall the development of private international capital markets in the 1970s evidenced the potential to contribute both to long-term growth and to short-term instability with sometimes negative effects in the struggle to reduce instability. Challenges resulted in the demand for interventions of the Fund and other international financial institutions sometimes prior to chaos and more times afterwards to resolve the chaos that ensued. Crisis arose after the oil exporting countries having accumulated dollar reserves deposited them in the commercial banking sector in industrial countries such as the United States. Whereby these resources were subsequently made accessible with favourable interest rates to developing countries and the newly industrialized economies facilitating the recycling of resources that were generated from the oil shocks of 1973–1974 and 1979–1980. The favourable access and loan arrangements, subsequently became unserviceable as the drop in the prices of commodities on the global market upon which these countries relied as income collapsed. The accumulation of debt for these economies was signalled as early as 1977 despite the early positive developments.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

109

This furthered the creation of instruments within the IMF, tailored to respond by the provision of resources to treat with addressing the emerging risks of macroeconomic instability and sovereign collapse for developing countries saddled with debt. Challenges and criticisms with respect to the reluctant recognition of the ineptitude of ‘one size fits all’ policy approaches uniformly applied to extricate developing countries from multidimensional national maladies has resulted after several years in diverse instruments created as avenues of access to resources to enable the required recovery and potential for economic transformation.

Instruments The IMF has evolved since it was founded to administer the international monetary system. It has broadened its tasks to exercise surveillance, periodic consultations to its member countries, economic analysis, research, policy advice, technical assistance and lending subject to conditionality. As it relates to developing states the IMF have issued different structural adjustments that have impacted the way it operates in developing states.

Extended Fund Facility (EFF) The Extended Fund facility (EFF) was created in 1974 but was not operationalized until the late 1980s, becoming one of the key lending instruments into the 1990s. Designed for countries experiencing serious imbalances because of structural deficiencies reflected in slow growth and a weak balance-of-payment position, the EFF had longer repayment periods than most Fund arrangements. This was attributed to the prevalence of deep-rooted structural characteristics that had to be corrected requiring longer time periods to be allotted. Repayment schedules were longer, between 4.5 and 10 years in duration, with equal semi-annual instalments which contrasts with the Stand-By Arrangement with a repayment period of 3.25–5 years. The EFF is characterized by support in the form of comprehensive programmes and the implementation of policies to correct structural imbalances, being subject to frequent reviews over the lending cycle whilst addressing macro-economic as well as institutional weaknesses with specific conditionalities focused on structural reform.

110 

C. CLARKE AND C. NELSON

Enhanced Structural Adjustment Facility (ESAF) The Enhanced Structural Adjustment Facility (ESAF) of 1987, involved the construction of programmes addressing the policy frameworks of recipient governments designed jointly between the IMF and World Bank with initially, minimal involvement and participation of the recipient government which process over time, became a little more inclusive. In 1999, the ESAF was replaced by the Poverty Reduction and Growth Facility (PRGF), which aims at sustained poverty reducing growth (Fontaine 2005).

Stand-by Arrangement (SBA) For emerging market countries, the Stand-by Arrangement or (SBA) is the most dominant lending instrument of the IMF. The SBA is used to assist countries’ balance of payment problems and on financing terms more amicable than that offered by private market sources. The large number of financial crises in 2008 as well as the increase in demand from a number of countries requiring such financial assistance, the IMF resumed the use of this instrument. The SBA was upgraded in 2009 in terms of enhancing its flexibility, doubling the funds made available to member states, streamlining the framework with a view to make it was more responsive to the needs of recipients. In the early 1990s these three facilities composed about 75% of the total value of the lending, whereby the EFF and the ESAF have been targeted to the medium-term lending, providing assistance in the context of a three- to four-year support to middle-income countries and three- to five-year programmes in low-income countries on, for example, the African continent. Boughton (2011: 11) notes the increase in IMF lending, more than tripling to low-income countries and increasing more than fourfold to other developing countries between 1980 and 1989 compared to 1970–1979. This contrasts with the stark reduction in lending to industrial economies between 1980 and 1989 to about one-tenth of that of 1970–1979, commensurate with skewed lending towards developing countries.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

111

Structural Adjustment Facility (SAF) In 1986, the Structural Adjustment Facility (SAF) was established to provide balance of payments support on concessional terms to low-income developing countries. The SAF provides loans to support the medium-­ term macroeconomic and structural adjustment programmes of these countries. Structural adjustment policies and the programmes implemented in developing countries by the IMF has always been an area of contention.

Conditionality The Fund’s involvement is contingent upon the implementation of certain economic policy targets which provides the basis on which the country receives necessary financing and the Fund’s involvement and support in the country. The value of conditionality relates to ensuring that two aspects align, namely the Fund’s involvement and financing thereafter and the country’s commitment to implement to ensure continuity which must coincide. Conditionality has been a part of the policies and programming of the Fund from as early as the mid-1950s and has notably, expanded specifically in response to the challenges of the 1980s and 1990s. The impetus of the Fund in these areas reside in trying to ensure that key programme objectives and the policy parameters are adequately covered so as to minimize the intrusion into the national policy decision-­ making processes. In 1979, Guidelines on Conditionality promulgated and underscored the principle of parsimony and limiting performance criteria to the minimum number needed to evaluate the policy implementation process. Recognition was also made of the need to consider and the factor in, the country’s social and political objectives and its economic priorities within the context of its unique circumstance. It is noted that IMF conditionality came into existence on a gradual basis as the Fund’s first loan to France in 1947 involved no policy conditions but these forms of obligations began to be applied in 1954. Evidence has been shown to the contrary that since the 1990s almost all programmes included elements of structural conditionality as well as a major expansion of specific to structural reforms and structural benchmarks commensurate with an increase in the number of performance criteria. Conditionality itself has been disaggregated into allocations of performance criteria, prior actions and benchmark targets. Copelovitch (2010: 18) portrayed that there had

112 

C. CLARKE AND C. NELSON

been variable increases in the average number of conditions—benchmark, prior actions and performance components—by type for non-concessional loans between 1983 and 2003. For example, the percentage benchmark component had increased as well as the prior actions components especially since 1999 as a portion of the overall conditionality. The performance component of IMF credits rose from about six in 1981 to ten in 1986; the proportion of credits with eleven or more performance criteria rose from about 5% in 1982 to about 68% in 1990. Greater emphasis had also been placed overall upon performance as the performance component in the 1980s made up about 70% of the entire conditionality compared to being about 50% or less in the years 2000 and beyond. Trends from 50% to 40% with respect to the benchmark component as a proportion of conditionality persisted from 1999 to 2002. Conditionality is also hinged to the meaning of ‘appropriate policy environment’ in specific programmes, which provides connectivity between policy performance and the continuing or discontinued flow of financial assistance. It also involves a meeting of the minds and interests in that, for the borrowing country, the parameters for assessing programme implementation are clearly advanced from inception so that the country has a degree of assurance that loan obligations will be met by the guarantee of resource flows. In contrast the IMF satisfies its obligations to shareholders that resources have been used effectively and measures are in place for subsequent repayment. Conditionality, and its nuances are dependent upon the country, context and arguably influenced by national interests of geopolitics, donor countries and their corporate affiliates which can render a veil of irregularity and even inconsistency of application and resultant effect. The determination of appropriateness in terms of programmes pursued, policy configurations and specific design carries a degree of obscurity, though directly hinged to specific programme outcomes and between policy performance targets to ensure the continued flow of financial assistance. Conditionality serves as an instrument of direction whereby scarce resources are directed to those countries that have demonstrated a commitment through participation and ownership of the design, expressed by the provisioning of the requisite infrastructure so that resources can be used for the betterment of the country. Uchendu (2003) makes the observation that because the IMF has prescribed corrective measures which are harsh in terms of fiscal and monetary policy actions, to the ordinary citizen they seemed to personify the

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

113

source of their hardship and the ‘sufferation’ that they face. Consequently, these institutions, namely the IMF and the World Bank are deemed quite unpopular within these countries. He takes the position that governments choose to implement these policies and are in tacit agreement with the World Bank and the Fund. If the measures are successful, then the governments themselves will take the credit. But if not, in contrast they blame the Institutions for the hardship, protecting and absolving themselves from blame and the political fallout that could ensue. He uses the analogy of the doctor-patient relationship, likening the patient to countries in dire economic and financial crisis who are given a prescription for medication from the doctor which may be bitter in taste. The patient has a choice and can swallow the pills and recover or discard the medicine if they so choose. The health of the patient is dependent upon taking the medicine or if not it will be to their own detriment. Previous studies have found, for example, that adjustment policies advocated by the IMF and the World Bank during the 1980s worsened the poverty levels in many countries in sub-Saharan Africa and Latin America (Stewart 1995; Huber et al. 2006; Woods 2006). For a long time, structural adjustment programmes have been criticized for making excessive demands of austerity in the recipient country in return for financial aid. Such criticisms have been less pronounced in recent years, notably since 2009, when the IMF’s SBA policies were modified to be more responsive to the recipient countries’ needs. One could argue that a certain degree of tension exists especially in relation to governance in such fora because the polarity of interests that obtain and concerns over potential losses. The ‘borrowers’ need to access resources in terms that minimizes their risk of loss in terms of their economic stability and holding the reins of governance vis-à-vis the ‘creditors’ requiring assurances that they will recover their resources with profit and no loss. An essence of polarity between the developed and developing countries seeking their interests within the institutional framework and bureaucracy of the Fund was displayed within the context of negotiation and the arrangements brokered between unequal parties. The networking of different interests between those accessing and those providing accessibility comes to the surface, more so in times of global crisis and market failure where network linkages extend into the vulnerable networks of the domestic spheres. Arrangements brokered have implications for the tenuous connectivity’s of developing country government recipients straining to retain their networks of power and

114 

C. CLARKE AND C. NELSON

preserve relations that undergird the stability of their domestic networks of governance, society and the economy. Data suggests that between 1970s and the 1980s the average overall use of IMF credit increased by 21% in the former and over 22% (Taqwaamani 2014).

Social Dimension Sigrun I.  Skogly (1993: 754) points out that ‘the success of economic development cannot be measured purely on the basis of economic factors, but necessarily must be seen in relation to non-economic factors.’ Throughout most of their history, international financial institutions have focused more on the economic growth of states, without the necessary attention to the progress of the citizens in those states. However, their focus on addressing poverty alleviation as an important aspect of economic development has increased recently for at least two reasons. First, the increase in trade and the further integration of markets has affected living standards, which eventually translates to affecting the macroeconomic position of the institutions’ member states. Blackmon (2008), notes shifts in the policies of the International Monetary Fund (IMF) and the World Bank which culminated in new frameworks for poverty-­ alleviating initiatives. Other influences include the impact of new perspectives and conceptualizations as to what development is and what it encapsulates from the perspective of the citizen or individual. Development thought that captures new dimensions of the social experientially, such as the ‘capability approach’ and ‘development as freedom’ put forward by Amartya Sen (2001) and others. The tacit recognition acknowledgement that development is not only an economic phenomenon but is multidimensional capturing wider concerns translating to the quality of life and accessing institutions that promote human dignity supported by good governance and socio-economic and political systems that engender increase in the standard and quality of life. The introduction of the Heavily Indebted Poor Countries Initiative (HIPC) in 1996 as well as the subsequent broadening and expanding of this programme into the Enhanced HIPC Initiative coupled with the implementation of the Poverty Reduction Strategy Papers in 1999, were some of the strongest initiatives recognizing the need to address poverty and related social dimensions in the poorest countries. Second, one of the strongest criticisms of the International Financial Institutions (IFIs), which are usually centred on the International Monetary Fund (IMF) and the World Bank, are that through their

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

115

economic policies, they have actually worsened the poverty situation for many people in the developing countries. Reforms were effected in the World Bank as the result of changes in the interests and norms in the organization of the Bank becoming more open to non-governmental organizations (NGOs) (Blackmon 2008) having  engaged in ‘an important restructuring process’ and in the latter part of the 1990s to include a greater focus on participation and social development (O’brien et  al. 2000: 47). In comparison in context, there was also evidence to indicate that the IMF had been unreceptive to a dialogue with social movements due to its ‘institutional culture’ (O’brien et al. 2000: 160). Various topical trust funds such as the Trust Fund for Managing Natural Resources, have since been created by the IMF as organizer and manager of these resources to assist in specialized areas and themes.

Internal Dynamics Copelovitch (2010) posits that the IMF is an agent directed by a collective principal and therefore the interests of all the leading member governments on the IMF executive board exercise influence upon the IMF programmes, dispelling the alleged constant that it is not nearly an outlet for the United States to display its hegemony as is assumed. Consequently, the preferences and design reflect a degree of heterogeneity. There are politics and issues of power when considering the relationships between the IMF staff and their interaction in turn with the collective principal of the board. Responsiveness would be varied according to the heterogeneous representation of actors within the social ordering of practices at the points of their interface and articulation within the genres of their knowledge and ability to practically fulfil the obligations requested. The nature of the interaction within connectivities of interests to be satisfied, also in a collective sense, has implications for the inclusions of the programmes that are designed as well as the number and degree of rigour of the conditionalities that will be afforded each arrangement brokered. What also obtains is also a function of time, space and context in the formulation of variations within programme design and the intensity or lack thereof of the components of the conditionality and depth of rigour that they contain. Conditionality has extended into areas not directly related to balance of payments having transcended being part of the genre and practice of several policy domains.

116 

C. CLARKE AND C. NELSON

There are occasions when there is an impasse between the donors of the board as against the IMF staff and the fact that there are issues concerning moral hazard that certain types of programmes that are approved maybe considered as bailouts (Copelovitch 2010).Consequently, compromises have to be found in the reining in of interests and related discursive behaviour and practice to enable the network of relations to hold. This is reflected in part by joint decision making and consultation along an agreed path as prescribed by the Articles and commensurate discourse and practice afforded under the institutional framework of operations of the specific programmes themselves. The heterogeneity within the membership of the IMF board actor network entails members who are part of other networks and relational networks ancillary to the board whose interests they may also represent on the board considering the country context. These heterogeneous networks created, have relations and interactions that are both material, involving people, ideas and technologies, being hybrids of the social technical and personal (Latour 1999; Williams-Jones and Graham 2003). These adjunct networks to which the board actor network members are associated have multiple interests that have to be served through the avenues of negotiation and decision making enabling the translation of interests within the network. The response in turn, has implications for the degree of connectivity, efficiency and output of the network of relations within and for external deliverables of Fund operations. At Bretton Woods, actor network relations were established according to connectivity’s of economic and political power born out of the historical context of post-WWII events. As one of the creative outcomes to address weaknesses in the functioning of the global political economy, specific to being a mechanism to reignite growth and development in an autarkic, post-war reconstruction context, the institution of the IMF was conceived and positioned as a macro social actor, embodying the ideas and ideologies associated with neoliberalism, with connectivity’s within the networks of the global political economy. Emerging as a macro social actor, the IMF engaged in the effective ordering and management of the monetary and economic affairs throughout the world. As aforementioned, it embodies a discourse and practice, informed by the economic and political knowledge and information of the day and as prescribed in the Articles of Agreement and subsequent Amendments. As macro social actor, the IMF, is hegemonic as the dominant discourse or authority with respect to economic and monetary

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

117

management of the global economy and commensurate information, enjoying ‘black-boxed’ stability, with social practices seeking to become inculcated in global domains being incorporated into its network. Inscripted by the Articles of Agreement, the IMF is afforded a discourse and practice which is inculcated within the network of relations through the modality of various programmes undertaken within country networks of the world. These have the intent to encourage development outcomes through the inculcation of practices and changing the discourse and practice of the client countries with respect to its management and ordering of the economic, monetary and growth parameters and practices, as it interfaces within the global political economy actor network, to order and enhance economic growth. The established discourse and practice of country actors begin to erode in favour of replacing its indigenous elements and or adopting IMF discourse. But this is not without hegemonic struggle between IMF discourse and the accepted and established practices followed in the country over the years, being played out within the realms of the various sectors of the economy whose discourse and practice at multiple levels in turn are implicated for change,  with the entrance of the ‘new’ elements of IMF discourse and social practices.

Bibliography Best, J. (2012). Ambiguity and uncertainty in international organizations: A history of debating IMF conditionality. International Studies Quarterly, 56(4), 674–688. Blackmon, P. (2008). Rethinking poverty through the eyes of the International Monetary Fund and the World Bank. International Studies Review, 10(2), 179–202. Boughton, M. J. M. (2001). Silent revolution: The International Monetary Fund, 1979–1989. Washington, DC: International Monetary Fund. Boughton, M. J. M. (2004). The IMF and the force of history: Ten events and ten ideas that have shaped the institution (No. 4-75). Washington, DC: International Monetary Fund. Boughton, J. M. (2011). Jacques J. Polak and the evolution of the international monetary system. IMF Economic Review, 59(2), 379–399. Boughton, J. M., & Lombardi, D. (Eds.). (2009). Finance, development, and the IMF. Oxford: Oxford University Press.

118 

C. CLARKE AND C. NELSON

Broome, A., & Seabrooke, L. (2007). Seeing like the IMF: Institutional change in small open economies. Review of International Political Economy, 14(4), 576–601. Cesarano, F. (2006). Monetary theory and Bretton Woods. The construction of an international monetary order. New York: Cambridge University Press. Chu, K.  Y., & Gupta, S. (1998). Social safety nets: Issues and recent experiences. Washington, DC: International Monetary Fund. Chwieroth, J.  M. (2007). Testing and measuring the role of ideas: The case of neoliberalism in the International Monetary Fund. International Studies Quarterly, 51(1), 5–30. Copelovitch, M. S. (2010). The International Monetary Fund in the global economy: Banks, bonds, and bailouts. Cambridge/New York: Cambridge University Press. De Carvalho, F. J. C. (2000). The IMF as crisis manager: An assessment of the strategy in Asia and of its criticisms. Journal of Post Keynesian Economics, 23(2), 235–266. Denny, C. (2002, July 6). The Contented Malcontent. The Guardian. Retrieved from www.theguardian.com/business/2002/jul/06/globalisation Dhar, S. (2010). IMF performance in the run-up to the financial and economic crisis: Bilateral surveillance of the United States. IEO Background Paper BP/10/04, Independent Evaluation Office, International Monetary Fund, Washington, DC. Fischer, S. (1997, September). Capital account liberalization and the role of the IMF. In IMF seminar Asia and the IMF, Hong Kong (Vol. 19). Fontaine, T. (2005). Currency crises in developed and emerging market economies: A comparative empirical treatment (EPub) (No. 5-13). Washington, DC: International Monetary Fund. Gold, J. (1984). Legal and institutional aspects of the international monetary system: Selected essays. 2-volume set. Washington, DC: International Monetary Fund. Grant, D., & Iedema, R. (2005). Discourse analysis and the study of organizations. Text-Interdisciplinary Journal for the Study of Discourse, 25(1), 37–66. Guitian, M. (1996). The issue of capital account convertibility: A gap between norms and reality. In S. M. Nsouli & M. Guitian (Eds.), Currency convertibility in the Middle East and North Africa (pp.  169–188). Washington, DC: International Monetary Fund. Gunning, J.W., Botchwey, K., Collier, P. and Hadama, K., 1998. External Evaluation of the ESAF: Report by a Group of Independent Persons. International Monetary Fund. Harvey, D. (2007). A brief history of neoliberalism. New  York: Oxford University Press.

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

119

Huber, E., Nielsen, F., Pribble, J., & Stephens, J. D. (2006). Politics and inequality in Latin America and the Caribbean. American Sociological Review, 71(6), 943–963. Hudson, S. (2003). Trade liberalization and the Jamaican economy: Prospects and effects of tariff adjustments. Research papers series, Bank of Jamaica. Iedema, R. A. (1998). Institutional responsibility and hidden meanings. Discourse & Society, 9(4), 481–500. Igwe, I.  O. (2018). History of the international economy: The Bretton Woods system and its impact on the economic development of developing countries. Athens Journal of Law, 4(2), 105–126. International Monetary Fund Staff. International Monetary Fund. (1950, April 30). Annual report of the executive directors for FY. https://www.imf.org/external/pubs/ft/ar/archive/pdf/ ar1950.pdf International Monetary Fund. (2019). Selected decisions and selected documents of the IMF, fortieth issue  – Decision on bilateral and multilateral surveillance. https://www.imf.org/external/SelectedDecisions/Description.aspx?decis ion=15203-(12/72) International Monetary Fund Staff. (2011). IMF performance in the run-up to the financial and economic crisis: IMF surveillance in 2004–07. Washington, DC: International Monetary Fund. James, H. D., James, H., & Harold, J. (1996). International monetary cooperation since Bretton Woods. Washington, DC: International Monetary Fund. Khan, M. S., & Sharma, S. (2003). IMF conditionality and country ownership of adjustment programmes. The World Bank Research Observer, 18(2), 227–248. Kindleberger, C. P. (1973). Evaluations of the International Monetary Fund and the International Bank for Reconstruction and Development. In A.  L. K.  Acheson, J.  F. Chant, & M.  F. J.  Prachowny (Eds.), Bretton Woods revisited, papers delivered at a conference at Queen’s University, Kingston, Canada. Toronto: University of Toronto Press. (1972, pp. xxiv+ 138). Journal of International Economics, 3(3). Latour, B. (1999). On recalling ANT. The Sociological Review, 47(1_suppl), 15–25. Lavigne, R., & Vasishtha, G. (2009). Assessing the implementation of the IMF’s 2007 surveillance decision (No. 2009-6). Bank of Canada discussion paper. Lipscy, P. Y. (2015). Explaining institutional change: Policy areas, outside options, and the Bretton Woods Institutions. American Journal of Political Science, 59(2), 341–356. Mohammed, A.  A. (2001). The future role of the International Monetary Fund. Geneva: UN. Moschella, M. (2009). When ideas fail to influence policy outcomes: Orderly liberalization and the International Monetary Fund. Review of International Political Economy, 16(5), 854–882.

120 

C. CLARKE AND C. NELSON

Moschella, M. (2010). Governing risk: The IMF and global financial crises (pp. 303–304). Springer: Palgrave Macmillan. Park, D., Ramayandi, A., & Shin, K. (2013). Why did Asian countries fare better during the global financial crisis than during the Asian financial crisis. Responding to Financial Crisis: Lessons from Asia Then, the United States and Europe Now, 103–139. Pastor Jr, M. (1987). The effects of IMF programs in the Third World: Debate and evidence from Latin America. World Development, 15(2), 249–262. O’brien, R., Goetz, A.  M., Scholte, J.  A., & Williams, M. (2000). Contesting global governance: Multilateral economic institutions and global social movements (Vol. 71). Cambridge: Cambridge University Press. Önis, Z., & Senses, F. (2003). Rethinking the emerging post-Washington Consensus: A critical appraisal (No. 0309). ERC-Economic Research Center, Middle East Technical University. Sachs, J. (1997), ‘IMF is a power unto itself’, Financial Times, London, 11 December Sen, A. (2001). Development as freedom. Oxford: Oxford Paperbacks. Skogly, S.  I. (1993). Structural adjustment and development: Human rights-an agenda for change. Human Rights Quarterly, 15, 751. Stewart, F. (1995). Why we need a structured market. In Poverty, Prosperity and the World Economy (pp. 187–209). Palgrave Macmillan, London. Stiglitz, J. (2000). What I learned at the world economic crisis. In W. Driscoll & J.  Clark (Eds.), Globalization and the poor: Exploitation or equalizer (pp. 195–204). New York: International Debate Education Association. Stone, R. W. (2008). The scope of IMF conditionality. International Organization, 62(4), 589–620. Taqwaamani, A. 2014. The Moorish Diarium: A diary of a moor  – The Great Maze of an international monetary system, Amaanah Taqwaamani. Uchendu, O. A. (2003). Monetary management and the current role of Bretton Woods Institutions. Economic and Financial Review, 41(1), 23–34. Vasudevan, A. (2003). IMF: Concerns, dilemmas and issues. Economic and Political Weekly, 38(37), 3940–3943. Wade, R., & Veneroso, F. (1998). The gathering world slump and the battle over capital controls. New Left Review, 231, 13–42. Weaver, C. (2010). The politics of performance evaluation: Independent evaluation at the International Monetary Fund. The Review of International Organizations, 5(3), 365–385. Williams-Jones, B., & Graham, J. E. (2003). Actor-network theory: A tool to support ethical analysis of commercial genetic testing. New Genetics and Society, 22(3), 271–296. Williamson, J. (1986). The International Monetary Fund 1972–1978: Cooperation on trial: Margaret Garritsen de Vries (International Monetary Fund, Washington

5  INTRODUCING THE INTERNATIONAL MONETARY FUND 

121

DC, 1985) Vols. I and II, Narrative and Analysis, pp. xxxiii+ 1152, Vol. III, Documents, pp. xii+ 657, $60. Journal of International Economics, 21(3–4), 379–381. Woods, N. (2006). Understanding pathways through financial crises and the impact of the IMF: An introduction. Global Governance: A Review of Multilateralism and International Organizations, 12(4), 373–373. Wyplosz, C., 2005. Are the International Financial Institutions Out-of-Date? Finance & Bien Commun 2005/1 (No 21), p. 33–40.

CHAPTER 6

A Clash of Ideologies: Jamaica and the International Monetary Fund

Introduction Jamaica’s relationship with the International Monetary Fund began with its membership in February 21, 1963 in the early years of independence with an initial quota of SDR 20 million, which was increased gradually over the years. A one-year Stand-by Agreement was made with the Fund in June 1963, which was a precautionary measure to be used if the need arose. Jamaica did not avail itself of the use of resources committed under the arrangement and it was allowed to expire in June 1964 (Table 6.1). Given the depth of the suffering, there was a high degree of agitation within the population. This became intertwined with the activities associated with the 1967 elections as both parties clearly were desirous of the regis power. Riots in 1965 and the declaration of a state of emergency in 1967 were elements of the severity issues that threatened to overpower the nation suppression of profits and harshness against activist led to the expressions in song and the birth of reggae as an outlet from violence. The Hon. Hugh Shearer, Prime Minister of Jamaica, had succeeded Sir Donald Sangster as Prime Minister of Jamaica on April 11, 1967. During his tenure, bauxite was in its heyday and three alumina refineries were built as well as tourist resorts. His efforts to increase educational opportunities resulted in five new schools being built as well as an increase in secondary school enrolment. Being suspicious of Black nationalism and socialist ideologies, he denied Walter Rodney, a Guyanese academic and activist, re-entry into Jamaica, © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_6

123

124 

C. CLARKE AND C. NELSON

Table 6.1  Jamaica: History of lending arrangements with the International Monetary Fund 1960–1980 (in thousands of SDRs) Facility

Date of arrangement

Expiration date

Amount agreed

Amount drawn

Amount outstanding

Extended Fund Facility Extended Fund Facility Stand-by Arrangement Stand-by Arrangement Stand-by Arrangement

11-Jun-79

12-Apr-81

260,000

85,000

0

9-Jun-78

10-Jun-79

200,000

70,000

0

11-Aug-77

9-Jun-78

64,000

19,200

0

1-Jun-73

31-May-74

26,500

13,250

0

13-Jun-63

12-Jun-64

10,000

0

0

Source: Collated by authors from Bank of Jamaica Report (1991) Jamaica’s Relationship with the International Monetary Fund, May 1991, Kingston

declaring him persona on grata, due to the latter’s criticism of the middle class in post-independence Caribbean, his association with Black nationalism, socialism as well as his connections with Cuba and the USSR. Student protests arose from the University of the West Indies campus as a response to Shearer’s decision, resulting in efforts being made by the police to suppress the peaceful protest which escalated into riots, namely the ‘Rodney Riots’ throughout Kingston (Neita 2005). Despite the gains that were made even into the early 1960s, the JLP government was hard-pressed to maintain the economic growth rates indefinitely. The national indicators gradually worsened as unemployment almost doubled from 13% in 1962 to 24% in 1972 (Girvan et al. 1984). Similar trends were observed in relation to income distribution and the social conditions had not improved in terms of housing infrastructure and safety. Global commodity price movements presented unfavourable economic balances as oil prices began to outstrip those of sugar, banana and other traditional exports. The main issue is that whilst Third World countries had experienced deficits, the quantum of the deficits in the early 1970s and the economic sources from which these shocks emerged were unprecedented since the global turmoil of 1945. The vicissitudes in the global economy and the nature of Jamaica’s connectivity to it, being one of dependence, capped the potential of Jamaica’s growth prospects, similar to the experience of the rest of the

6  A CLASH OF IDEOLOGIES: JAMAIC… 

125

developing world, filtering through to effectively threaten the very viability of the programmes envisaged by the political administration. Girvan et al. (1980) noted that the government that took office in 1972 did do at a time of heightened political and social tensions associated with the social and economic challenges and therefore moved to commence the implementation of welfare-enhancing projects as soon as they took office.

A ‘Born Ya’ Leader Michael Manley had emerged as the leader of the Opposition People’s National Party in 1969 and became head of the National Workers’ Union (NWU), which represented the progressive wing of the PNP.  Michael Manley had emerged as the Leader of the Opposition having established his own platform distinct from that of his father. The younger Manley was now anxious to ensure that the gains being reaped on Jamaican soil were being spread to the population. His intention from his very first to last budget speech during the 1970s, was to ensure that the masses were freed economically from this perceived exploitation by foreign capitalists, akin to that previously inflicted by the colonialists. In this regard he urged the then government towards the need for a vision accompanied by improved and better techniques in planning. One of his campaign promises was that of jobs to the unemployed, justice and equality. Given the serious nature of the social situation, he suggested the implementation of a Food Subsidy Programme. In one of his early 1970s budget presentations in this capacity, Michael Manley acknowledged the recorded economic growth however he pointed out the high levels of unemployment, increased inflation rates and the rise of the ‘haves’ over the ‘have-nots’ (Manley 1971). His budget speech  Giving  power to the people juxtaposed the 5% rate of economic growth between 1962 and 1969 with the increase in unemployment from 8% to 20% in 1961 and 1971, respectively, and a 3.5% decline in agriculture and 31% inflation rate between 1967 and 1970 in his ten-year stocktaking of the Jamaican economy since independence. By this time, the population was now totally impatient. Freedom from enslavement had not delivered the promise of an accessible economic framework for the freepersons and therefore ‘sufferation’ acknowledged by Lord Moyne’s Commission (see Chap. 2) overtook the social discourse. Independence had been portrayed as the solution to the stagnant social conditions and the perception across the Jamaican population was that,

126 

C. CLARKE AND C. NELSON

whilst there was some development of infrastructure and expansion in employment within the bauxite industry, the direct benefit to the average Jamaican was limited, as the development of the industry was funded by foreign direct investment and therefore profits accrued to the owners of this capital-intensive industry, were expatriated. The PNP took  on this agenda of correcting the inequalities in income, whereby the new administration having received its mandate, embarked upon a wide set of expanded social programmes in an attempt to reverse the widespread suffering that characterized the society. These economic results were however masking the socio-political undercurrents that would rupture during the early to mid-1970s.

Regime Change The  PNP administration of 1972 assumed office at a time when the bauxite investment cycle that had been supporting the sector terminated. This implied that the construction and employment booms associated with the sector would disappear along with the associated inflows and growth that previously enhanced national fortunes. This created significant challenges for the viability of the new administration and the fiscal sustainability of its programmes, which were predicated upon correcting the economic inequalities and social fallout from  the  gains from the extensive foreign investments that were the source of economic activity in the country. From an ANT perspective, networks of associations or a multiplicity of different connections—translations, associations, mediations interact and interface (Watson 2007) typify networks of powerful actors as in the bauxite industry which, when  successfully constructed and maintained and crafted globally, gains power over and through those enrolled in the network (Whittle and Spicer 2005). Orders of discourse, relates to how a discourse is positioned and relates within a network of discourses, the power relations between them all, the factors that have influenced the position of the discourse, the reciprocal interaction and influence with those discourses in the network and the very relationship between these discourses themselves. The ‘semiotic dimension of articulated networks of social practices’ (Fairclough 2003) is demonstrated and is typified by the order of discourse operable between the actors comprising the bauxite industry network which in turn is situated within the field of international

6  A CLASH OF IDEOLOGIES: JAMAIC… 

127

multinational and transnational corporate governance, with its genres, social practices, discourse and structure with established yet shifting relationships and interactions. Given the context, the development of the local bauxite industry’s network of relations was funded by foreign direct investment whereby the profits accruing to the owners of this capital-intensive industry were expatriated to the external actors of the network to detriment of the country, whereby  Manley initiated several measures with respect to negotiating new arrangements. These new terms or changes in the discourse and practice applicable to the relationship of Jamaica as an actor within the bauxite actor network had the intent to ensure that there were greater gains to be derived by Jamaica from the international bauxite network than that prescribed by the existing bauxite industry contracts. Institutions were created, such as the National Bauxite Commission in June 1972 with three objectives, namely the repatriation of lands owned by the bauxite companies to Jamaica, the establishment of an industry monitoring unit called the ‘Jamaica Bauxite Institute’ and finally the direct acquisition of 51% of ownership of the operations. These imperatives were pursued, juxtaposed against the recognition that the boom of the 1960s was now waning and the reduction in foreign exchange earnings, was occurring at a faster rate than the Jamaican economy could respond to fill the gap. Further, given the social platform of the political campaign, the government could not countenance a return to the economic and social conditions of the 1950s or the political fragmentation that would ensue. Manley’s budget presentation, five months after winning the general elections of February 1972, Better Must Come was entirely focused on the domestic situation, not even providing an international context that could impact the accomplishment of the budgetary plans (Manley 1972). The policy intention of the new Prime Minister was to design strategies based on a different concept of the society—that concept was that economic growth was insufficient as this had occurred simultaneous with an almost 50% increase in employment. The new administration promised to reverse these wrongs through a programme of widespread social reforms during first five years in office. These social reforms as new policy directions, implied hearty calls on the budget in order for the population to feel the effect. The vicissitudes in critical economic variables that characterized the global economy put the lid on the growth that Jamaica and the rest of the developing world might have been experienced until then and effectively threatened the very viability of the political administration in Jamaica. It

128 

C. CLARKE AND C. NELSON

became apparent to all, that the domestic economic programmes would have to yield, despite good and well-meaning intentions to correct inequalities and restore social harmony. The civil service was to be transformed to a modern instrument that would be seized with and responsive to the urgency of what Jamaica needed. The intention to address the eroded purchasing power through an appropriate income and prices policy along with a revision of the existing gap between the bottom and top of the civil service were placed high on the agenda, along with the promised emphasis on small and medium businesses on the quid pro quo that they would engage in labour intensive production processes as well as in the agricultural sector. These plans epitomized the efforts to be made by Manley and his administration to address population issues and the pressures on the unemployment levels. A most important declaration was made in the Prime Minister’s speech that the country was to use a mixed economy model to address the varying needs across the country. Under this model, the government would attempt to arrest the problems in the balance of payments (BOP) by routing all foreign exchange related demands through the central bank. Merchants were warned to stop charging exorbitant prices for their goods. The national electricity supplier would be controlled by the government using either taxation or debt to finance its operations. Expenditure cuts would be implemented to reflect a more proper and priority-oriented spending profile in light of the suffering in the country. These expenditure cuts were centred around, for example, reductions in and the use of more economical travel services, when such travel was absolutely necessary and as an optic, the cocktail function normally held to commemorate Jamaica’s independence was cancelled. Girvan, Bernal, and Hughes (1980) note that despite these efforts and the gains that were made early in the 1970s, the government was hard-­ pressed to maintain the expenditure programmes as global commodity price movements presented unfavourable economic balances as oil prices began to outstrip those of sugar, banana and other traditional exports. The main issue is that, whilst Third World countries had experienced deficits, the quantum of the deficits in the early 1970s and the economic sources from which these shocks emerged, were never  seen before, not since the global turmoil of 1945. The only known solution was to curtail imports sharply and restrain income and domestic economic activity.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

129

Turning Point Jamaica’s balance of payments situation declined as an outcome of the degree of its networked connectedness and dependent connectivity to the global economy in the context of the 1973 oil crisis wherefter, OPEC decided to increase the price of oil from US$3.00 per barrel to US$12.50 by 1974. Jamaica’s interconnectedness to the global oil industry and commensurate supplies translated into an increase in the cost of oil imports to Jamaica from US$71 million in 1973 to a stunning US$195 million in 1974. The global recession of 1973–1975 had been attributed to the imposition of a fourfold increase in oil prices by OPEC.  However, the combination of the oil embargo, along with wage-price controls effected by President Nixon of the United States, causing prices to increase and demand to decrease, in addition to the removal of the gold-US dollar convertibility under the Bretton Woods Agreement, caused the value of the dollar to plummet, producing stagflation and negative GDP growth, heralding a deep global recession. In Michael Manley’s 1973, Politics of Change budget speech, the policy agenda was well underway in terms of civil service reform, an expanded skills training budget and making the public service more competitive (Manley 1973). The Prime Minister announced the intention to provide the conditions in which goods and services would be provided whilst simultaneously committing the government to: (a) produce strategic items that were not being produced by the private sector; (b) provide the key elements of a decent living as resources allowed; (c) address stagnant agriculture, public utility crisis, problems in industry and tourism and the impending BOP problems; and (d) fix the problem in education with a view to providing more opportunities to acquire skills. In line with this, the Soap and Edible Products (SEPROD) company formed in 1956, was requested to support the nutritional needs and foster national self-reliance by the provision of basic consumables, to venture into the production of rice, cassava and banana as well as the processing of soya. The Policy focus was on the use of property tax as an instrument of social policy and inducing idle lands back into production; the  implementation of a road programme, water projects, maternity centres, bridge building, government houses, continuing subsidies on flour and condensed milk and an increased tax on betting and cigarettes. Despite this, there were two indicators of slippages in the economic programme: the recommendation of a salary increase for parliamentarians

130 

C. CLARKE AND C. NELSON

and the reclassification of groups of civil servants which was accompanied by increased wages. Up to this point social reforms and some programmes— infrastructure development of rural and urban roads, water development in major towns, maternity centres, bridges and houses, as well as a continuation of the subsidy on flour and condensed milk—could still be implemented because the macroeconomic conditions were relatively stable and the country had relatively low levels of debt. However, it would prove to be unsustainable. In 1974, the PNP followed through on additional steps to gain greater control over the bauxite sector and derive larger inflows from local operations. A levy on bauxite extraction was implemented which provided temporary relief until the parent companies in the United States and Canada began to lobby their governments which in turn put pressure on the diplomatic relationship between Jamaica and the United States. Resistance from the Jamaican government was met with reduced bauxite output and therefore reduced earnings from the levy, which served to put the government back into the financing challenge it previously found itself. A joint approach was not taken in the negotiations with the bauxite  companies despite the similarities between all five bauxite companies and producers. At the outset of the discussions, the Jamaican government wanted to negotiate separately with the companies, which in turn insisted on a joint approach, using the argument that the five American companies were similar, since they were all Western hemisphere trading corporations and despite ALCAN having Canadian interests. ALCAN, although different, identified itself with the other five because past experience had taught them not to have heightened expectations of support from the Canadian government regarding their interests. The Canadian government was without a clearly formulated policy regarding expropriations1 as in the case of ALCAN and the Government of Guyana in the nationalization of the Demerara Bauxite Company (Demba), which was a subsidiary of ALCAN, which had been in operation in Guyana since 1916. ALCAN was without any support from the Canadian government and was left to negotiate its own compensation agreement with the Guyanese government. However, the assistance of Arthur Goldberg, a former United States ambassador to the United Nations, on the invitation of the Guyanese Prime Minister Forbes Burnham, is credited as 1  The Canadian government has established a government-owned enterprise, the Canada Development Corporation, which could be used for this purpose. (Litvak and Maule 1975).

6  A CLASH OF IDEOLOGIES: JAMAIC… 

131

contributing to an amicable settlement between the parties and the case used to set a precedence in the nationalizing of foreign enterprises. It can be construed, therefore, that the US policy position Economic Assistance and Investment Security in Developing Nations, which insists that its corporate citizens receive ‘prompt, adequate, and effective compensation in the context of expropriation’, was arguably influenced by the Demba case (Keith and Girling 2007). The US  Presidential statement made on January 19, 1972, titled Economic Assistance and Investment Security in Developing Nations,2 espoused a policy position on expropriation, whereby in situations involving a significant United States interest, any failure to pay prompt adequate and effective compensation would result in a withholding of new bilateral economic aid and a refusal to support loans from multilateral development institutions such as the Inter-­ American Development Bank (IADB) the International Development Association (IDA) and the Asian Development Bank (ADB) unless major factors affecting American interests required the US government to act otherwise. The American companies in Jamaica were insured by the Overseas Private Investment Corporation (OPIC)3 and represented an overwhelming part of OPIC’s total insurance commitments, which signalled the interest and involvement of the United States itself in these matters, along with OPIC, on behalf of the companies. OPIC has a clause in its insurance agreement, which makes the insurance void if loss due to expropriation results from ‘justifiable provocation ‘by the company. OPIC had insured American bauxite-alumina operations to the tune of about US$300 million dollars (Litvak and Maule 1975, 54 ). ALCAN however, was the only alumina company to have paid significant corporate income taxes in Jamaica and had an excellent record in terms of its contribution to Jamaican society, in comparison to the other companies. 2  The Expro Group was created to manage the policy processes and the members had (i) to review continually all potential and actual expropriation cases and compile information on the American economic benefits subject to US action, for example, trade preferences, bilateral and or multilateral aid, outstanding debt and total foreign investment; (ii) to make specific findings whether expropriation had occurred and whether reasonable provision has been made for the prompt adequate and effective remedy of compensation; (iii) to recommend courses of action to the US government consistent with this statement; and (iv) to coordinate and ensure policy implementation. 3  OPIC had insured about US$300 million in American bauxite-aluminium operations (Litvak and Maule 1975).

132 

C. CLARKE AND C. NELSON

During 1974 and 1975, the sources tapped by the country were international banks, non-IMF bilateral and multilateral concessional sources, and European bond market issues, from which the government  obtained two-thirds of what was needed to close the gap. The annual Throne Speech of 1974–1975 reported the preceding period as the worst year for the world economy in forty years due to the global oil crisis; there were two years of negative growth in the United States and Europe; high global inflation rates with domestic inflation of 27.2% in response to which the government implemented higher credit ceilings and restrained short term lending. Nevertheless, economic growth was 4.3% in Jamaica—the best rate of all oil-importing countries. There were plans in the Throne Speech to effect further increases in post-primary education, teacher training, school building and the rural education programme. In addition, health clinics were developed along with a nutrition programme for pregnant women and children under four years of employment. In the speech, Unleashing the Potential (May 1974b), there was signalled further exploration with respect to the bauxite reserves with the Australian government, with the move to restore ownership and control of bauxite land to the government of Jamaica (GOJ) as well as uniting with Guinea, Sierra Leone and other bauxite-rich countries to negotiate prices in a bid to claw back prices in the favour of developing countries (Manley 1974b). Further expansion in the social dimension was pursued  through: an exploration of the possibility of unemployment insurance; increased pensions from the National Insurance Scheme (NIS) the provision of an Old Age Assistance programme; and, the generation of employment through a government-building programme. Free primary school education began culminating  in the Common Entrance  Examination to enter highschool, that was intended to be blind to wealth. A wider programme of human development  was undertaken concerning, values, literacy, the National Youth Service (NYS), the physically and mentally challenged, culture and sport. There was some concern about the fact that a minimum wage was introduced in the context of high rates of unemployment and how those two variables would be balanced. An economic council was established to handle the oil crisis and ensure that all fiscal, financial and trade policies are working to same objectives. The Prime Minister wanted developing countries to unite and fight to get decent prices. In terms of space for production, five complexes were developed to provide factory space. These policies however well-meaning did not consider the implications of these

6  A CLASH OF IDEOLOGIES: JAMAIC… 

133

extensive measures on the system of incentives to improve competitiveness as well as resilience to economic and other shocks. The Minister of Finance indicated that the goal of the wages policy was to infuse intelligence, cooperation and patriotism in the establishment of wages as the administration viewed negatively the tendency of professionals and businessmen to  push up prices whilst  the wages that they were being paid were not moving with the same speed. The understanding of the primacy of economic motivations in the making of business decisions was seemingly lost on the Minister and perhaps the administration. The Prime Minister also indicated the intention of the administration to work with developing countries to fight back in the international community to give them decent prices for their exports. Manley’s fulsome sectoral plans were presented in a volume in July 1974. In it he presented his plans to influence the economic incentives in the agricultural sector and to expand employee ownership and control of the larger farms whilst also bringing idle lands into production (Manley 1974a, b). The need to introduce the value-added dimension to the produce of the farmers in order to increase the returns enjoyed by growers was also to be pursued and he distinguished between subsidizing agriculture and enabling farmers to participate in earnings from more sophisticated productive activities. The tensions between the two views of the tourism industry by the Jamaican population were acknowledged by the Prime Minister and he emphasized the need to develop the local activities that tourists could access from the hotel in conjunction with the renewal of urban areas surrounding tourism spots. He also reiterated the need to balance local and foreign enjoyment of the tourism earnings. The Prime Minister’s views on the bauxite industry was centred around his discomfort with the fact that the economy had become so heavily dependent on this wholly foreign-owned entity that employs one-half of the number employees of the tourism sector, to which Jamaica contributed little value-added to the product, and it was slow to train its workers in management. He borrowed the term commanding heights from Aneurin Bevan, as, when combined with the heavily foreign-owned sugar production as well as the banking, utilities, insurance and hotels, Prime Minister Manley felt that these areas were strategic to the development of the economy and society. He subscribed to the Bevanite view of the 1950s, that the commanding heights should be publicly owned. Furthermore, foreign capital should be directed to investments that would benefit the national interests and priorities. Whilst he acknowledged the need for more capital

134 

C. CLARKE AND C. NELSON

inflows, his view was that these flows should be invited in to particular areas and he objected to the possibility that decisions affecting Jamaica would be made in foreign boardrooms. Plans for the development of the political agenda were discussed at the party’s annual conference later during the year. Commentary by Man on the Move (1974) presents deliberations on the creation of a mass democratic socialist party that would, if properly implemented, eradicate the need for a political opposition party or at the very least one would not be sustainable. This new movement would provide a philosophy of how to address the problems facing the society and economy. The sentiments expressed reflect an interest in developing a society based on egalitarianism where the focus would be on the workers and their contribution and sharing in the wealth of the nation. The party was reported to have set aside the internal faction that was attempting to start a socialist revolution. The trade unions were decried as they were perceived as operating in support of the capitalists as was the University who was thought to be contributing to the output of the capitalist sector. The conference reiterated the negative perceptions of the private sector and its dominance by the upper levels of society in management and technical levels whilst making it clear that the fight was against those who are issuing the system to subdue the masses. Bernal (1984) illustrates the ills of capitalism by way of an analysis of the ownership of farmland whereby, large tracts of over fifty acres were concentrated in the hands of 200 or so persons, whilst 151,705 persons had farms of less than five acres. The proponents of democratic socialism viewed this through an extremely negative lens and focused on trying to address these options. The Manley administration was attempting to correct the social implications of the economy by constraining economic activity to achieve the goals of democratic socialism. There was a simply rhetoric that proclaimed capitalism exerted extraordinary pressure on the poor which was resented by the party and the population. Bernal presents the vibrancy of the discourse and events of the mid to late 1970s as a matter of ideological differences between democratic socialism rhetoric and imperialism, the former being the view preferred by the Jamaican Prime Minister and elements in his administration as against the technical staff at the Fund. Bernal reports that these contentions were due to the irreconcilable differences that emerged from these opposing ideologies. The heat of the rhetorical delivery meant that compromise would be viewed as betrayal which became increasingly unpalatable the longer the contentions lasted.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

135

Things Fall Apart This plan, however, fell apart in 1976 when private financial institutions displayed unwillingness to continue to lend to developing countries as they now deemed them as un-creditworthy. The bilateral and multilaterals declined to fill the void that still remained, thereby plunging these countries back into turmoil. The need for imports to supply basic food and other essential items for consumption and production was confronted with the absence of flexible reserves, which implied that IMF funds had to be solicited for BOP support as the rest of the international community had declined. Despite this, the budget speech of 1976 revealed that there was No Turning Back on the plan to regain the ‘commanding heights’ of the economy (Manley 1976). In it, the Prime Minister announced the takeover of 51% of land in mining and 100% of those owned by bauxite companies. There was a call for Jamaica to stand in unity with the rest of the Third World to facilitate the transformation to democratic socialism. A Special Employment Crash programme to employ 30,000 persons was announced further to the efforts of providing work in the previous financial year. Enrolment in education doubled between 1972 and 1976 along with additional spending on basic schools. Further laws enacted included the Equal Pay Act, Bastard Act, Copyright Law and Land Laws. On the security side, the Jamaica Defence Force had to be brought in to reinforce the police numbers given the receipt of intelligence that international crime was entering the country. Despite these programmes, the deteriorating economic conditions generated social unrest the likes of which the government had vowed to eradicate. This social unrest began to have a negative impact on the tourism industry. At the same time, Jamaica’s credit ratings was downgraded from A to D by the United States Export-Import (EXIM) Bank, and the US embassy staff were notified that Jamaica was a hazard post. The prevailing State of Emergency was effected in the context of the Administrations’ defiance. The scale of the economic needs far outstripped the potential support that bilateral sources could provide and the scale of the social needs overwhelmed the economic capacity of all national institutions to fill. Nevertheless, the PNP won the 1976 election with the largest majority in the history of the party. Whilst this represented a victory over the alleged interference of the CIA in the domestic policies and politics of Jamaica,

136 

C. CLARKE AND C. NELSON

the government would no longer be able to avoid engaging the IMF, as the central bank was now out of reserves of foreign exchange. Foreign exchange required to support imports of basic goods and services were at all-time lows without any private sector interest in or capacity to generate foreign exchange earnings. With no foreign exchange, the government had very little bargaining power. Their policies had to yield to the direction paved by the Fund. In his analysis, Bryan (2011) posits that, at the end of the day, the differences between the two political parties were exaggerated by various interest groups at different points in time and that, in reality, there were not very many differences. In particular, he acknowledges that the government of the 1960s did make advances in the social arena albeit not as aggressively as those in the 1970s. In the 1960s, the global economy was simply far more favourable than it happened to be in the 1970s and therefore the extent to which local policy was successful was a matter of fortune rather than any level of economic dominance or prowess on the part of policymakers or administrators. The lesson of the 1970s was to reiterate the extent to which the small and open features of the economy and society could generate economic imbalances that would derail the much needed and promised social programmes. Geopolitical events also bore heavily on Jamaica’s fortunes, capabilities and opportunities in the 1970s. These heightened temperatures emerged from the political arena due to the heavy programme of redistribution of income and economic power not just among the population but also from the international owners of capital, to the state including public utilities and export agriculture entities. The bauxite industry that developed on the basis of foreign capital to support foreign interest did not escape government intervention and was subject to a levy that increase government revenue eight-fold during its first year. In addition, the government organized for the purchase of a 51% stake in the shares of the company and repurchase of lands not currently being used for mining. At the same time, the Prime Minister was actively involved in non-­ traditional global political arenas such as the Non-Aligned Movement (NAM) Cuban ideology and other anti-establishment activities. It was unsurprising that the country began to be viewed by investors and governments, including North America, as leaning towards or making a transition to a Communist agenda. The movement towards nationalization of private enterprises was viewed with a hostile lens and investors pulled back

6  A CLASH OF IDEOLOGIES: JAMAIC… 

137

on production and investment flows. These in turn fuelled drastic increases in unemployment, harsh constraints on wage growth and the propagation of black markets for foreign exchange. The national economic situation worsened; personal financial viability was threatened. This provided opportunities for the emergence of corruption and violent acts that intersected with the political ambitions of both parties one with an interest to remain in power and the other with a desire to regain the reins of government. The return of the PNP to government in 1976 so proved to be somewhat of a pyrrhic victory as the depleted reserves was indicative of the impossibility of continuing the social programmes, which, while well received by the population, were unsustainable in even the shortest term. Domestically, our research indicates that this rhetoric generated high levels of fear such that the private sector representatives found that it was in their interests to cooperate through the establishment of the Private Sector Organisation of Jamaica (PSOJ) in order to mobilize support against the government. This support increased as shortages of basic consumer goods began to emerge across all shopping areas in the economy and was interpreted as a move to communism that typically featured shortages and rationing of goods. The international capital markets were also responding to the political rhetoric and Jamaica found it difficult to borrow at the same time as the bauxite levy flows were reduced and tourism earnings also contracted. The administration overlooked the fact that the bauxite companies would mount a response to the imposition of the levy and therefore that the projected revenues would continue in perpetuity. Bryan (2011) reported, however, that the levy was likely the nail in the coffin of the industry as it made Jamaican bauxite one of the most expensive in the world at the time. As a result, the companies designed a response that would enable then to diversify their sources of bauxite and as such they began investing in these new locations. Girvan (1984) presents the conclusion of Dell (1980) that indicates that,  had developing countries not taken this action, the deficits would have been of even of a greater scale. Developing countries were required to adjust on a scale that far surpassed their contribution to the problems fostered upon them. Despite the availability of funds from the IMF, developing countries made minimal use of their financing windows in the initial throes of the crisis as there was widespread fear of the strictness of the Fund’s prescriptions and the leaders of these nascent democracies found

138 

C. CLARKE AND C. NELSON

the likely fallout to be untenable with the platform that enabled their ascendance. Developing countries instead turned to international sources of capital, whose agreements were free of the conditionality’s associated with IMF loans. An IMF official is reportedly cited in Dell (1980) as indicating that it is the delayed approach to the IMF by developing countries that results in them being subjected to stringent conditionality’s by the time they come to the Fund (Girvan 1984). The delayed approach, however was the result of the feared stance of the fund. A levy on bauxite extraction was implemented which provided temporary relief until the parent companies in the United States and Canada began to lobby their governments which in turn put pressure on the diplomatic relationship between Jamaican and the United States. Resistance to the levy unilaterally imposed, coupled with the ending of the bauxite investment cycle was met with reduced bauxite output and therefore reduced earnings from the levy which served to put the government back into the financing challenge it previously found itself. This response by the bauxite company appeared to have caught the administration off guard as the nationalistic approach to economic policy appeared to have ignored the disincentives and signalling effects of the levy. The boom of the 1960s was now waning and the reduction in foreign exchange earnings occurred at a faster rate than the Jamaican economy could produce output to fill the gap. Further, given the social platform of the political campaign, the government could not countenance telling the people to return to the economic and social conditions of the 1950s or before. Girvan (1984) discusses the view that Jamaica problem in the 1970s was driven by uncompetitive exports due to high real wages, too many imports, distorted resource allocation caused by too much government intervention. Instead, as discussed before, the fallout was largely caused by the reaction of the unilateral imposition of the bauxite level which compounded the decline in inflows associated with the end of the investment cycle. Further, there was negative reaction of the local and foreign investors to the rhetoric and understood purpose of the social reform programme. Implementation of the Fund’s solutions ignored the fact that there would only be further negative impacts on the groups previously impacted. The government’s reaction could therefore have been expected had the Fund reflected on the chronic nature of the social situation since the 1930s (see Chap. 2), which had impacted the political arena in the post-­ independence era and formed a critical make or break issue in relation to

6  A CLASH OF IDEOLOGIES: JAMAIC… 

139

the legitimacy of the current political administration. The government implemented these policies because it seriously believed in the need for these measures and it was of the view that for the needs of the population to improve significantly, a phased approach would be inadequate. The administration would therefore brook no opposition to their implementation regardless of the constraints on the country’s economic ability to sustain them. Fundamental reform of the social structure of the country was a sine qua non and Prime Minister Manley was determined to bring better to the masses. While the reform of the social agenda was underway the economic situation deteriorated further reflecting the impact of the continued tightening of international capital flows, coupled with outmigration of local professional and manufacturing talent and the demands on the fiscal flows to finance the new social programmes. Simultaneous with the pressing social needs, the local private sector was threatening to lay off 50,000 workers because of the shortage of raw materials reportedly as a result of the shortage of foreign exchange. The ‘fly in the ointment’ that piqued the interest of the United States in what was happening in Jamaica was the perception that this alternative pan was predicated on support from socialist countries. The United States was not prepared to countenance an expansion of socialism in the region and therefore attempted to engineer the return of the Fund to the bargaining table. The United States became increasingly concerned with the socialist rhetoric with the region in the throes of its Cold War activities with the Soviet Union. The United States therefore began to pressure both sides into returning to the discussions and specifically on the Fund to strike a deal with the authorities. The Carter administration floated the possibility of extending some financial support to the government on condition that an agreement with the fund was reached, while the fund also signalled its willingness to soften its position on the dispute. In the wake of these issues, the resistance of the government and the political administration to the Fund rebounded a softening of their position in April 1977 and by July 1977, the country entered into a Stand-by Agreement (SBA). The Agreement was noted to have been far more lenient on Jamaica in terms of the required adjustments in the exchange rate and wages and income (Girvan 1984). In exchange, there were tighter requirements for the fiscal accounts. This softening should not however be viewed at this point as total acquiescence to the Fund’s agenda. This

140 

C. CLARKE AND C. NELSON

return, however, was not without internal political discord blowing up and significant losses in public support (Girvan 1984). The administration was being pragmatic, it recognized that something had to be done to provide financial flows to keep the country afloat whilst implementing a programme that could replace the IMF financing in short order. The sentiments held by the population during this period reflect a wide range of views relating to the Fund and the country’s ability to operate without borrowing from the Fund. On the one hand, Carl Stone (1977) warned the authorities against developing a dependence on the Fund based on the experience of other countries. He held the view that based on the Fund’s track record, its approach does not work for Third World countries. He cautioned that despite this, Jamaicans needed to determine how to relieve the short-term pressures that they were facing in order to prevent a future return to the IMF for rescue on even more stringent terms than were being presently discussed. Colin Gregory had a very aggressive stance, seeming to blame those who lent Jamaica money in the past for the country’s inability to repay these loans (Gregory 1977). He felt that rich industrial countries were obligated to bailout countries like Jamaica that have overspent and were overleveraged. An editorial indicated that even without foreign exchange support from the Fund, there is still the need for the public and private sector to work and produce—a seeming stamp of approval to the mixed economy model under which the Manley administration was proceeding (Unnamed 1977). Desmond Allen took the position that if Jamaica engaged the Fund—rightly or wrongly—Jamaica needed to spend it well and he felt that the private sector should be allowed to participate in spending it (Allen 1977). Carlyle Smith denounces the view that Fund wanted to limit the country’s imports instead positing that what the Fund asks for is a balance between the country’s imports and exports (Smith 1977). The challenge, however, was that the ability to achieve that balance without reducing imports was to expand exports—a prospect that was next to impossible given the tensions between the private sector, trade unions, government policy and the political rhetoric. During the months between the return to the IMF and the striking of an agreement, the Prime Minister delivered his budget speech titled Participatory Democracy in May 1977 against a backdrop of further deterioration of the terms of trade (Manley 1977). On the economic side, the tax system was to be used to incentivize the substitution or introduction of labour-intensive industries in order to expand employment. During this

6  A CLASH OF IDEOLOGIES: JAMAIC… 

141

period of IMF borrowing, subsidies were eliminated as well as the government‘s expenditure on basic food items, coupled with successive devaluations of 14.1% in 1977, 49.4% in 1978 and 19.8% in 1979 (Bernal 1984). Consumption expenditure declined over the period of structural adjustment, with the government adopting a strategy of social support to those that fell below the poverty line, as prices increased and the social wage component of labour income was reduced (LeFranc 1994). However, the Prime Minister simultaneously denounced capitalism as being incapable of coping with the challenges of the country and democratic socialism was presented as the solution with the focus on controlling areas of decision making in the economy to direct focus and resources to the real needs: food, clothing and shelter and to gain greater control over the allocation of investment and foreign exchange as well as to direct external trade. Plans emerged to develop a strategy to (a) transform to a socialist economy (b) promote self-reliance to develop through our own efforts to satisfy our needs and (c) develop an emergency production plan for the short term to 1978. A Five-Year Development Plan was to identify processes to increase productive capacity and deepen internal linkages. The key elements of the economic plan were as follows: ( a) maintenance of a dual exchange rate, (b) running of a  budget deficit to protect the unemployed up to a maximum of J$250 million, (c) incomes policy to stabilize purchasing ability through local substitute and control deficit spending, (d) a foreign policy that emphasized domestic sovereignty, and (e) a production plan based on what was possible, whereby proposals would be analysed to address bottlenecks. It would not be a ‘magic wand’. Additionally, it was communicated that Jamaica would seek to further diversify its foreign economic relations, with approaches to the People’s Republic of China, the Soviet Union and the COMECON4 bloc (Manley 1977:10). 4  Founded in 1949 by Joseph Stalin, COMECON, or the Council for Mutual Economic Assistance, was an economic organization from 1949 to 1991 under the leadership of the Soviet Union that comprised the countries of the Eastern Bloc along with several socialist states.

142 

C. CLARKE AND C. NELSON

A team of persons (inclusive of social scientists from the University of the  West  Indies, who became the core of a task force consisting of ten working groups) together developed the Emergency Production Plan as an alternative plan to the IMF programme, as an expression of ‘bottom-­up’ planning (Stephens and Stephens 2017). The Plan sought to put constraints on foreign exchange demand, whilst expanding tourism and bauxite earnings and developing agricultural production and small-scale manufacturing activities that would be viable substitutes to imports thereby reducing the demand for foreign exchange to purchase finished goods (OPM 1977). This Plan was also to be interpreted as being complementary to the previous strategy presented on January 19, 1977 which developed the long-run directions of the socialist transformation that the administration planned to implement (Manley 1977). Efforts were made to solicit the involvement of the people as well as to provide a public education programme, namely ‘People’s Forums’, which sought to educate the population on certain concepts such as ‘self-­reliance’ and ‘democratic socialism’ to engage various interest groups to make an input into different components of the Plan, as well as to obtain their suggestions and perspectives surrounding the Plan. These contributions were incorporated into the final document provided to the government. The Five-Year Development Plan to be presented later was expected to identify areas in which productive capacity could be increased through deepened internal linkages as well as through import substitution and developments of the export sector. Whilst a country is certainly within its rights to develop plans and alternatives in its governance of all spheres of life within its borders, Devlin (1981) indicates that the knowledge that an alternative might be developed may have inadvertently disincentivized the authorities from wholeheartedly approaching the negotiations with the Fund. The Emergency Production Plan (Henke 2000) with the components represented graphically in Figs. 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11, 6.12, and 6.13 was seen as a vehicle to establish self-reliance and to sever the umbilical cord of the IMF’s programme of reforms and policy prescriptions, which would again be included in the programme being negotiated. The motivation for the Emergency Production Plan was premised on the need to reestablish sovereignty and ownership of the development process. Although the Plan entailed production targets for most sectors similar to that compiled by the UWI team, the degree of structural transformation of the economy and budgetary expenditure was reduced but with the establishment of a dual exchange rate.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

143

Agriculture Foreign Economic Relations

Manpower and Employment

Manufacture and Crafts

THE EMERGENCY PRODUCTION PLAN

Fuels and Energy

Construction

Tourism Bauxite and Alumina

Fig. 6.1  The Emergency Production Plan 1977: Major Pillars. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

Stephens and Stephens (2017) notes that this initiative was fraught with challenge and was met with resistance by financial advisers, senior bureaucrats as well as certain elements within the political directorate. There was a multiplicity of issues some of which were contextual, which in retrospect one could argue weakened the initiative. Some of the issues related to the information that was used to inform the Plan, the differences of opinion as to modalities of implementation, varying ideological perspectives, uncertainty regarding the role of the state in the economy and how the economy should be managed, capacity issues and discord which interweaved issues of culture, race and class between contributors to the process. This was further compounded by personality issues and egotistical ones, some bordering on the superficial, which altogether led to the splintering of the momentum and heightening of the risks undergirding implementation of the Plan (Stephens and Stephens 2017) and further, if a vacuum remained with no plan at all.

144 

C. CLARKE AND C. NELSON

OBJECTIVES 1. To produce more food and raw materials to feed the nation.

Agriculture

2. To achieve adequate nutritional levels, to reverse the adverse balance of trade and to develop and establish agro-industries

FOOD CROPS

3. To ensure optimum economic and social benefits from maximum utilization of al agricultural lands.

FORESTRY LIVESTOCK

4. To create conditions which will improve rural life and provide

FISHERIES

greater and more equitably distributed opportunities for farmers and rural dwellers to participate in the control of the resources necessary for production and to share in the profits therefrom.

Fig. 6.2  The Emergency Production Plan 1977: Agriculture. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

Deemed as a complementary Plan, a Crop Lien Programme was initiated under the auspices of the Emergency Production Plan which was geared to the domestic market by providing small farmers with credit on easier terms to encourage the production of certain crops for domestic consumption. By January 1978 7.9 million in loans had been dispersed and by 1980 a total of 37.5 million had been approved of which 24.8

6  A CLASH OF IDEOLOGIES: JAMAIC… 

Manufacturing & Cras Export Production

Textiles and Garments

Pharmaceuticals

AgroIndustry

145

OBJECTIVES Maintenance of, and in some instances improvements on, the 1976 levels of production and employment. Generation of a larger share of production by small enterprises as means of spreading income and employment widely. Development of the craft industry with its potential for utilization of indigenous raw materials, economizing on scarce capital, promoting rural development and community development, absorbing female labour and, developing manual and creative skills. Stimulating and fostering development of community enterprises. Generation of additional export earnings Greater government control (by legislation or ownership) of critical enterprises which produce basic inputs for the rest of the manufacturing sector or other sectors ex: Steel Mill, Cement Plant Re-structuring and redefining the TOR of some governmental agencies to more effectively serve the development and monitoring of the manufacturing sector.

Fig. 6.3  The Emergency Production Plan 1977: Manufacturing & Crafts. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

million was dispersed. The repayment record on these loans were extremely poor with only 13% of the dispersed amount being collected according to reports from the Ministry of Mobilization (Stephens and Stephens 2017). Despite overall support for the Emergency Production Plan, other events served to underscore the importance of engaging the IMF in negotiations foregrounded by overtures from the private sector with respect to addressing the shortages of foreign exchange as well as price controls.

146 

C. CLARKE AND C. NELSON

Construction Reliance on the decision of the Housing Trust Board to make loans available to agencies

To start 3214 constructions by the private sector and 10,238 by the public sector for a total of 13,452 construction starts in the next 12 months

The Housing Programme

Regional Distribution Plan

Financing the Programme

CONSTRUCTION

OBJECTIVE: To increase the number of housing units regionally as the provision of shelter for the people should be a priority in the drive for self-reliance

To ensure that every parish has a reasonable number of units. To utilize housing as a brake on the sprawling growth of the Kingston Metropolitan Area.

Fig. 6.4  The Emergency Production Plan 1977: Construction. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

This effort was being stymied further, by the need to access economic support and resources to fill the financing gap exacerbated by capital flight and government overspending thereby leaving only one option open— engaging with the IMF.  Returning to the IMF would also signal an exploration of the opportunity for rebuilding relations with the Carter administration in the United States.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

Construction The forthcoming fiveyear development plan will have as a comparison piece a national physical development plan. Neither have yet to be prepared

Manpower and Material Constraints

CONSTRUCTION The Construction Programme and a National Settlement Policy The NonHousing Sector

At this time Ministries had not yet decided upon the programme for which they have received suitable budgetary allocations

147

It is known that skilled manpower exists to implement the programme. No problem is anticipated in acquiring local and foreign materials

Implementing the Housing Programme

The existing institution will be utilised as much as possible and so the construction programme will be supervised by the Construction Committee which will report to the Cabinet.

Fig. 6.5  The Emergency Production Plan 1977: Construction I. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

The persisting impact of the world economic crisis and retaliation by foreign and local interests impacted by the government’s reform measures led to an exhaustion of foreign exchange reserves simultaneous with the over whelming return of the PNP to power in 1976. Real wages fell by a total of 45 percentage points and there was a 13% reduction in

148 

C. CLARKE AND C. NELSON

Tourism Orientation to Sales Development of charter operations in collaboration with airlines

Orientation of policy towards total sales i.e. both local and overseas Reconstruction of Jamaica Tourist Board to operate more effectively in response to the changes in the marketplace Emphasis on Jamaican culture and national aspirations

Martins Jamaica Vacations

TOURISM

Reconstruction into an aggressive sales organization run on a commercial basis

Objecves: A strategy to improve the economic viability of the industry A policy aimed at the development of holiday industry which will cater to more Jamaican vacaoners and generally involve a greater degree of local parcipaon in the industry. Implicit in this policy for development, is an industry which is consistent with the polical, social and cultural aspiraons of the Jamaican people.

Fig. 6.6  The Emergency Production Plan 1977: Tourism. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

consumption per capita in all social sectors began to reflect a decline. In order to keep the economy afloat the government signed a two-year SBA in July 1977, which lasted only five months and was replaced by a three-­ year Extended Fund Facility (EFF) in May 1978.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

Tourism Connue efforts to create avenues for local parcipaon in hotels and co ages

Holiday Industry

The requirement of beneficiaries under the scheme to maintain present levels of employment for the remainder of 1977

Air Jamaica

149

Strengthened markeng secon Reducon in duplicaon of facilies between Air Jamaica and the Jamaica Tourist Board whenever possible

National Tourism Council

TOURISM

Loans to assist Hotels

Reconstrucon of the board

A Planning Unit for Tourism The establishment of a planning unit in the Ministry of Foreign Affairs

Fig. 6.7  The Emergency Production Plan 1977: Tourism I. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

At the same time, the Prime Minister was actively involved in non-­ traditional global political arenas such as the Non-Aligned Movement, Cuban ideology and other anti-establishment activities. It was unsurprising that the country began to be viewed by investors and governments in

150 

C. CLARKE AND C. NELSON

Bauxite & Alumina Recommendation that companies be required to provide adequate information on this subject.

Spare Construction Capacity

Production Targets for 1977

Bauxite and Alumina

30 acres of land have been provided for experimental cultivation of castor bean

Utilization of Mined-out Lands

Expected increases of 22 % for total bauxite production (83 % of total bauxite capacity) and 42 % for total alumina exports (90 %) Potential for increased aluminium sulphate production Capitalization of expected demand of aluminum sulphate in early 1977 in Venezuela and Central America

Utilization of lands prior to mining for agriculture and forestry

6,016 acres of bauxite lands identified to be immediately put into .

Fig. 6.8  The Emergency Production Plan 1977: Bauxite & Alumina. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

North America as leaning towards a transition to a communist agenda. This move towards nationalization of private enterprises were viewed with hostile lens and investors pulled back on production and investment flows. These, in turn, fuelled drastic increases in unemployment, harsh constraints on wage growth and black markets for foreign exchange. Within a month, Jamaica inked a deal with the IMF for a two-year SBA that despite the signing of the agreement in July 1977, the marginal failure

6  A CLASH OF IDEOLOGIES: JAMAIC… 

Bauxite & Alumina Companies indicated they would be willing to provide personnel to assist in Government’s Kiln Training programmes.

Plans for road diversion, housing development etc

Skills Training

Recommendaon that the JBI should be given full support in its efforts to connue and intensify its current series of seminars

Worker/Management relationship to enhance productivity

Bauxite and Alumina

151

Diversion of Main Road near Pepper Manual Mining of bauxite pockets Development of St. D’Acre area. Construcon of reselement houses.

Infrastructure and Construction Plans with respect to JAVEMEX

Manufacture of Spare Parts

Examinaon of the possibility of locally manufacturing a significant range of parts used by the bauxite companies

Fig. 6.9  The Emergency Production Plan 1977: Bauxite & Alumina. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

of the fiscal test in December 1977 albeit marginally, resulted in the immediate suspension of the programme by the Fund and it was recommended that the government instead secure an EFF that would provide a longer period during which the required economic adjustment would be programmed. This was not taken lightly by the authorities as the

152 

C. CLARKE AND C. NELSON

Fuels & Energy Examination of the possibility of restoring an abandoned alcohol plant at Caymanas to produce alcohol for the gasoline market. Anhydrous Alcohol Production

Survey of the End Use of Energy in Buildings

The development of standards which building designs will be required to meet so as to mitigate the use of airconditioning.

Solar Water Heating Programme

Fuels & Energy

Objecve: To create and/or maintain programmes that will conserve energy and in some cases reduce the need for primary fuel.

Amendment to building regulations to require that all new buildings can facilitate the installation of solar power water heaters. The holding of seminars throughout Jamaica of the design and installation of solar water heating systems Energy Conservation in Industry The undertaking of surveys to determine ways to minimize waste, i.e. improving the efficiency of oil intensive machines and finding uses for resultant wastes in processing eg: bagasse in the sugar industry

Fig. 6.10  The Emergency Production Plan 1977: Fuels and Energy. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

conditionalities associated with an EFF are usually far more stringent than those under the Stand-by Agreement (SBA). Indeed, the EFF was to be implemented in such a stringent way that it was interpreted as being a response to the hostility with which the bauxite companies were treated in the implementation of the bauxite levy and the country was pressured diplomatically and through the efforts of the US Senate as a result of the lobby by the sector.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

Fuels & Energy Examination of the possibility of restoring an abandoned alcohol plant at Caymanas to produce alcohol for the gasoline market.

Imported NonPetroleum Energy Supplies

Increased Production of Charcoal from Wood

The substuon of Charcoal for Kerosene at least to 60% of present kerosene demand

Fuels & Energy

Indigenous NonPetroleum Energy Supplies Objecve: To create and/or maintain programmes that will conserve energy and in some cases reduce the need for primary fuel.

153

Petroleum Supplies

Exploraon of natural gas and oil.

Development of hydro power projects in Western Jamaica and the Blue Mountains

Fig. 6.11  The Emergency Production Plan 1977: Fuels & Energy I. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

The Beginning of the End The 1978 Throne Speech reported the continued high levels of global inflation and the continued impact of the oil crisis as the context. Locally, there was no savings, low levels of investment and consumption of 90% of what was produced alongside currency smuggling and episodes of violence. Economic growth was negative 4% representing significant blow to

154 

C. CLARKE AND C. NELSON

Manpower & Employment

Increased Efficiency

Maximizaon of human resources through onthe-job training

Decreased Unemployment

Manpower and Employment

Objecve: To promote the use of human resources on a large scale To provide management experse and skill training services towards developing cras and small businesses.

The maximizaon of opportunies for the use of unemployed human resources with other producve resources in labour intensive projects.

Effective Distribution Redeployment of unemployed human resources into other sectors and/or locations where labour is short.

Fig. 6.12  The Emergency Production Plan 1977: Manpower & Employment. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

the country and its attempts at economic and policy independence within the prevailing global economic context and the domestic social situation. The accompanying budget speech by the Prime Minister proclaimed We are not ashamed whilst acknowledging the engagement of the Fund because there was no foreign exchange (Manley 1978). The programme would provide J$250 million and would require a 15% devaluation of the Jamaican dollar and a wage freeze. There would be a tougher economic

6  A CLASH OF IDEOLOGIES: JAMAIC… 

Foreign Economic Relaons Examination of the possibility for economic cooperation within Latin America through frameworks such as: SELA, ECLA and the OAS.

Socialist Countries of Eastern Europe

Latin America and the Caribbean

Re-organisaon of the Ministry of Foreign Affairs to handle Jamaica’s relaons with as well as polical and economic analysis pertaining to these areas.

People’s Republic of China

Third World Countries

Foreign Economic Relations The acvaon of economic cooperaon agreements Jamaica already has with Mexico, Venezuela and Tanzania. Creaon of policy to engender the aspiraons for selfreliance amongst our brothers in the Third World

155

Objective: To create a policy of nonalignment that in essence and spirit constitutes a faithful interpretation and practice of the fundamental principles of Democratic Socialism

Industrialised Countries

Examination of the possibility for further expansion of the JamaicaChina Agreements on Trade and Technical Cooperation.

Fig. 6.13  The Emergency Production Plan 1977: Foreign Economic Relations. (Source: Compiled by authors from The Emergency Production Plan 1977–1978 Ministry Paper No. 18–1977, National Library of Jamaica)

package and a focus on prices and the shortages. Increased prices would be experienced due to taxes, devaluation and low productivity. The programme seemed to instil the first elements of fiscal discipline as there were quarterly ceilings on central government expenditure with

156 

C. CLARKE AND C. NELSON

revenue targets also established. The dual exchange rate would be removed in order to encourage exports. He argued for the retention of price controls on food and productive items. The shortages being experienced were argued to be due to the failure of the December 1978 IMF test which required the reaching of a new agreement as the shortages would not have been short-lived and the improvements would occur slowly. Appeals were made to patriotism and the wise use of foreign exchange. Surprisingly no social policy concerns by the Prime Minister was made during this speech. The economic situation was the sole focus area in the budget this year, indicating a major break with the previous years. Between 1978 and 1979, real wages fell by a total of 45 percentage points and there was a 13% reduction in real consumption per capita and all social sectors began to reflect a decline. Girvan (1984) reports that in all other jurisdictions where such a drastic programme was implemented, the result was either the death of democracy or the over throw of the government. Girvan (1984) attribute the longevity of the administration to Michael Manley’s good will due to the raft of socially uplifting and empowering programmes implemented between 1972 and 1976. Nevertheless, the writing was on the wall. The views among the populace surrounding the about turn in the government’s relationship with the IMF was mixed. Several writers were wary of the return to the IMF as the record of countries that engaged with the IMF became dependent on the Fund. Prior to the signing of the agreement, Wesley Hughes’ view (1978) was that Jamaica had been set particularly stringent targets that will put great pressure on people due to increase in prices that it is likely to imply higher food prices. He warned that the Fund and the international financial sector does not defend the needs of Third World countries and advised the country not to lock itself into the IMF system of dependence for a long period as Fund programmes led to wage freezes, higher prices and unemployment reduction. These social issues were the very policies or issues the government was trying to correct. Another indicated that the public was not told about the framework of the organization only that it was granted on our terms. On the other hand Marjorie Vassell (1978) wrote, perhaps tongue in cheek, that the IMF will again be put under manners by PM Manley. She advised that Jamaicans were right not to worry about the re-engagement of the Fund because things were sure to be better at the end of the programme. Despite this Vassell suggested that the government was spending money so that the population would think that all was well in the economy whilst

6  A CLASH OF IDEOLOGIES: JAMAIC… 

157

reminding the population that the Jamaican dollar would not devalue but only depreciate. A few days later, Joan Williams (1978) criticized recent statement on radio by Trevor Munroe where he claimed that the country was to about enslave itself to IMF imperialism because the earlier pronouncements by the government were that the IMF loan was being granted on Jamaica’s terms. An April 22, 1978 article indicated that more riots and disturbances were planned to happen during the period of the next IMF negotiated and urged working people to avoid same (Unnamed 1978). The same unnamed author indicated that these disturbances were being deliberately planned to coincide with the IMF negotiations and claimed that US Embassy was preparing and protecting its assets and staff. Plowman (1978) writes acknowledging the success of IMF in promoting world trade to the benefits of millions of people who are living in conditions that exceed any other period of history. Tackles the question of the IMF being an agent of doom and destruction by questioning the extent to which Jamaica could effectively be self-reliant. This question, he argues, essentially boils down to the composition of the country’s consumption profile. If the basic foods consumed and produced locally then it is far more possible for the self-reliance route to be pursued as it is only the privileged few who would be hurt by constrained imports. Since even basic consumption items were imported into Jamaica for a variety of reasons, self-reliance would be a difficult prospect. The author also acknowledges that the IMF relies far too heavily on currency devaluations in contexts where domestic substitutions for imports is not readily possible. John Hearne (1978) was not as sanguine on the return to the IMF as other writers. He contended that it was only because Cuba alerted Jamaica that no financial or other support was forthcoming from Russia to support the socialist agenda why Jamaica returned to the Fund, albeit, reluctantly. The IMF was treated so roughly whilst waiting for the administration to decide on its course of action and ink a deal. Hearne reports that there was celebration at the IMF office in Washington, DC, when the news that Jamaica was interested in a loan from the Fund was publicized. Without assistance from the Fund, Hearne was of the view that everyone could see Jamaica would end up poorer than Haiti. Socialism in his view was set back fifteen years and there was no option but to cut social services—the very social services that the population was promised, had advocated, agitated for and received early in the Manley administration. Without the support of the Fund, he was of the view that the poor would become

158 

C. CLARKE AND C. NELSON

poorer and less employable given that more of them would have accessed free education. On the same day, Ronald Sasso (1978) interpreted GOJ engagement with the Fund as an indication that it would get its house in order. The result, he anticipated, would be an overall decline in the standard of living due to the expected increase in prices whilst incomes would remain constant during the IMF programme. In May, Carl Stone (1978) repeated warnings of the pitfalls of getting financing from the IMF which will be influenced by their biases and subject to their control. The EFF lasted only seven months. On the surface it ought to appear that the government and country acted carelessly and even recklessly having failed tests in such given succession after signing each agreement. However, the records show that the government did implement extensive policy reversals and constraint on expenditure that failed to yield the results in terms of the hauling and reversal of the economic decline promised under the Fund agreement. The economy kept ticking meanwhile international creditors registered calls on portion of the loans extended just a couple years prior (Girvan et al. 1984). The authors reflect that the agreement was most effective at devastating the political fortunes of the government that had won the majority of government seats in 1976 to becoming a mere shadow of itself in the 1980 decision ushered in by the failure of the second agreement. David Dacosta (1979) expressed the view that the GOJ was being squeezed by the IMF to continue to decrease consumption. In response to the widespread calls for a change of government, he indicated that this would solve nothing and would only transfer the responsibility of implementing the IMF requirements to whichever party won the elections as the IMF would not change its methods just to suit a new Jamaican government. Jimmy Byles (1979) disagreed with the prevailing sentiments that painted the IMF in a bad light and being responsible for the negative economic outturn; instead, he charges that it was government who wrecked the economy. He also pointed to the rhetoric emanating from the government that there were five flights per day to Miami and discouraging businesses from investing and producing by stigmatizing capitalism. Disparaging comments also emanated from the government that investors were bloodsuckers. In particular, Byles referenced and denounced the statements made by Trevor Munroe and Jimmy Tucker, who propagated the view that the IMF was the source of the woes and not the government of Jamaica.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

159

Wilmot Perkins (1979a) then critiqued the extent to which Jamaica’s engagement with the Fund would be profitable for Jamaica because he was not confident that that it would be properly used and that the country would simply end up with more ‘debt, dearth and discontent’. Perkins (1979a) felt that Jamaicans needed to take responsibility for correcting its economic woes. He did not believe that the Jamaican government was the source of the concept of the social contract but that it came from the Fund. His view was that the Fund realized that the root of the problem was political and not economic and, in particular, internal and political problems than external. The government, in his opinion, was faithless and did not command the confidence and cooperation of productive elements in the United States which were important for the country’s progress. An unnamed author in an article on May 22, 1979a indicates that there was an active struggle by Trevor Munroe and his progressive movement to get the IMF rejected, but it had to be called off to gather strength to resume (Unnamed 1979a, b). Dr Munroe and his team were of the view was that it was really the United States behind the IMF push of its imperialism on developing countries and that his team would only need to convince Jamaicans of this for them to join in the fight against the Fund. This article would seem to reflect an acceptance by aspects of the population that Jamaica would not be able to pursue an alternative plan due to the lack of financial and input resources as well as the supply of consumer goods required for the transition to self-sufficiency. Carl Stone’s (1979) opinion was that it was a pity that it took the stringent course from the IMF to restore sanity to a government that was misled and misdirected by a confused, directionless leadership trapped in the pursuit of ideological fantasies. Perkins (1979a) lamented the prevailing view that the government and the PNP administration had nothing to do with the problems facing Jamaica and that persons were trying to blame the economic situation on the imperialists, CIA, IMF, foreign press, Opposition, Jamaica Gleaner and its columnists, capitalists and demonstrators. He was adamant that it was the government that had the responsibility and power to implement actions leading to what is being experienced in the country. He referenced a cartoon in the newspaper that was argued to depict Jamaica as a heavily laden cart burdened with problems, drawn by the emancipated poor and driven by both the government and the Opposition. Perkins’ (1979b) opinion was that it would have been more appropriate if the cartoon had

160 

C. CLARKE AND C. NELSON

Seaga driving the cart and Manley and the government begging him to be more reasonable. The death of the agreement came by 1979–1980 when the IMF suspended the programme due to the breach of the NIR. The government could not create the savings required as there was no positive change in exports whilst there was a large increase in imports. Despite all the sacrifices made, the IMF programme did not yield the successes expected. Again, Jamaica failed an important test. At the same time there was a flood in Western Jamaica that required a relief effort to provide food, medicine and shelter to the persons impacted. According to the Throne Speech there would be a three-year recovery programme with no new taxes instead the effort would be focused on collection efficiency as well as reduced government consumption. Despite failure of the IMF test and the very negative impacts that this was likely to have on the economy, plans for the fiscal year included, increased capital expenditure, maintained free places in high school, increased nutrition programme and increases in the minimum wage. Economic development and social justice were the focus in 1979, as flood disaster would require rehabilitation. The budget was to be interpreted as part of an overarching five-year development programme and its subsidiary three-year economic package. In an attempt to generate national savings, quarterly ceilings on expenditure in central government were established and warrants for these expenditures would be authorized at less than the ceilings. Taxation to generate revenue and reduce personal consumption; a return to the IMF for access to foreign exchange; and, the reduction of government consumption to drive an increase in saving were the key tenets of the Prime Minister’s presentation this year (Manley 1979). The government engaged in scenario planning for possible public sector cuts and there was a discussion about propaganda being circulated by the Opposition. Acknowledgement was made of the failures of the economic approach such as: 1. confusion between the role of the state and the private sector, 2. the state was not successful in conducting economic activity, 3. the state not able to mobilize national resources, 4. the mounting energy crisis, 5. the need for nationalism in response to capital flight, 6. free education faltering under budgetary pressures, and 7. school quality of concern to the population.

6  A CLASH OF IDEOLOGIES: JAMAIC… 

161

Despite this he expressed intention to increase benefits such as the minimum wage, NIS pension and senior citizen rates on the public bus system, school feeding and maternity benefits. Forward Ever, Backward Never was the title of the 1980 budget speech in which the discontinuation of the IMF agreement within the context of capital flight due to the rhetoric of socialism was the main agenda item (Manley 1980). The stagnation of the unemployment rate at high levels and the mismanagement of the level of underdevelopment of the economy formed part of the reflections. The identification or development of another alternative to the IMF was suggested but this was negated by the Opposition. Despite this, the Prime Minister insisted that the IMF was irrelevant in any attempts to solve the extreme difficulties being faced by the country and therefore the inevitability that the country would continue to fail tests were they to continue to engage the Fund. He indicated that the breathing room provided by the IMF over a two-year period would be insufficient for the Jamaican context given the low productivity context and suggested that a seven- to ten-year period would be more appropriate. The Fund was accused of treating Jamaica like a developed country and assuming that the carrot and stick approach to development would work through the contractionary approach to economic policy within a short two-year period. Jamaica simply did not have the productive capacity to respond to these incentives. Some may argue, that Prime Minister Manley had not made it any easier with the heavy anti-capitalist, anti-private sector rhetoric early in his administration. The campaign leading up to the 1980 elections was contentious and some reporters claim bloody. The overturning of the administration was associated with the population’s response to high unemployment rates of over 30%, shortages and rationing of food and other critical items; the reduction in the provision of social goods and services; and, the high level of violence which led the population on the brink of despair (Bryan 2011, pp. 188). The changes in the financial fortune of the economy were key determinants of the scope and scale of the social and economic activities that the state implements. In essence, the scope and scale of any welfare agenda would eventually be bound by the economic capacity and financial flows. The newly elected government would soon find this out. Girvan (1984) reports that in all other jurisdictions where such a drastic programme was implemented, the result was either the death of democracy or the overthrow of the government. Girvan (1984) attributes the

162 

C. CLARKE AND C. NELSON

longevity of the administration to Michael Manley’s good will due to the raft of socially uplifting and empowering programmes implemented between 1972 and 1976. Nevertheless, tragedy struck when despite all the sacrifices the economic programmes did not yield the successes expected. Again, Jamaica failed an important NIR test and the EFF was suspended (due partly to external events beyond the country’s control.)

Conclusion The intersection of the IMF prescriptions during the 1970s appears to be the political betrayal that the administration would have been perceived to be committing given the campaign promises to the population. Bernal points out that the IMF prescriptions implied changes to the economic development strategies that were being implemented by the government. The Fund’s programmes were essentially grounded in the framework he referred to as ‘dependent capitalism’. This would have rubbed important party members and stakeholders bitterly after they had waged war on capitalists because of their tendency to repatriate the profits from their operations. They would be pilloried if the very same party did an about face and acceded to the prescriptions of the Fund to return to that status quo. Was it a lack of understanding of these political issues on the part of the Fund? Was it a misunderstanding of the economic issues by the administration? Was it simply a negative mindset against to the elite class in the country? In hindsight, it appears to be a heightening of the impatience of the population with the absence of the materialization of the promises first of emancipation, then of apprenticeship and finally of independence. The desire to re-right the economics of the average Jamaican has by then been more than a century in the making. Self-rule was extremely disappointing; the results of the independence process were not as heady and wildly wealth-creating as they may have been propagated to the populace. British-­ rule and foreign investors were pilloried and the PNP set themselves up as the only administration that could right the insufferable and long-­standing wrongs being faced by Jamaicans. The administration continued to feel pressured from the population. Bernal’s perspective was that the prevailing view in the PNP administration was that the Fund was essentially using the economic programme to derail the domestic political and associated economic model being advanced by the government. In the context of the history of post-­ colonial class and economic struggles in Jamaica, followed by a period of

6  A CLASH OF IDEOLOGIES: JAMAIC… 

163

economic boom but made to be resented by the population just because it was driven by foreign capital. The basis of the administration’s political platform that ushered them into power was the return of these commanding heights. It would appear unthinkable and unpalatable for the administration to even let it be known that they were considering return to the rapacious foreign capitalists for help and financial support. Internally, the party stalwarts and auxiliary stakeholders who had developed and widely articulated views consistent with not just democratic socialism but also communism. These positions were obviously hostile and the antithesis of the so-called capitalism orientation of the Fund and the then Prime Minister would have found it untenable to bring the engagement of a reputed bastion of capitalism to provide support. The Fund nevertheless appears to have been quite aware of these perceptions of them by the Jamaican population. Bernal (1984) referenced an article by Kincaid (1981) that claimed that the fund had considered the social implications as presented by the country authorities whilst they went ahead and developed the technical programme. Bernal nevertheless seems to believe that the IMF did not take the local concerns into consideration when constructing the draft agreement. He also pointed to a difference of opinion about the policy measures and targets that were agreed on between the authorities and the Fund. His writing also suggests that there was very little if any agreement between the parties on any aspect of the programme. The feeling that the proposed agreement contradicted the views and philosophy of the governed. This view was expressed in the last budget speech of Minister of Finance Hugh Small, who had indicated the same. Despite this, there were some elements in the society who believe the opposite. Stone (1978), Perkins (1979b) and Williams (1978), for example, expressed the view that the Jamaican government had to take responsibility for the economic performance. The government had the reigns of the society and economy in its hands and therefore ought to have implemented policies that would correct for the international conditions that eroded the domestic economic situation. These writers could be described as being far more pragmatic and expected the government to take the decisions that needed to be implemented for the benefit of the population and not for the party and the preservation of its ideology. The rhetoric regarding the private sector operations, nationalistic ideas and. Ultimately, withdrawal from the programme was all by a fait accompli as the terms were simply in excess of what could be comfortably

164 

C. CLARKE AND C. NELSON

implemented by the authorities. The issues of ideology and philosophy in a very embryonic economy and society were essentially on a collision course in 1970s Jamaica. The insistence by the capitalists to do things their way was unpalatable due to the observed negative implications of Fund agreements in other developing countries. The administration was faced with two serious costs that they had to weigh during this period. The first was to accept the terms in exchange for a potential economic rescue plan which would erode the political and other capital of the government. The second was to develop an alternative plan whilst continuing negotiation with the Fund. This option required, however, serious resources to replace the large imports of basic food and energy items for the population to survive.

Bibliography Allen, D. (1977, July 9). This loan must work wonders. The Jamaica Gleaner. Bernal, R.  L. (1984). The IMF and class struggle in Jamaica1977–1980. Latin American Perspectives, 11(3), 53–82. Bryan, P. (2011). Edward Seaga and the challenges of modern Jamaica. Kingston: UWI Press. Byles, J. (1979, March 13). The IMF. The Jamaica Gleaner. Dacosta, D. (1979, March 13). Protect us from the protectors. The Jamaica Gleaner. Dell, S. (1980). The international environment for adjustment in developing countries. World Development, 8(11), 833–842. Pergamon Press Ltd. Devlin, R. (1981). The IMF: Physician or mortician? Washington, DC: UNECLAC. Fairclough, N. (2003). Analysing discourse: Textual analysis for social research. London; Routledge. Girvan, N. (1984). Swallowing the IMF medicine in the Seventies. Development Dialogue, 2, 55–74. Girvan, N., Bernal, R. L., & . (1980). The IMF and the third world: The case of Jamaica, 1974–80. Uppsala: Dag Hammarskjöld Foundation. Girvan, N., Bernal, R., & Hughes, W. (1984). The IMF and the third world: The case of Jamaica, 1974–80. Development Dialogue, 2, 113–155. Gregory, C. (1977, April 4). IMF: Gold at the end of the rainbow? The Jamaica Gleaner. Hearne, J. (1978, April 4). The coming of the IMF. The Jamaica Gleaner. Henke, H. (2000). Between self-determination and dependency: Jamaica’s foreign relations, 1972–1989. Kingston: University of the West Indies Press. Hughes, W. (1978, February, 9). No to IMF. The Jamaica Gleaner. Keith, S., & Girling, R. (2007). Bauxite dependency: Roots of crisis. [Online] Available at: https://nacla.org/article/bauxite-dependency-roots-crisis

6  A CLASH OF IDEOLOGIES: JAMAIC… 

165

Kincaid, G. R. (1981). Conditionality and the use of fund resources: Jamaica. Finance and Development, 18(2), 18. LeFranc, E. e. (1994). Consequences of structural adjustment: A review of the Jamaican experience. Kingston: University of West Indies Press. Litvak, I.  A., & Maule, C.  J. (1975). Nationalisation in the Caribbean bauxite industry. International Affairs, 51, 43–59. Manley, M. (1971). Power for the people. Kingston: Self-published. Manley, M. (1972). Better Must Come. Kingston: Speech to the Houses of Parliament. Manley, M. (1973). Politics of change. Kingston: Speech to the Houses of Parliament. Manley, M. (1974a). The politics of change: A Jamaican testament. Kingston: Deustch. Manley, M. (1974b). Unleashing the potential. Kingston: Speech to the Houses of Parliament. Manley, M. (1976). No turning Back. Kingston: Speech to the Houses of Parliament. Manley, M. (1977). Participatory democracy. Kingston: Speech to the Houses of Parliament. Manley, M. (1978). We are not ashamed, 1978. Kingston: Speech to the Houses of Parliament. Manley, M. (1979). Economic development and social justice. Kingston: Speech to the Houses of Parliament. Manley, M. (1980). Forward Ever, Backward Never. Kingston: Speech to the Houses of Parliament. Manley, M. (1982). Jamaica: Struggle in the periphery. London: Writers & Readers. Move, M. o. t. (1974, September 19). What goes on? The Jamaica Gleaner, 1. Neita, H. (2005). Hugh shearer: A voice for the people. Kingston: Ian Randle Publisher. OPM, M. O. o. P. (1977). The emergency production plan. Kingston: Office of the Prime Minister. Perkins, W. (1979a, September 30). Lies, lies, lies. The Jamaica Gleaner. Perkins, W. (1979b, May 11). Whither the contract? The Jamaica Gleaner. Plowman, J. (1978, April 30). Whom does the IMF help? The Jamaica Gleaner. Sasso, R. (1978, April 30). The will and power to recover. The Jamaica Gleaner. Smith, C. (1977, October 10). Trade figures. The Jamaica Gleaner. Stephens, E. H., & Stephens, J. D. (2017). Democratic socialism in Jamaica: The political movement and social transformation in dependent capitalism. Princeton: Princeton University Press. Stone, C. (1977, January 18). Economic Struggle: No easy magical solutions. The Jamaica Gleaner. Stone, C. (1978, May 10). Finance capital and the painful dilemma. The Jamaica Gleaner.

166 

C. CLARKE AND C. NELSON

Stone, C. (1979, June 18). A touch of sanity. The Jamaica Gleaner. Unnamed. (1977, July 5). IMF to the rescue. The Jamaica Gleaner. Unnamed. (1978, April 22). Who did it? The Jamaica Gleaner. Unnamed. (1979a, May 22). The Jamaica Gleaner. Unnamed. (1979b, May 22). More for the workers? The Jamaica Gleaner. Vassell, M. (1978, March 11). The IMF. The Jamaica Gleaner. Williams, J. (1978, March 16). Interesting. The Jamaica Gleaner.

CHAPTER 7

The 1980s and 1990s: Inflection Points?

Introduction The 1970s proved to be a most tumultuous period in post-independence Jamaica. The social demands were numerous, widespread and intense. The government of the day responded with alacrity to these needs through both the legislative agenda as well as the introduction and expansion of the social programmes. Sustainability of the expanded programmes was short-lived as the fallout from the negative imbalance between oil and import prices vis-àvis the prices of exports facing developing countries was uncontainable. When mixed with (i) the socialist leaning of the administration, (ii) the rhetoric regarding the commanding heights of the economy being returned to the hands of Jamaicans and (iii) the unwillingness of the administration to confront the problems and change operations to fit the context, there was an enormous capital flight in all sectors of the economy. The inability to come to an amicable conclusion of a programme with the IMF and when agreed to successfully complete same added to a further erosion of trust in the authority’s understanding and capacity to manage the economy. This created a major challenge in supporting the basic transactions needed to maintain the basic operations of the country much less to support and sustain the democratic socialist agenda. This economic state was c triggered by two major global economic events: (a) reduced preferential prices for Jamaica’s major agricultural products such as banana and sugar, and (b) international oil price shocks due to geopolitical events and which Jamaica was forced to purchase given the nascency of the commercialization of solar energy. © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_7

167

168 

C. CLARKE AND C. NELSON

The Manley administration tried to find and implement an alternative to the Fund. Whilst the Emergency Production Plan designed to generate economic turnaround through self-reliance and self-sufficiency, it was scuttled when the final fallout with the IMF resulted in a cold-shoulder treatment from the international capital markets CARICOM support could not fill the gap. Bakan et al. (1993) indicate that there were huge increases in US bilateral aid to Jamaica linked to the country’s centrality to the United States Caribbean Basin Initiative. US assistance in the last three years of the PNP government totalled US$56 million and for the first three years of the Edward Seaga regime, US$500 million was received. Loans from USAID, Inter-American Development Bank together with capital from commercial banks flowed into Jamaica during this period. However, the die was already cast. Shortages of consumer items—whether real or fabricated—and politically related violence combined with the shrinking economic activity and the looming expiration of the political administration’s tenure brought the situation to a climax by 1980 as the critiques of the government became more and more serious as the economic situation became more perverse. The IMF Agreement of June 11, 1979 was cancelled and reports of violent crimes increased. Dawn Ritch (1980) countered the claims made by Figueroa that the IMF promised growth but none materialized. Ritch countered that the Fund promised money which it gave. It was the government who was to put the money to work to generate the growth therefore the lack of growth was indicative of the failure of the government not the Fund. An article on March 1980 concluded that there was really no alternative to the Fund contrary to what had been promised by Maxwell, Duncan and Munroe (Dunn 1980). The campaign leading up to the 1980 elections was contentious and some reporters claim bloody. Stone (1980), in reflecting on the PNP’s campaign leading up to the election, indicates that the PNP had attempted to give the impression that were it to return to the IMF it would be doing so on its terms, because the Fund was now operating on the party’s terms. Stone counters this by alleging that had the party won, it would have made this claim as part of a propaganda agenda. In 1980 Edward Seaga led the JLP to form the administration in the general election, ousting the PNP which had followed tenets of democratic socialism. The advent of the JLP intimated that there would be an ideological shift as well as an economic one. Jamaica, under the JLP, followed a neoliberal economic policy agenda (Rapley 2001) in sync with the Washington Consensus.

7  THE 1980S AND 1990S: INFLECTION POINTS? 

169

A New Domestic Order The Edward Seaga government made several clear declarations of its approach to leading the country and the role that the state should and should not play in the economy. The private sector was expected to lead the growth agenda with a heavy focus on exports and the government would stay away from productive enterprise. Hoskins (1985) reports that the Edward Seaga government represented a clean break with the socialist past in terms of privatization of government-owned entities that are productively oriented. The new Prime Minister stridently outlined that his government would be principle, hope-inspiring, sane, direction-oriented and restoring foreign relations given the mandate provided by the election. The scale of the election victory was interpreted by Hoskins (1985) as an indication of the absolute rejection of the experienced outcomes of the socialist adventure of the 1970s. Prime Minister Edward Seaga promoted a more pragmatic approach to regional and international affairs. On the matter of Cuba, the Edward Seaga government sent a strong signal by expelling the Cuban Ambassador, recalling students studying in Cuba and cancellation of the alleged, so-called brigadistas programme. There was disagreement with the new PM amongst supporters of his party about this stance against Cuba, particularly the break in the diplomatic ties and there was a perception that this stance was being driven by the US government as part of their anti-Cuba strategy. Reflecting on the change of government, Perkins (1980) alleged that the former PNP government had not been honest with the country by giving the impression that the misfortunes being experienced began recently. Perkins argues that cracks that were not going to be easily fixed had begun to emerge rejected from the 1976 election after which the economic adjustments proposed by the Fund were not even attempted. The budgets presented by the administration throughout their tenure were all focused on instigating a recovery in the economy through several economic and social initiatives. On the economic side the main policy decision was the change to a private sector led export-oriented production structure (Glasspole 1982, 1989; Seaga 1981, 1987). Given the private sector orientation of the government and the relatively low levels of domestic financial capital in the wake of the emigration of the 1970s, the Jamaican investment landscape became characterized by the very levels of foreign ownership that the previous Manley administration had rooted out in the 1970s. Hoskins (1985) even noted that Jamaica became known

170 

C. CLARKE AND C. NELSON

as the ‘new Riviera’ as the economy mostly consisted of foreign investors and a few rich Jamaicans. Hoskins indicates that the motivation for this policy was to enable local firms to produce agricultural exports of competitive non-traditional crops. Later, with the support of the US federal government’s 807 Programme, the free zone programme was established to provide more deliberate large-scale export-oriented operations. The Kingston free zone area provided a factory and warehouse space to the garment and other export-­ oriented factories with tax free and duty-free concessions. Raw materials were imported from the United States, assembled by unskilled and semi-­ skilled assembly workers and re-exported to the United States. Government resources focused on the development and provision of technical assistance for free zone operators to the exclusion of the local manufacturers. In response local producers complained about not being able to access these benefits leading to a change in the rules in 1986 to allow them to subcontract with free zone firms to benefit as well as to eventually be able to operate in the free zone themselves. Between 1981 and 1983, the export of garments from countries participating in the CBI programme to the United States increased over 20% with an average annual rate of 28% between 1984 and 1986. In 1985 Jamaica emerged as one of the four main Caribbean suppliers. The 807 manufacturing enterprises employed predominantly women, employing in excess of 23,000 persons with foreign exchange earnings doubling from 26 million to 50 million between 1984 and 1985. The programme had become pivotal to the economic growth strategy of the government and efforts were made to ensure that investor confidence was not breached in any way. The employees were working in a largely unregulated industry, under operating conditions which led to several issues for the Jamaican working class, who were predominantly women. Because the women employed are predominantly, unskilled, the head of single-parent households they accepted low wage employment, non-unionization poor working conditions and job insecurity. There was no haste to correct these conditions by the government for fear of a reduction in investor confidence and the possibility of the enterprises moving to another country, commensurate with the loss of foreign exchange earnings. The IMF and the World Bank were major actors during this period in providing financial flows and technical assistance on matters related to development issues. The negotiation and arrangements of a new IMF

7  THE 1980S AND 1990S: INFLECTION POINTS? 

171

Agreement ushered the beginning of a structural adjustment programme with a focus on deregulation to reduce the role of the state in the economy and an accompanying Made in Jamaica development programme was anchored by the Bank. Structural adjustment loan agreements with the International Monetary Fund (IMF) and the World Bank (WB) led to an initial phase of liberalization from 1986 to 1988, along with efforts to reform interest rate policies and develop money and capital markets (Peart 1995). The World Bank noted that if there was not a significant increase in the country’s export earnings, the ability to import and increase economic activity would be severely constrained (World Bank 1980). Despite that, the report indicates, however, that this would take time to develop to allow for the non-traditional products and services to make an impact in terms of their contribution to total exports. The World Bank noted that whilst the main benefit of the first loan was to bring temporary relief to the foreign exchange constraints, it also supported a preliminary assessment of the need for reform of the bigger issues that require structural reform over a much longer period through an investment programme to address development issues. This was most apparent in agriculture as in July 1980, Hurricane Allen destroyed significant amounts of cultivated lands. Agriculture provided employment for one-quarter of the workforce who were impacted by the hurricane. The creation of productive capacity for non-traditional crops could not offset the decline in traditional exports such as sugar and bananas, and there was a decline in the production of domestic food crops. In the years 1980–1982 domestic food production fell by 9%, which was 30% below the 1978 levels. Consequently, any devaluation in the currency would have a huge inflationary impact on food prices and overall population health. In terms of infrastructure projects to address the still-remaining social problems, the government moved to implement a large-scale house building drive to provide 2000 houses during 1982. Controls were still being used and in the housing market rent controls were in place to protect the tenant until the supply of owner occupied and rentable housing stock expanded sufficiently. The Private Sector Organisation of Jamaica and a Jamaica Investment Commission were formalized to address the 408 investment proposals that were received and would require 2.5 million square feet of factory space as of September 1, 1981 (Hoskins 1985). The structural adjustment and economic recovery programme would also be

172 

C. CLARKE AND C. NELSON

administered through an advisory council that would also have responsibility of the deregulation of the economy. Within ten months, the Divestment Committee sold six public enterprises to the private sector beginning to undo the previous attempt to control the commanding heights of the economy. Accompanying this was the removal of protections provided to local businesses as cheaper imports to reduce the cost of living and encourage local producers to produce competitively were permitted. Privatization was also pursued leading to the privatization of the National Commercial Bank in 1986, Caribbean Cement Company, government-owned hotels and the media. Reform of the tariff programme was in its second phase. According to Hoskins (1985), industrialization by export rather than the import substitution approach was the new mantra. Four hundred items no longer require import licences and investors were granted tax incentives of up to ten years. In hindsight, however, the private sector found it almost impossible to be fully engaged in the global competitive environment for the goods they were producing given the extended shortage of foreign exchange and the low levels and poor quality of technology available to it. The competition was not just against domestic and regional firms but also against large transnational corporations with comparatively unlimited resources at their disposals—a difficult task for small, extremely sheltered entities. The Jamaican government utilized a structural adjustment loan hoping that this would provide the foreign exchange required for this transformation to a market-led economy with an expanded capacity to produce exports. Despite the rosiness of these intentions, there were flies in the ointment of this free market economy orientation and the pace at which the deregulation advanced without the concomitant support mechanisms. According to Hoskins (1985) this deregulation policy without the same level of advance in the availability of adequate levels of foreign exchange triggered the closure of thirty-three factories in the first three years. Hoskins (1985) indicates that whilst structural adjustment support was there, the local manufacturing industry was not built and organized to compete with imports. As a result, to suddenly thrust them into this highly competitive environment with transnationals with years of expertise and systems was impossible. This point was also acknowledged by the World Bank (1980) who noted that the financing and structural problems facing the Jamaican authorities was significantly underestimated by the Fund. While the World Bank had intended through this loan to help Jamaica produce a three-year

7  THE 1980S AND 1990S: INFLECTION POINTS? 

173

rolling public investment and financing programme, the effect of doing this was temporary as Jamaica’s problems were more assessed as being more intractable than estimated and in the early 1980s the Bank followed up with a second loan to support the development of non-traditional exports as a step towards diversification of the economic structure and sources of foreign exchange earnings. The World Bank was extremely supportive of Jamaica, whereby in 1981–1982 almost 70% of the Bank’s Caribbean loan allocation was channelled to Jamaica. The increase in multilateral aid, reflected the special relationship between the United States and Jamaica predicated upon the adoption of free market economic policies and a neoliberal agenda favourable to the Reagan administration, in contrast to the previous PNP regime. Nevertheless, despite this support from the Bank and the Fund, views from the media reflect continued criticism of these institutions such as by McDonald (1981) based on the experience of other underdeveloped countries with the prescriptions of the Fund—budget cuts, credit restraints and public sector job layoffs—that tended to upset domestic, political and social conditions in a country. McDonald believed that the strength with which these criticisms were voiced internationally enabled Edward Seaga’s government to benefit from easier terms from the Fund in contrast to the terms imposed on the Manley government. Jennifer Ffrench (1981) commented on what she perceived to be high level secrecy regarding the discussions concerning the IMF agreement in contrast to what it was under Manley’s time—very little dissonance emanating from the parties. She felt that Edward Seaga had three key bases for success: the high level of private sector support, the so-called good track record of the JLP in generating growth and the broad consensus about the direction/foundation of the economic model as one to be built on free enterprise. Nevertheless, the need to balance the cutbacks with the capacity of the society to absorb them was aired. Perkins (1981) expressed the hope that Edward Seaga presented to the people, the possibility of them being able to achieve something and in an environment of friendliness. Edward Seaga’s entreaties seemed to have painted the Fund in the most reasonable of lights and as an institution that can be reasoned with in stark contrast to what was said by the previous government. Perkins was of the view that the new PM had provided the people with a basis on which to hope and plan for the future rather than seeing themselves as being hostage to the dictates of fortunes and external powers that are turned against it with no hope of ever being able to

174 

C. CLARKE AND C. NELSON

emerge. The Edward Seaga government seems to have been legitimately able to claim that it was not a contributor to the conditions now facing the people. They were therefore able to condemn the policies being implemented under the IMF programme of the Manley era. Perkins expressed confidence that Edward Seaga would be able to do the proper analysis of the country’s situation and implement the relevant protective measures to correct the problem and that his political future depended on his success in doing what was promised. The public sector investment programme continued with a view to restore, refurbish and expand the country’s economic and social infrastructure. Social relief was provided to those who needed it most through (a) increased minimum wage, (b) tax relief to lower-income categories, (c) the largest food aid programme for all nutritionally at-risk persons such as children, pregnant and lactating mothers and the indigent, and (d) a shelter programme. Emphasis on training of the labour force was demonstrated through annual increases in the allocation to the HEART Trust/ NTA to provide training in a wide category of technical skills. Investments were made in the broader education system through extensive school building and repairing, teacher training and the procurement of a range of teaching tools (Glasspole 1982). Education expenditure was increased by 42% for construction and repairs to primary schools and school furniture secondary school repairs, provision of school lunches and textbooks and the funding of teaching needs. Upgrades were also made to the All-Age schools, inclusive of a five-year programme to improve the educational quality at the early childhood level, fund salaries, teaching materials and support resource centres as well as demonstration schools. Support to the private sector included the provision of raw materials and equipment, the establishment of trade links with the Far East, improved foreign exchange inflows, reduced inflation, establishment of the Agricultural Credit Bank and a factory-building programme, and two development banks were established as well as an agency to drive domestic and external credit (Glasspole 1982). With respect to heal, priority included the restoration of health centres and clinics some of which had closed in the 1970s. The fiscal targets for 1982–1983 included (a) reduction of the deficit by one-half, (b) reassignment of excessive staff in the public sector and no vacancies to be filled unless necessary as well as the implementation of a redundancy programme and (c) a previously announced tax package of J$138  million, which was increased by J$45  million. The balance of

7  THE 1980S AND 1990S: INFLECTION POINTS? 

175

payments deficit was expected to resolve itself through the diversion of foreign exchange from the black market to the banking system within the context of the structural adjustment programme. The achievement of these targets was under threat, however as there was a new wave of declines in foreign exchange resources associated with a recession in bauxite and alumina and oil price increases due to OPEC manoeuvrings. The similarity in these sources of shocks with those of the 1970s might have been interpreted as a harbinger of the challenges that would be presented to the government. The fact that the government had deregulated key areas of protection to firms meant that the economic adjustment would be more severe. In addition, in order to restore balance to the current account and fiscal deficits tight controls on credit would be maintained; a major taxation programme was implemented and planned expenditure was reduced. Prime Minister Edward Seaga was quite pleased with the performance of the economy under his government (Hoskins 1985). All critical sectors had registered positive growth in comparison with the latter half of the 1970s. Overall economic growth was 3.3%, 1% and 1.7% in 1981, 1982 and 1983, respectively. Agriculture, manufacturing and construction sectors grew by 3.5%, 0.4% and 2.5%, respectively in 1981 with construction growing by 26% in 1982. Reserves of foreign exchange grew, capital formation and investment levels expanded by 25%, the current account deficit improved by almost two percentage points. The government was also able to clear its arrears for goods and services as of March 31, 1982 (Hoskins 1985). Inflation rates fell to single digits in 1981. Despite these improvements, inter alia, cracks were beginning to emerge in the government’s economic programme. Hoskins (1985) notes references to the government’s overestimation of the potential growth and recovery that could be achieved in such a short time with such drastic economic reform in such a young economy that lacked the mechanisms to support the private sector and individuals through the dislocations that were to occur. Supporters reportedly felt that the administration was making the population feel that things were better than they truly were. Despite the reported downward trend in the cost of living indicator, there was significant inflation between 1981 and 1983 due to a combination of the devaluation during November 1983 and moderate to large increases in the cost of public transportation and utility. As a result, the single-digit inflation rates recently celebrated returned to double digits—as they were in the 1970s—in less than six months. Despite the growth in agriculture,

176 

C. CLARKE AND C. NELSON

Hoskins claims that the production of domestic food declined by almost 20% in the first six months of 1982 which was preceded by a 45% increase in the volume of food imports in 1981. The Jamaica Agricultural Society attempted to get the government to analyse the local demand for locally produced food however the administration’s policy was focused on production to support the American market and this recommendation was not acted on. By September 1982 the 4% forecasted GDP growth had to be reduced to the recorded 1% due to measurable declines in productivity across the sectors of the economy. Hoskins (1985) reports that internal government projections indicated that the problems would worsen requiring large debt to finance the current account and trade deficits. Another worrying occurrence, that again was somewhat similar with the occurrences of the 1970s, was the migration of the country’s qualified professionals from the public to the private sector or other public bodies due to the conditions of service. In addition, the poorest in the society would be further impoverished as half-a-year later the government halved the expenditure on the new secondary schools thereby reducing the ability of these students to develop marketable technical skills that would make them job-ready. The previously expressed frustration with the education system was intensified with this decision and a wedge appeared in the relationship between the teacher’s association and the government. Hoskins (1985) notes the parallel that this policy presents to that of the Reagan administration in the United States. In the area of housing, the government was criticized for blindly following a market approach to the provision of housing, which was not a feasible approach for developing low-income or no-income families. The Minister of Housing admitted that there was no hope for the filling of the housing needs—which stood at 65,000 units in 1982—using the public-­ private approach. The state would have to play a much more involved role in order to solve this crisis (Hoskins 1985). Former Prime Minister Manley commented that currently, there was the absence of a housing policy and that housing construction had slowed significantly from the 17,381 units in the last four years of the Manley administration to 1100 under the Edward Seaga administration. Manley also alleged that the Edward Seaga government was not reporting fully accurate data regarding unemployment despite the so-called economic recovery and job creation the administration claimed was underway.

7  THE 1980S AND 1990S: INFLECTION POINTS? 

177

Less than two years into the administration that promised a break from the social and economic issues of the 1970s, very little improvement was being experienced by most of the population. According to Hoskins (1985), 300,000 Jamaicans were unemployed reflecting a 27% unemployment rate similar to the rate at the end of the 1970s. This issue became a matter of national concern with the view being that the government had to do something far more proactive than waiting on the private sector to expand in order to get employment to increase significantly. Very soon, emigration of thousands of low-income Jamaicans to the United States soon began to overtake the government similar to that under the Manley administration of the 1970s. This time, emigrants were fleeing from the wholesale implementation of policies that prioritized US businesses and their priorities over local interests. Hoskins (1985) estimates that the number of Jamaicans permanently leaving through a combination of permanent and non-permanent visas was 36,000 per annum. This was a very damning indicator of the success of the government. The 1982 Article IV Consultation under the extended agreement highlights the major chinks in the administration’s plans that led to the subpar economic performance just about a year into the administration’s tenure. In terms of foreign exchange earnings, there was still heavy dependence on the bauxite/alumina industry which was in a depressed state during the early 1980s and was deeper than anticipated in the programme (International Monetary Fund 1982). There was also the impact of severe flooding, a sharp increase in oil prices and uncertainties associated with the election campaign in the 1980s which together, had also contributed to the poor economic outturn. The robustness of Jamaica’s economic recovery was premised on strong performance from bauxite and tourism allowing for the implementation of structural reforms that would allow the sugar and banana sectors to compete effectively in a context where the preferential treatment previously enjoyed was slowly eroding. The Fund concluded that there was not likely to be improvements in the bauxite sector and therefore that there needed to be strong policy action if the government still intended to meet the original fiscal targets. Whilst the Fund acknowledged the efforts of the government in trying to navigate this downturn, the reforms were slow in implementation, the external deficits were expanding, the economy was contracting and inflation was growing due to the low levels of foreign exchange available to imports goods not produced locally. The rehabilitation of public enterprises as well as the delay of public sector

178 

C. CLARKE AND C. NELSON

wage increases and recruitment plans were areas which the Fund pointed to, that urgently needed to be revisited given the fallout. Overall, conditions facing the average Jamaican had returned but was further exacerbated to a deteriorated state by 1983. Shortages, power outages, inefficient transportation and mail services, a depleted health sector, job layoffs at the port, in bauxite and in the sugar industry, led to a serious deterioration in the social situation. Working class Jamaicans engaged in strikes, sickouts, protest demonstrations and work slowdowns. Producers complained that the administration was ignoring their particular issues in the development of its economic policy and they were unable to operate on the same scale as the larger companies which saw some simply producing as much as they can during Easter and then closing down the factor and focusing on sales. Jamaica at various times in its history has found itself of strategic importance in the context of US foreign policy. The 1984 Support Programme of the IMF had conditionalities in concert with structural adjustment programme measures. Being cognizant of the implications for trade and development of the decline in the demand for bauxite for the economy of Jamaica, one can assert that on this occasion there was the clear coherence between US foreign policy and the IMF interests. US foreign policy pivoted on three main objectives concerned with: strengthening the unity of the alliances with the great industrial democracies, the maintenance of the global balance of power as the foundation to build lasting peace; and to create positive and reliable economic relations, ensuring mutual prosperity between the industrial world and the developing nations. A major agenda item was the establishment of a trade and investment agreement with the United States under the auspices of the IMF arrangements being brokered with the IMF. President Reagan created the Commission on Central America headed by Henry Kissinger in July 1983 to mitigate public concern over the interventionist nature of government policies in Central America such as the right-wing El Salvadorian government which was supported, vis-à-vis the socialist-wing Sandinista regime in Nicaragua (Ascher and Hubbard 1989). The idea was that financial aid resources would be insufficient to enable transformation, however international trade and the access to open markets could afford the opportunity for growth, income and development. Consequently, Jamaica was asked to participate in a trade and investment agreement with the United States, resulting in the development of the Caribbean Basin Initiative (CBI). Commodity exports sold to the US increased initially with the US market absorbing 56% of Jamaica’s total merchandise in year one of the CBI,

7  THE 1980S AND 1990S: INFLECTION POINTS? 

179

falling to 38% by 1986. In the first year of the CBI’s operation CARICOM’s demand for Jamaican manufactured products fell. Popular support for the CBI was based on a belief by the JLP that participation would have enabled the creation of jobs and new economic sectors however, the major impact was an increase in imports from the United States. Improvements in the performance of the manufacturing sector was attributed to the importance of the CBI and the introduction of the 807 Programme, which expanded the demand of the United States for Jamaican outputs, the depreciation of the Jamaican dollar and the restructuring of the country’s apparel industry. The anticipated widespread upsurge in private sector activity for the Jamaican economy did not materialize. Growth rates for the bauxite industry were 6.8% and 3% in 1980 and 1981 but mining output declined by 29% in 1982 and had marginal growth in 1983 due to the international recession (Bakan et al. 1993). Bauxite recovery was anticipated through the renegotiation of the bauxite levy and the contractual arrangement to produce for the US strategic stockpile in 1985 only yielded annual growth rates of GDP 1.6% between 1984 and 1987. Increases in extra-regional exports of non-traditional products of about 50% was recorded but between 1980 and 1983 total overseas sales of Jamaican produced goods declined by 22%, attributed in part by a skewed focus on the US market to the detriment of other markets such as CARICOM and the EU. After the 1984 uncontested snap elections due to disputes regarding the voter’s list, the mandate was continued by the Edward Seaga-led government: economic recovery and economic restructuring under the structural adjustment programme with the IMF lending US$697.5 million for the recovery; and the World Bank US$111.2 million for the restructuring. The economic support was consistent with the country’s importance and acquiescence to the agenda of the United States. An unnamed author supported the need for continued pressure for the IMF to review it policies (Unnamed 1984) given the fragile nature and environment in democracies that might not be conducive to production. The article signals the fact that Jamaica seemed to have played a role in the dialogue regarding reform of the IMF notwithstanding the fact that, the challenges being faced by Jamaica were domestic in their origin. The restructuring efforts took specific action in the agricultural sector, which was to be revitalized through AGRO 21 (Agricultural Programme 1983 on the 21st anniversary of Independence), the People’s Cooperative Banks and the formation of the Agricultural Credit Bank. AGRO 21 was to increase private ownership in the sector to increase the number of jobs, as well as boost export earnings. Parcels of land were sold to private

180 

C. CLARKE AND C. NELSON

investors in 150–20,000-acre lots and assistance in pre-feasibility analysis, crop research and technology was provided to support the development of non-traditional agricultural export crops. In 1983 the value of agricultural output grew by 8% due to the increase in acreage devoted to non-­ traditional export crops. However, the expansion was only temporary as some of the structural issues in relation to the agricultural sector remained. Efforts were made to re-orient production away from sugar and to encourage crop diversification. This was not beneficial to small farmers as government assistance and policy was geared to the promotion of large-­ scale production to increase efficiency to the detriment of the smaller marginally efficient farmers. In addition, the exposure to competition in both domestic and overseas market had a negative effect on the domestic market as cheaper food items flooded into the country due to the removal of import restrictions in the early 1980s. The contraction of overseas markets with respect to staple export prices, the reduction in the US sugar quotas after 1984, all served to undermine the productive effect of the small growers producing export crops who found it difficult to remain viable. An innovation under AGRO 21 was a partnership that enabled foreign investors to provide technical assistance, production and marketing services to the smaller local producers who would be contracted to grow winter fruits and vegetables for overseas markets. The partnership broke down when the foreign investors complained about the quality of the produce grown by the local farmers for export and the partnership was aborted at a major loss to the local small farmers many of whom were eventually replaced by larger agricultural units. This most seriously impacted the banana industry which was largely serviced by small farmers. Issues concerning rural unemployment, the dependency on food imports and growing agricultural trade deficits remained to be addressed if Jamaica is to improve its self-sufficiency in food production. It is noted that ‘food imports grew much more rapidly in the 1980s than at any other time in the previous two decades. In 1961 to 1970, Jamaica was a net food exporter, by 1986 food imports had shot up to almost double the value of commodity exports’ (Bakan et al. 1993). An initial phase of financial sector liberalization took place from 1986 to 1988, as a conditionality of structural adjustment loan agreement with the International Monetary Fund (IMF) and the World Bank (WB). Policy decisions in 1985–1986 to reform the financial sector was supported further by the Bank of Jamaica (BOJ) in 1985, being allowed to engage in open market operations by sales of certificates of deposit (CDs) to reduce

7  THE 1980S AND 1990S: INFLECTION POINTS? 

181

money supply and reduce pressure on the exchange rate and Balance of Payments. Interest rates on CDs was determined by the market which allowed the banks to engage in open market operations. Secondly the savings deposit rate linked to the market determined interest rate impacted the average weighted term deposit rate of the commercial banks. According to El-Hadj (1997), attempts were being made to delink monetary policy from the financing of expanding government expenditures. McBain (1997) mentions the paradox of the period, where the growth of financial services and institutions mirrored the decline in real economic growth and queries the relationship between financial development and real economic growth. Another Turning Point The ability of the administration to continue to lead the country waivered. Regarding the economic performance of the country, the JLP administration was granted a waiver by the Fund  with regard to its breach of  the agreed payment on external arrears. Bernal (1985) proposed three conclusions regarding the economic conditions. The first was that there had been an increased pauperization of the Jamaican worker since the re-­engagement of the IMF in the development of Jamaica’s economic policy. Secondly, the impacts of these policies were felt by all classes in the society however, more so amongst workers who have suffered more than even small businesses, a reality which he deemed unfair as these workers were least able to bear the burden. And, finally, he indicated that this pauperization was not due to an accident or the missed quarterly target under the IMF arrangement but that it was directly associated with the intention of the programme itself. The previously referenced increased unemployment rates were associated with an undermining of the ability of workers to exercise bargaining power with employers. The issue of the unemployment index was viewed as a major indicator of the economic performance of the country—regardless of the other indicators being promoted by the administration—as employment was the most important concern facing the masses. Criticisms of the Edward Seaga administration mounted in the media with an unnamed author (1985) contrasting the Seaga administration’s firing of civil servants and disbanding of the crash programmes, akin to Manley’s abiding refusal to implement these prescriptions from the Fund. The author indicates that despite these changes, the nation was still worse off and the only way for the population to rescue itself was through

182 

C. CLARKE AND C. NELSON

another election to choose their path. The feeling was that the government should have been involved in an enlightened struggle against the requirements of the IMF viz. the social and economic realities of the country—the author, instead, believed that the Edward Seaga government had set the country back five years by agreeing to these measures. The 1985 Agreement signed on July 17, 1985 was cancelled July 16, 1986 due to a breach of the NIR target. After the granting of a waiver from the Fund in June 21, 1985 in relation to the extended agreement, the follow-up Agreement of July 17, 1985 was cancelled on July 16, 1986. The Article IV Consultations in mid-1986 report significant declines in the state of the fiscal and current account; overvaluation of the Jamaican dollar, which negatively impacted the ability of exports to pick up; continued declines in bauxite/alumina, as the authorities had delayed implementing any policy adjustments, waiting for a return to the status quo; a burgeoning balance of payments problem in 1983; and further contractions in the bauxite sector as well as in the aid inflows (International Monetary Fund 1987). Local government elections were held on July 29, 1986 and the PNP won the majority of the parish council seats island wide. The writing was therefore on the wall as far as the JLP administration’s ability to maintain power of the government. The popular vote indicated that the tide had officially started to turn against the Edward Seaga administration that had less than three years to the next general elections. The administration eventually began to echo criticisms about the IMF that were made by the Manley administration. According to Christie (1987), what the previous government was indicating in the 1970s—the harsh and inhumane terms of the IMF—was now being experienced by Edward Seaga. Both leaders’ opinion of the Fund had come to a point of convergence—according to Christie, this convergence was due to the basic fact that these elements of the programme could not work in the context of the Jamaica’s situation. In 1987–1988 the fiscal deficit was reduced to 2% of GDP, unemployment rates fell to 23.6%, investment was 25% of GDP and inflation rate was 9.4%, which was the centrepiece of the government’s agenda, as it provided an alternative to devaluation of the currency. Now the economy was firmly operating on four sectors—agriculture, tourism, mining and manufacturing (Seaga 1987). Economic growth rate of 5% and investment rates of 21.2% in 1987; inflation rates of 7.9% and the largest BOP surplus and improved net international reserves were projected for the fiscal year. The government initiated negotiations with the IMF to start a new

7  THE 1980S AND 1990S: INFLECTION POINTS? 

183

agreement on the conclusion of the current one. A new bauxite levy was being considered that would reduce as production increased and there would also be income taxes levied on profit amidst a crash of the stock market in October 1987. Expansion in bauxite production to 1 million tonnes; land reform and land titling was continuing apace. Two types of alternative energy options to oil were being planned—hydro and coal and peat with implementation funded through the National Development Plan. Investments were to be made in tourism, agriculture, construction, roads, electricity, water, education, health, security and prison services. Tourism development would be further enhanced with additional charter flights, promotion and a gateway in Japan. There was significant development in resort towns in terms of roads, water, housing, sewage, cruise ship pier and the airports. In manufacture, factory building was expedited, performance in the garment sector continued and non-traditional exports indicated some resilience. The social programme was to cover education, health, housing, water sewage and social welfare and the programme would be funded largely through normal budget flows. The food stamp programme, the school feeding programme, public assistance and poor relief also expanded. Extensive plans were unveiled in education at all levels from basic schools up to CAST, including, nutritional subsidies, repairs spaces for every child in primary schools, free primary Math and English books, a common curriculum for all children by Grade 6, a teacher upgrading programme, upgrading of secondary schools and All-Ages to high schools, increased allowances to HEART trainees and 1500 more SOLIDARITY projects. In the provision of health-related services, new laboratories and hospitals were refurbished across the island in  addition to the reconstruction of Bustamante Children’s Hospital and the construction of 61 health centres. Extensive plans were drawn for housing through various modalities: site upgrading, housing units and housing allowance loans. Justice was to benefit from the provision of low-flying aircraft, enhanced drug eradication programmes, new vehicles for the security forces and refurbishment of court houses and other facilities. In addition, labour-intensive programmes were implemented to assist the rural poor through road maintenance, drainage/river control and reforestation/soil conservation projects. On the cusp of negotiating a new IMF programme, the idea was to fine tune the existing parameters vis-a-vis any drastic reorientation in terms of economic direction. Fiscal policy reforms would focus on budget management and management of the public sector investment management programme. Monetary policy required the continuation of open market

184 

C. CLARKE AND C. NELSON

operations with a view to manage domestic credit. The foreign exchange auction implied that there would be a commensurate adjustment in the rate if there were movements in international inflation. In order to contain domestic costs, the imperative was to minimize the need for these adjustments as it had implications for wage negotiations to grant an increase of no more than 10% in 1987. Price assumptions were predicated upon the nominal exchange rate of J$5.50: US$1.00 to be maintained in 1988–1989. Another policy focus was to correct the difference between the savings deposit rate and other market determined rates to allow it be determined purely by the market. In terms of the external sector, phased liberalization of exchange controls was still being pursued. Reducing the public sector deficit to 3.7% of GDP from the estimated 5.8% in 1987–1988 was an important target. These targets were consistent with achieving a real growth rate of 4.0% in 1988–1989 consistent with medium term targets of 3–4% per annum. The overall intent when the Agreement expired having met all the criteria, was to continue the economic growth and to lower the external debt position as well as build upon the improvements made in FY1986–1987 and 1987–1988.

Conclusion Whilst the 1987 programme expired as being successfully completed in May 1988. The September 1988 Agreement was the subject of both a waiver and a cancellation due to a breach of several targets—the NIR, external payments arrears, the ceiling on short term external public debt, the limit on the net domestic assets and the financing gap of the public sector—the first two of which cemented the cancellation of the Agreement. There was an about-turn in the views of the Fund across the Western Hemisphere in the wake of the Grenada invasion. According to Forrest (1988) the Fund was being ‘serenaded’ by regional governments in an attempt to secure economic support for their programmes. The author’s view was that the economic situation in these countries was so poor and the leaders of the countries in the region were unable to appeal broadly across the region. Geopolitical developments which clearly demonstrated the resoluteness of the United States in maintaining its interests in the affairs of all countries in the Western Hemisphere was clearly demonstrated and countries were well-advised through these actions to work with the programme prescribed by Western powers.

7  THE 1980S AND 1990S: INFLECTION POINTS? 

185

During the course of the 1980s, the PNP had been reorganizing and redesigning to present itself as a government-in-waiting. Manley had retained his leadership of the party after his resignation was rejected by the party in 1981 (Payne 1992). Subsequently Manley, though continuing to believe in the democratic socialism, changed the emphasis of his utterances to focus more on democratic issues such as electoral lists. Payne reports that the PNP began indicating the end of the JLP’s mandate by 1985. Manley re-joined the scene at the end of the year having concluded medical treatment and began to sketch an economic programme which belied a much more relaxed view of the IMF as integral to the economic framework of the country and of the United States as a natural friend (Payne 1992). The difference being that Jamaica would negotiate and continue to maintain the fixed exchange rate, reverse the JLP’s deregulation, implement a major rescheduling of the debt, engage the private sector and other interests, and establish a national planning council. Entreaties were made to the private sector through the appointment of Claude Clarke, the president of the Jamaica Exporters Association to the Shadow Cabinet in 1986 along with right-wingers David Coore and Ken McNeil. According to Payne, the stridence of the mid to late 1970s were absent. The strategy employed by the PNP in the period leading up to the 1989 elections was to point out the failures of the JLPs economic strategy and emphasizing its commitment to the democratic process. The JLP, having fully committed to the liberal economic policies without seeing significant improvement for the masses and being unable to do anything substantive to help them in the context of IMF and SAL agreements, was unable to mount a response. Payne (1992) indicates that the PNP promised very little beyond economic growth and more attention to social issues. No major manifesto declarations were made as they were done in the early 1970s—the watchwords were moderation and continuity as they were aware that they would be inheriting the US$114 million Stand-by Agreement if they became the government. As was popularly expected, the PNP did win the elections in February 1989 and benefitted from a delay of the March 1989 quarterly test. However, the dollar exchange rate began to slide as the Bank of Jamaica did not have enough foreign exchange to satisfy the increased demand to rebuild post-Gilbert (Peart 1995; Payne 1992). The Throne Speech of 1989–1990 had reported that the economy was in a fragile state as production was declining, the deficit was very high and foreign debt created a strain on the ability to maintain the social programmes (Glasspole 1989).

186 

C. CLARKE AND C. NELSON

The plan was to strengthen the pre-investment appraisal and management processes to improve project implementation. Foreign investment would be encouraged and JAMPRO would be streamlined. Discussions about introducing a new Common External Tariff was arrived at and the General Consumption Tax was to be implemented before the end of the fiscal year. Civil service remuneration was too low so that the Administrative Reform Programme proposed by the World Bank would be resumed. Most notable is the fact debt servicing has become the largest line item in the total budget at $2.38 billion followed by education at $886.9 million. Capital expenditure was reported to be relatively small and was totally funded by the GOJ. The bottom-line was that there was no scope to introduce even the most basic programme under democratic socialism even if there was the intent. Emphasis was also placed upon agriculture and the rehabilitation of lands, with attempts still being made to restore preferential access to the European market and to increase output in poultry and fish. Market development was to be continued by the Urban Development Corporation (UDC) as well as secondary and vocational school, community centres and health centres. Basic, primary and All-Age schools as well as the University of the West Indies required rehabilitative works, while special education and textbook rental was another aspect of the effort in education. Provisions were made for the continued work on the Bustamante Hospital for Children. Commercial bank credit to the private sector was projected at J$500 million for the first half of the year but this rose by more than 200%. As a result, the Central Bank attempted to tighten monetary policy which proved unsuccessful. The second quarter of the fiscal year revealed large net withdrawals of deposits, with banks moving to encash government paper at the Central Bank, leading to the enactment in September 1989 of penalty interest rates on the encashment of government paper as well as global ceilings on commercial bank credit. The foreign exchange market was in disarray leading to measures such as the cessation of the auction mechanism, increasing the interest rate for savings deposits from 13% to 18% and increases in the domestic prices of subsidized basic food imports. Henry (1989) expressed the view that regardless of what was being said, Jamaica was now a colony of the monetary empire that was the IMF. The country, in his opinion, was governed by the IMF. The impact of this was that the rich would be strengthened with the intention that they would implement labour intensive production methods—this,

7  THE 1980S AND 1990S: INFLECTION POINTS? 

187

however did not unfold in the intended way and Henry accuses the entrepreneurs of taking all the benefits for themselves whilst paying workers based only on the 10% wage guidelines. He warned that the day would come when the workers would wise up about these tendencies. There was a shift to the promotion of primary health care, integration into a comprehensive health system, revitalization of community public health schemes and completion of health centres. In the areas of housing there was a commitment to an upgrading project for low-income families and joint venture projects for middle- and low- to middle-income families. As far as the social services are concerned, there was a move towards providing opportunities for self-reliance in production; the development of community-based enterprises and measures to prevent child abuse. Sport was to be used as an aid to engender positive social engineering. There was also the plan to restore the Stadium Complex. A drug eradication programme was to be implemented from primary schools onwards. On January 30, 1990, the government signalled its intention to devalue the Jamaican dollar from 6.5 per United States of America (USA) dollar to 7.00 as well as other measures to tighten monetary policy. Capital expenditures were slashed with the intent to contain the overall public sector deficit for that fiscal year to 7.7% of GDP. The expectations were that the foreign exchange market would stabilize and arrears would become substantially reduced in the coming months against the backdrop of the receipt of the first disbursement of an agricultural loan from the World Bank and the expected seasonal of tourist receipts. Local government elections on March 6, 1990 further cemented the strength of the Manley government with a majority win of parish council seats. The JLP administration would be in a minority position for the next decade until new leadership in that party could provide a fresh perspective and a more inspiring platform after eighteen years of the PNP being in office. Despite the economic realities, McDonald (1990) reiterated the words of Robert Marley in proclaiming that the IMF cannot help Jamaica and therefore advised the government to reject the measures being proposed by the Fund for the new programme and opt, instead, for the country to work and pay its own way. Otherwise, Jamaica would be forever in debt, living off the hard work of the rest of the world. He recommended the stance of the Leader of the Polish Solidarity who wanted to receive access to markets and a fair price for the goods produced by Poland rather than debt forgiveness and write-offs.

188 

C. CLARKE AND C. NELSON

Reid (1990) noted that even as the government entered into new relationships with the IMF, it would continue to fail the associated tests because the population did not view themselves as being the cause and therefore of having the solution to the problems that the government intended the IMF to solve. These views were echoed by Reynolds (1990) who indicated that the failures should bring the population to the reality that all that has been accomplished by the country is a series of failures over the past decade with this estranged attitude to the Fund. The only way to get back to the productivity was for the population to accept its responsibility to correct the problems it finds itself in. Whilst the country did eventually implement the 1990 Agreement with the Fund, there was a breach of the NIR as was characteristic of the performance of the Jamaican programme. This Agreement entailed even more devaluation which Hart (1991) argues would not have the negative impact on imports as predicted by the Fund because the majority of consumer goods and items consumed by the masses were produced locally. There was also the recommendation to allow market forces to determine the value of the Jamaican dollar. Hart’s conclusion was that the harm caused by the IMF was now irreversible. Hadeed (1990) indicates that the country finds itself in a dilemma in having to take more bitter medicine from the IMF after having taken several doses and not benefitting from an improved economy or society. There was no anticipation that Jamaica would receive any sympathy from the Fund as large western powers in control of the Fund had switched their interest to Eastern Europe given the favourable political climate now emerging in these countries such as Poland. The comparison made with Poland by McDonald (1990) though can only work superficially as the Polish story during this period was significantly different from Jamaica. The Polish economic reform programme was based on five pillars. Firstly, their economic programme was supported by an inclusive, egalitarian, well-educated and already socially mobile society, which enabled them to participate in and flourish from the reforms being implemented. Secondly, there was also strong consensus[ that the country needed to become like Western Europe in order to join the European Union as soon as possible and therefore there was a willingness to engage in and support the economic reforms required to support matriculation. The third element was the fact that the policymaking team were of high-quality who were quite experienced in implementing the coming reforms. These processes were reinforced and supported by a

7  THE 1980S AND 1990S: INFLECTION POINTS? 

189

rapid building of institutions, restructuring of the foreign debt, a boom in education and an open and transparent privatization programme that did not produce oligarchs—the final keys to the success of the reform. Jamaica’s reality was one of struggle, for basic survival and the authorities needed immediate cash flow support but they also needed a policy framework that imposed the discipline that Jamaica knew it needed. Wint (1990) acknowledged the bitterness of the IMF medicine but indicated that this bitterness does not automatically translate into it being a bad prescription for Jamaica as Jamaicans should live within their means. He noted that the Fund was not a charitable organization and therefore the people that control the Fund will be looking for an economic return on loans extended. He echoes the sentiments of Perkins almost a decade earlier who warned that the solution for the country’s economic situation is dependent on the Jamaican people and not the IMF. Wint (1990) noted that it was not the IMF who invited Jamaica to the table, but that Jamaicans initiated the borrowing relationship in which it was apparently trapped. Following the general elections of March 1993 that returned the PNP to power, Boxill (1993) affirmed this point and opined that Jamaica’s economy was run by the IMF and the World Bank similar to the way in which the UN and United States run elections in Somalia or Cambodia. Robinson (1995) reports that then Governor of the Bank of Jamaica, Derick Latibeaudiere had opined that the IMF was misunderstood and he felt that most of the blame being put on the Fund was not appropriate given that the Fund had always maintained its focus on macroeconomic (read external account) stability. In the same article, Robinson also indicates Michael Witter’s view that the IMF was no longer willing to lend Jamaica any more money and therefore the relationship will change to a non-borrowing one whilst still being in an IMF programme (Table 7.1). After five agreements over almost ten years, Jamaica had not been able to solve its fundamental economic challenges. Whilst some economic and social indicators—possibly many of the more critical ones—had shown marked improvements thereby enabling the engagement of foreign and domestic investors as well as favourable perceptions in the international capital markets. Despite the recovery at the macroeconomic level, the key variables impacting the average Jamaican had deteriorated far faster than they were able to contend with them. This cost the Edward Seaga-led administration their control of the government. The population was no longer buying the argument that the IMF was the villain, it was patently obvious that the government had the responsibility to lead the country to

190 

C. CLARKE AND C. NELSON

Table 7.1  Jamaica: history of lending arrangements with the International Monetary Fund 1981–1990 (in thousands of SDRs) Facility

Date of arrangement

Expiration date

Amount agreed

Amount drawn

Amount outstanding

Stand-by Arrangement Stand-by Arrangement Stand-by Arrangement Stand-by Arrangement Extended Fund Facility

19-Sept-88

23-Mar-90

82,000

41,100

0

2-Mar-87

31-May-88

85,000

85,000

0

17-Jul-85

16-Jul-86

115,000

41,600

0

22-Jun-84

21-Jun-85

64,000

64,000

0

13-Apr-81

12-Apr-84

477,700

402,800

0

Source: Collated by authors from Bank of Jamaica Report (1991) Jamaica’s Relationship with the International Monetary Fund, May 1991, Kingston

growth as the Fund and World Bank could not lead the process or guarantee positive results. More time for the adjustment period would undoubtedly have benefitted the process but the policy content and scope might also have needed to be carefully developed. Swift deregulation without the readiness of a wide range of private sector interests simultaneously tied the hands of the government to support the poor if financial flows did not pick up. The assumptions underlying the economic programme, however, betray the vulnerabilities that would later erode the ability of the government to maintain progressive economic progress. The PNP was now in control of both local and national government and with a notable majority. Control measures to control the dollar proved futile—increases in interest rates, high fines on banks who broke new credit restrictions, reduction of the frequency of auctions until they were cancelled and the exchange rate fixed, and price increases on basic food items—none of these were successful. The PNP administration failed the first IMF test it sat in September 1989. Austerity did not work. The adjustment was insufficient. Even more drastic measures had to be implemented. Manley had to implement programmes diametrically opposed to the socialist mantra in order to correct the issues. The IMF conditionalities would have to be accepted in order for the administration to regain acceptance at the Paris Club and reschedule its debt. PJ Patterson did his best to share the news of further devaluation to J$7 by sharing with the

7  THE 1980S AND 1990S: INFLECTION POINTS? 

191

National Planning Council a raft of incentives to support export development and the promise of a national development plan focused on human resource development, rigorous expansion of private sector–led exports, emphasis on agriculture and improved domestic savings (Payne 1992). Delays in receiving inflows of foreign exchange from bilateral sources caused Jamaica to fail the March 1990 test. The Fund would hear no argument and grant no allowances despite extensive representations by the Bank of Jamaica and Prime Minister Manley. A second breach was discovered in the shortfalls of foreign currency inflows by the Fund. The relationship between Jamaica and the IMF was, again, in jeopardy. There was unrest due to increased oil prices, political violence and displeasure with the performance of the PNP. A variety of measures were implemented but the exchange rate continued to deteriorate leading to the transition to a floating rate announced in September 1990. Manley was no longer able to continue as Prime Minister due to health issues. Mr. Patterson, his Deputy Prime Minister and Minister of Development, Planning and Production, who ran the National Planning Council and therefore had connected with a wide cross-section of stakeholders in the private sectors, unions and civil society, was able to win the internal leadership contest against Portia Simpson Miller despite having responded only months before resigned due to a scandal in relation to an oil deal. Up to 1993, there was never a time when more interventions to support export-oriented production in the last three years as since its independence. Whether or not this would save the nation’s fortunes would, as indicated by Payne (1992), would depend on the appetite of private agents to access these incentives as the decades evolved.

Bibliography Arnett, V. (1980, June 18). Alternative to the IMF. The Jamaica Gleaner. Ascher, W., & Hubbard, A. (1989). Central American recovery and development. Durham: Duke University Press. Bakan, A. B., Cox, D., & Leys, C. (1993). Imperial power and regional trade: The Caribbean Basin Initiative. Waterloo: Wilfrid Laurier University Press. Beri, H. (1984). Kissinger Commission on Central America. Strategic Analysis, 7, 921–927. Bernal, R. (1985, June 7). The pauperization of labour. The Jamaica Gleaner. Bernal, R., (1993, July 11). No policy changes after IMF. The Jamaica Gleaner.

192 

C. CLARKE AND C. NELSON

Boxill, I. (1993, June 15). Jamaica on course to end foreign aid. The Jamaica Gleaner. Bryan, P. E. (2011). Edward Seaga and the challenges of modern Jamaica. Kingston: University of the West Indies Press. Christie, L. (1987, November 9). Dawning Light. The Jamaica Gleaner. Dunn, J., (1980, March 25). Thwaites. The Jamaica Gleaner. Edward Seaga, P.  G. (1981). Budget speech 1981/82. Kingston: Speech to the Houses of Parliament. Edward Seaga, E.  P. G. (1987). Budget speech 1987/88: Economic recovery and stabilisation. Kingston: Speech to the Houses of Parliament. El-Hadj, S. (1997). Financial liberalisation: Its relevance and experiences in the Caribbean. Social and Economic Studies, 46, 1–30. Ffrench, J. (1981, April 12). Edward Seaga and the IMF. The Jamaica Gleaner. Forrest, R., (1988, August 26). Changing perceptions of the IMF across the region. The Jamaica Gleaner. Forrest, R. (1992, September 25). Decolonisation in reverse. The Jamaica Gleaner. Glasspole, F. (1982). Throne speech 1982/83. Kingston: Speech at the Opening of the Houses of Parliament. Glasspole, F. (1989). Throne speech 1989/90. Kingston: Speech to the Houses of Parliament. Hadeed, R. (1990, January 11). A challenge to the IMF. The Jamaica Gleaner. Hart, H. (1991, August 30). God bless the IMF. The Jamaica Gleaner. Henry, R. S. (1989, December 29). Jamaica and the IMF. The Jamaica Gleaner. Hoskins, L. (1985). Jamaica under Edward Seaga: 1981–1983. New Directions, pp. 26–35. Huey, J. (1980, October 1). Jamaica faces the crunch. The Jamaica Gleaner. International Monetary Fund. (1982). Staff report for the 1982 Article IV consultation and review under the Extended Arrangement. Washington, DC: International Monetary Fund. International Monetary Fund. (1987). Staff report for the 1986 Article IV consultation and request for Stand-by Arrangement. Washington, DC: International Monetary Fund. International Monetary Fund. (1993). Staff report for the 1993 Article IV consultation and first review under the Extended Arrangement. Washington, DC: International Monetary Fund. McBain, H. (1997). Factors influencing the growth of financial services in Jamaica. Social and Economic Studies, 46, 131–167. McDonald, C. (1981, April 3). The IMF. The Jamaica Gleaner. McDonald, R. (1990, January 2). Abandon the IMF. The Jamaica Gleaner. McKoy, D. (1992, September 25). Jamaica will not revoke membership with the IMF. The Jamaica Gleaner.

7  THE 1980S AND 1990S: INFLECTION POINTS? 

193

Payne, A. (1992). The ‘New’ Manley and the new political economy of Jamaica. Third World Quarterly, 13, 463–474. Peart, K. (1995). Financial reform and financial sector development in Jamaica. Social and Economic Studies, 44, 1–22. Perkins, W. (1980, August 15). A strategy of concealment. The Jamaica Gleaner. Perkins, W. (1981, April 24). Edward Seaga’s Renaissance. The Jamaica Gleaner. Rapley, J. (2001). Convergence: Myths and realities. Progress in Development Studies, 1, 295–309. Reid, C.  S. (1990, June 28). Passing or breaching the IMF tests. The Jamaica Gleaner. Reynolds, C.  R. (1990, July 9). Bewitched, bothered and bewildered. The Jamaica Gleaner. Ritch, D. (1980, January 31). Waste and Mismanagement. The Jamaica Gleaner. Robinson, R. (1995, September 29). The end of global capitalism?. The Jamaica Gleaner. Stone, C. (1980, November 17). The IMF & Jamaica. The Jamaica Gleaner. Unnamed. (1984, November 7). Need for review. The Jamaica Gleaner. Unnamed. (1985, November 9). IMF policy. The Jamaica Gleaner. Unnamed. (1992, September 23). IMF public relations policies. The Jamaica Gleaner. Wint, C. (1990, January 19). No time for panic. The Jamaica Gleaner. World Bank. (1980). Program performance audit report: Jamaica first program loan (Loan 1500-JM). Washington, DC: World Bank Operations Evaluation Department. Xyminies, M. (1993, August 24). Jamaica and the IMF relationship. The Jamaica Gleaner.

CHAPTER 8

Economic Policy Independence: Jamaica’s Initial Experience

Introduction Michael Manley made history in 1989 as the only leader in the Third World to have been re-elected after a previous electoral defeat (Payne 1992). He did this after receiving reaffirmation of the validity of his leadership of the PNP, after his resignation was rejected. During his time as Leader of the Opposition, he focused on pointing out the failings of the government to bring about their promised improvements in the lives of the Jamaican people. Manley dialled down the democratic socialism rhetoric of the mid-tolate 1970s and began the process of entreating the private sector and trade unions to support the party using instead a focus on democratic issues and monitoring the performance of administrations versus the party’s promises. On his return to Jamaica House, Prime Minister Manley and his team inherited the 1988 Stand-by Agreement, which showed signs of unravelling, and had no option but to implement the measures recommended by the Fund. The IMF could be interpreted as taking a very hard line during this period after having been accommodative by waiving two SBA Reviews due to the preoccupation with Hurricane Gilbert and the transition of power following the 1989 election. There were two slippages in the programme—September 1989 and March 1990—the latter of which both the Bank of Jamaica (BOJ) and Prime Minister Manley himself wrote to the IMF about them. Both appeals were ignored by the IMF and in a surprising and radical change of government policy, the Jamaican dollar was allowed to float in September 1990 albeit within the context of fewer © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_8

195

196 

C. CLARKE AND C. NELSON

controls on foreign exchange (International Monetary Fund 2000). Prices on petroleum and diesel were deregulated as part of what Manley and his Deputy Prime Minister, P.J. Patterson proclaimed were only part of the overall change in the economic direction of the country (Payne 1992). The abandonment of the exchange rate auction led to an immediate increase in the exchange rate from J$5.50 to J$6.50, with each banking institution being able to set its own exchange rate. This somehow led to a perception of instability given that the population had become used to a fixed exchange rate at each bank counter. Without proper understanding and no mechanism to correct these issues, the rate increased further  to J$13.97 on September 25, 1991 (International Monetary Fund 2002). Tangentially, the Prime Minister announced the withdrawal of the government from attempting to increase production by its  direct involvement, as whilst this had yielded some social justice, it had not resulted in any economic growth. He indicated his new position, that only the productive efforts from the smallest to the largest member of the private sector could generate the long-desired economic growth. He acknowledged the pain that this new direction was likely to invoke on the population, in the form of increased prices whilst wages would remain relatively the same, indicating that the economy would become more efficient, thereby delivering on the promised social justice goals of the PNP. Perhaps as an indicator of this fundamental change the Cabinet was shuffled and the Ministry of Investment and Commerce was reopened to engage the private sector to bid for the entities on the divestment list (Table 8.1). The overarching goal of policy in this period was to advance the integration of the domestic economy into the global economy through various

Table 8.1  Jamaica: History of lending arrangements with the International Monetary Fund (in thousands of SDRs) 1990–2000 Facility

Date of arrangement

Expiration date

Amount agreed

Amount drawn

Amount outstanding

Extended Fund Facility Stand-by Arrangement

11-Dec-92

16-Mar-96

109,125

77,750

0

28-Jun-91

30-Sep-92

43,650

43,650

0

Source: Collated by authors from Bank of Jamaica Report (1991) Jamaica’s Relationship with the International Monetary Fund, May 1991, Kingston

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

197

programming with the World Bank (McBain 1997). As the administration began a full march to liberalization drum, in accordance with the requirements of the IMF and as part of a World Bank SAP, a modified deal was approved in November 1990, for the next five months with an allowance for a J$100 million social programme for direct employment on infrastructure projects, training, health and education (Tennant 2006). The government was forced to reduce the supply of foreign currency to the private sector, in order to meet the debt repayments and accumulate the required level of reserves. High oil prices reared its head again, this time as a result of the Gulf War, which also impacted global tourism and tourist flows to the island, which altogether  combined to significantly improve foreign exchange inflows. Despite the efforts of P.J.  Patterson as Minister of Finance, to engage the IMF’s  Compensatory Finance  Facility (CFF), designed to assist the shortfalls in export earnings in primary commodities and a follow-up Stand-by Arrangement with them, he was forced to impose new taxes and reduce subsidies. None of these actions solved the foreign exchange problem and the view of the party and its image was further worsened by the slide in the exchange rate to J$9.50. Manley’s leadership as Prime Minister after the 1989 elections lasted only three years due to illness and was succeeded by PJ Patterson who survived a scandal as Minister of Finance. Patterson announced a new SBA for FY1991–1992 and the intention to seek an IMF EFF that would provide a longer period for reforms to be implemented. A year after the dollar was allowed to float, the government removed all restrictions on foreign exchange with support from the private sector who claimed that the restrictions only fuelled speculation (Payne 1992). Over the next three months, rapid changes occurred that negatively impacted the  cost of living in the economy—the dollar stood at J$20: US$1, there were work stoppages and threats to do so among various public sector workers and inflation for the twelve-month period ending August 31, 1991 was 56%. Internally, the PNP was in an uproar over this unabashed dalliance with deregulation and liberalization which were in a  direct contradiction to the tenets of the party. Manley remained firm in his commitment to the policy direction and was eventually forced to shuffle the Cabinet again, installing Hugh Small as the Minister of Finance who immediately took action to reinstate the Stand-by Arrangement. Patterson was committed to the policy direction laid down by Manley. Payne (1992) opines that the policies implemented by the government provided the private sector with the best incentives for investing in Jamaica and that the success of the policies would depend heavily on their ability to engage the opportunities so that the self-sustaining growth, dreamed of

198 

C. CLARKE AND C. NELSON

by previous leaders, would become a reality. Despite the critical role being played by the IMF, in 1992, Prime Minister Patterson appeared to be resolutely against the dominance of the IMF in the affairs of Jamaica and announced the intention of the government to sever ties with the IMF by 1995 (Unnamed 1992). The Prime Minister reportedly announced, that were Jamaica not to sever ties by this date, it would mean that its economic policies of enhanced deregulation and liberalization of the economy would have failed, thereby laying down the ultimatum to his Finance Minister and other policymakers. Forrest (1992) presents positives and negatives of the IMF agreement as being the imposition of fiscal discipline and deep cuts in expenditure on infrastructure and  in human capital, respectively. He indicated that Jamaica’s relationship with the IMF was like that of two lovers who embrace each other in one moment and in another, are disgusted with each other—neither willing to end the relationship permanently. He further ridiculed the idea that Jamaica could ever get rid of the IMF as nothing but a fantasy. Instead, he proposed that Jamaicans try to look at the positive side of the IMF agreements and also prepare for a future where any further danger of an IMF pitfall can be avoided. There was caution by McKoy (1992), who indicated that something had to be done to help the poor whilst still meeting the requirements of the IMF. Xyminies (1993) bemoaned the realization of large increases in the cost of the living on the poor and admonished that the country could be great, however it would have to pull itself out of the current state and neither politicians, nor the IMF can do it for us. The sustainability of borrowing from the Fund to keep the country going was also questioned by the author. Policy Independence: At Last Whilst growth had picked up in 1991 and was expected to continue to increase in 1992, the year of the Extended Agreement and there was also surpluses on the current account and the public sector account (International Monetary Fund 1993). There had been a reduction in the number of employees in the public sector by 11.4% and the government was struggling with the perception in the population, that government would have to increase the wages of public sector works in order to keep qualified workers in Jamaica. Private sector wages had increased by 40% and 35% in 1991 and 1992, respectively. The stock of external debt had declined and would continue to do so to less than 85% of GDP. Public sector

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

199

borrowing requirements had declined from 12.5 in 1988–1989 to one-half of 1% in 1991–1992. The reform agenda had included structural reforms of the tax system, reduction in subsidies, making the public sector more efficient through the use of more market prices, rationalization of tariffs and liberalization of the foreign exchange market. However, these macro numbers belie the impact that the changes in the financial sector would wreak on the economy for the next three decades. Between 1990 and 1992 Jamaica dismantled exchange controls, instituting a system of authorized dealers for foreign exchange trading. The growth of banks from 154 in 1985 to 201 in 1993 (Peart 1995) led to assets totalling J$142.4 billion at the end of 1997 representing 50% of the total assets of the financial sector (Stennett et al. 1998). Rapid expansion of Jamaica’s financial sector occurred between 1991 and 1997, however a shortage of capital as well as asset quality problems at several banking and insurance institutions generated a crisis in the sector. The crisis was generated by a collapse of the real estate and equity markets and liquidity problems in the banking and life insurance sectors. As these problems were revealed, panic grew within the financial sector prompting the government to respond in a manner to preserve relative calm and bolster confidence (Kirkpatrick and Tennant 2002). It is argued by (Dean 1998) that Jamaica’s liberalization of internal and external markets was premature as the preconditions for the process to be initiated were absent. This essentially stemmed from the reality that the foreign-owned bank branches operating in Jamaica, being subject to the prudential requirements of their headquarters, were under very little supervision and regulation from the Jamaican authorities (Naranjo and Osabela 2003). These foreign banks were not in favour of the implementation of domestic regulations and therefore there was really no need for them to implement an appropriate regulation regime. The  subsequent nationalization of these entities in the 1970s therefore, left a regulatory void as the prudential standards previously applied disappeared and given the social justice agenda of the administration the development of a replacement regime was not a priority and very little was done to safeguard the system during this period. The privatization efforts in the 1980s included a number of the financial institutions that were nationalized in the decade prior, beginning with 40% of the shares of National Commercial Bank (formerly Barclays Bank) in 1986 and, in 1991, Workers Savings and Loan Bank (Naranjo and Osabela 2003; World Bank 2004). Simultaneously, entry to the sector was widespread given the very low barriers to entry in the context of low supervision and regulation.

200 

C. CLARKE AND C. NELSON

The simultaneous advance of a deepened deregulation and liberalization regime in the late 1980s–1990s countenanced large capital inflows taking advantage of the free regime in the sector and heightening the vulnerability of the system. Monetary policy eventually rose to the challenge and was eventually successful at controlling inflation. With respect to the supervision and regulation of the privatized entities and the proliferation of financial groups, new legislation and amendments to legislation were promulgated in 1992, however, it would take time for the relevant entities to develop the capacity to supervise, monitor and intervene in accordance with the framework provided by the Acts. The 1993 Article IV Consultation points to the emergence of wrinkles in the foreign exchange markets in the context of widened spreads in the official interbank rate and the illegal foreign exchange markets to 10% with leakages into the parallel markets. The escalation of lending rates was particularly deleterious to the path of businesses in particular who found it difficult and eventually impossible to keep up with the revised repayment schedules. As non-performing loans escalated, financial institutions began to utilize BOJ overdraft facilities to provide temporary liquidity which attracted high charges and threatened the viability of the local financial institutions. Local banks then sought yields through large scale investments in real estate, tourism and agriculture and placing less emphasis on traditional banking endeavours. Because insurance companies within a conglomerate were not subject to the sterilization requirements up to 50% of its funds at the BOJ or pay taxes on deposit interest, the banks utilized these opportunities to generate business on their books. Simultaneously, the structure of life insurance policies which prepaid underwriters and therefore created negative cash flows until accumulated premiums covered these costs, impacting the balance sheets of these entities. In order to cover claims, short-term loans were accessed at interest rates of 35% and higher (Seaga 2018). Interestingly, foreign owned banks did not take this approach and remained firmly in their core activities. There was also a suspension of purchases of foreign exchange by special agents of the BOJ who were thought to be operating with irregularities. Monthly inflation was to be kept below 1% per month by the end of 1993–1994 however, the large tax package that was implemented yielded a total inflation of 15%  in comparison with the 6.5% annual projection. Just before the March 1993 elections, the government awarded a wage increase that would cause the wage-to-GDP ratio to increase far greater than programmed and the programme slippage was

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

201

compensated for by a large tax package focused on indirect measures. Whilst the Fund commended the authorities for taking action to counter the likely programme slippage, it noted the need to keep close tabs on the fiscal performance to ensure that  it is more consistent with the stated programme objectives (International Monetary Fund 1993). As the fiscal authorities began to run deficits during 1992, the instruments used to back the deficit were held by the Bank of Jamaica and the commercial banks thereby resulting in increased debt in the system. Naranjo and Osabela (2003) indicate that the recommended background for liberalization of the interest and exchange rates include sustained fiscal balance, currency stability and prudential regulations. Since these were missing, one could therefore conclude that the Jamaican financial sector, though eager to benefit from deregulation and liberalization, was inadequately prepared to operate in this type of environment. Left largely unchecked and with the mandate from shareholders to maximize profits, financial institutions began to take on greater risks. Building internal reserves and capital bases, provisioning for non-performing loans and other forms of impairment were overlooked in the quest for profit. Another dimension of this risk-taking and result of the fragmented financial regulation and disparate tax rules resulted in the practice of regulatory arbitrage within financial conglomerates (International Monetary Fund 1998a). These tended to be comprised of several types of entities including, at times, commercial banks, merchant banks, construction societies, insurance companies and investment and leasing entities. This provided a petri-dish for contagion and domino effects within the conglomerate, across financial institutions and across other sectors of the real economy. The available long-term funding characteristic of the insurance industry was used in their banking institutions in an attempt to generate higher rates of return. The risks associated with these types of transactions were not recognized in the existing frameworks and so credit risk from this source went unchecked (International Monetary Fund 1998b). Credit expansion for private consumer use expanded dramatically and bank viability models were based on unrealistically optimistic scenarios for repayment that did not materialize. Eventually this expansion manifested a credit boom due to the sudden expansion in deposits at commercial banks from US$1.6 million in the early 1990s to US$3.3 million in 1998 and loans totalling US$690 million in 1990 up to US$2 billion in 1997 (see Table 8.2). The sector’s contribution to GDP registered 16% in 1994

202 

C. CLARKE AND C. NELSON

Table 8.2  Changes in liabilities and loans and advances of commercial banks in Jamaica: 1990–1998 Year

Liabilities in commercial banks (deposits) (J$)

Loans and advances of commercial banks (J$)

1990 1995 May 1997 May 1998

10.5 bn 89.0 bn

8 bn 46 bn 69 bn 46 bn

Source: Collated by authors from the speech Storm in a Teacup: Crisis in Jamaica’s Financial Sector given at the Adlith Brown Memorial Lecture by Gladstone Bonnick delivered at the Thirtieth Annual Conference of the Caribbean Centre for Monetary Studies held in Nassau, Bahamas, October 1998

compared to 7% in 1987. The number of banks and insurance companies increased to 105 in 1995 up from 67 in 1989. Underlying this growth, however, was an increase in transaction between related parties, mismatches between the maturity of liabilities versus the returns to assets/investments and mismatches between the currency of assets and liabilities. The extraordinary growth experienced during this period alongside the highlighted risks and low controls to address these issues have since been identified as the key indicators of a financial sector crisis (Naranjo and Osabela 2003; Kirkpatrick and Tennant 2002). In essence, the crisis engulfing the nation were of internal origin caused by inadvertent failings of domestic regulations (Seaga 2018). Following liberalization the vulnerability of the financial sector had increased as well as their fragility, which engendered greater financial risk by banks and moral hazard, attenuated by weaknesses in the regulatory and supervisory systems (McBain 1997). A deep understanding of markets and the possibility and dimensions of the failures of markets was absent from policymaking processes that had committed to the implementation of full liberalization of the financial sector—beginning with the exchange rate and then the controls on the holding of foreign exchange attendant with slippages in the rate, capital inflows in search of yield and the incentive problems that were likely to unfold. In order to have prevented the market failures, the Bank of Jamaica would need to have had sufficient reserves—which were reportedly negative at the time—to

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

203

support the system in the event of capital flight—in order to meet the inevitable demands for foreign exchange (Seaga 2018). The 1994 fiscal agenda entailed the extension of significant credit to the private sector that would exceed the projected growth in nominal GDP as well as an increase in public sector wages that was larger than the increase in inflation that would generate problems in achieving the inflation target. The rate of increase in prices had slowed since the previous consultation and the fiscal position had strengthened. The 1994 Article IV Consultation indicated the Fund’s approval of the authorities’ intention to improve financial system supervision as well as the plans to increase competition in the foreign exchange market (International Monetary Fund 1995). Despite the relatively diversified types of financial institutions and product offerings, the market was fragile and unable to cope with the rapid changes of fundamental relationships during the early 1990s. The basic functions of banking—lending and borrowing—became extremely high risk as there were mismatches in every dimension as the sector scrambled to continue operating in a very uncertain market. Dean (1998) argues that as a consequence of Jamaica not possessing well capitalized and supervised financial institutions, macroeconomic balance and stability, as well as an exchange rate close to equilibrium, that liberalization was premature with a propensity to create problems. Financial liberalization, deemed to be a prerequisite or the critical route whereby developing nations within the global environment are able to exploit the opportunities and take advantage of global financial markets, was in turn, pursued by Jamaica. Table 8.3 provides a selection of the key events of this crisis. The mismatch of assets and liabilities of insurance companies, led to various forms of insolvency in the various institutions (Ministry of Finance 1998a). Given the scale of the problem, the government was intervening in the sector to address illiquidity, insolvency, weak management, the structure of ownership and control and the regulatory framework. In response to representation made to the Finance Minister, financial institutions began submitting their financial information as the Minister expressed a willingness to assist (Seaga 2018). As a consequence of the recommendations made during the period, Financial Sector Adjustment Company Limited (FINSAC) was created in 1997 with the function to intervene, rehabilitate and restructure financial institutions and divest the remaining assets. The initial fund allocated to FINSAC was $6.3 billion. This proved a woeful underestimate of the intervention that would eventually be needed. Efforts to protect the depositors of Blaise Financial Entities (BFE)

204 

C. CLARKE AND C. NELSON

Table 8.3  Chronology of events in Jamaica’s financial sector crisis Period

Occurrence

Oct-­95

The fourth-largest bank, Century National Bank (CNB), runs into significant liquidity problems CNB is intervened and the government assumes temporary management and announces initially limited coverage of depositors Citizens bank (6% of the system) is affected by runs following rumours of insolvency Eagle (2% of the system) is affected by runs The government establishes the Financial Sector Adjustment Company Limited (FINSAC) with the mandate to restructure, merge and capitalize financial institutions The prime minister announces a blanket guarantee FINSAC begins making capital injections in the financial sector with eagle financial network FINSAC purchases loans granted by the central bank as liquidity support to the financial system. In return, it pays with its own securities FINSAC makes further capital injections in four financial institutions Parliament passes the amendment to the financial institutions act and to the banking act During the last quarter they also pass the amendments to the building societies act and to the industrial and provident societies act FINSAC acquires shares in the largest bank and intervenes workers financial entities Parliament passes the deposit insurance scheme law Horizon merchant bank is intervened

July-­96 Dec-­96 Jan-97

Feb-­97 Mar-­97 Apr-­97 May-­97 Oct-­97

Feb-­98 Mar-­98

Source: Collated by authors from Laeven and Valencia (2008)

and Century Financial Entities (CFE) in 1994 and 1995 led to a cost to the public sector of J$972 million and J$10 billion respectively. The Eagle Financial Group required $5 billion. Table 8.4 presents the global scale of the problem from the point of view of the number of accounts and the total dollar value. From another vantage point, the FINASAC intervention occurred in six of the nine commercial bank accounting for 60% of system deposits, five life insurance companies responsible for 90% of premium inflows; 30% of merchant banks and several building societies that were the only banking relationship for a non-negligible share of the population. The assimilation of the costs of absorbing these losses in full increased the public debt and fiscal

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

Table 8.4  Summary of planned FINSAC interventions in 1999

205

Type of account

Number of accounts J$ value

Deposit Insurance policies Pensions Total

15,000,000 569,000 55,000 2,124,000

68.7 m 174.4 19.02 bn 19.27 bn

Source: Collated by authors from FINSAC Annual Report (1999)

deficit with the former debt servicing obligations being 60% of revenues in 1999–2000 (Department for International Development (DfID) 2001). No compensation for the 25,000 non-performing loans totalling J$104 billion were extended. For the next decade, the government’s macroeconomic policy was dominated by efforts to contend with resolving and servicing the debt, rebuilding the private sector, building out an appropriately risk-based regulatory framework whilst holding the line on the progress in the social sector. As a result, the budget surpluses of J$3806.3 million in 1995–1996 regaled by the Fund in its Article IV reviews turned into a deficit of J$14,966.1 million in 1996–1997 and escalated further to J$19,961.6 million in 1997–1998 and J$18,693.1 million in 1998–1999 (Bank of Jamaica). Prime Minister Patterson announced the government’s intervention through FINSAC in February 1997 to include depositors, pension funds and policy-holders’ funds in licensed/authorized institutions. This move created a sense of calm and prevented widespread capital flight (International Monetary Fund 1998) associated with uncertainty about the fairness and speed of the resolution process. Operationally, FINSAC was to intervene through negotiation and recapitalization or closure on an agreed schedule (see Table 8.5). Rehabilitation would be done in phase two for the entities that based on a restructured portfolio, rationalization of branch network and improved management controls. The restructuring would also include the framework for supervising and regulating all these entities. In the third and final phase, divestment of assets, capital recovery, finalization of the legislative framework for the financial sector would be effected and FINSAC would be wound up (Bonnick 1998). Following the pronouncements made by the government that there was no need to continue a borrowing relationship with the IMF as a testament to the achievement of its management of the economy, the Fund

206 

C. CLARKE AND C. NELSON

Table 8.5  Three-phase mandate of FINSAC Phases

Objectives

Notes

Intervention

Negotiation with owners/ managers Support through an orderly, recapitalization process Sector study Sector strengthening: reduce number of entities and restore viability of customers

Involved fifteen banks, twenty-one insurance companies, thirty-four securities firms and fifteen hotels

Rehabilitation

The following steps were utilized:  Evaluation of recovery  Refinance/close  Forensic audit of institutions  Asset management and disposal  Addressing non-performing loans  Redevelopment of sector and institutions

Prevent repetition of crisis through enhanced legislative, supervisory and regulatory environment Reduce short-term systemic risk without moral hazard issues associated with government guarantees Divestment of assets

Reprivatization where possible

Source: Collated by authors from the speech Storm in a Teacup: Crisis in Jamaica’s Financial Sector given at the Adlith Brown Memorial Lecture by Gladstone Bonnick delivered at the Thirtieth Annual Conference of the Caribbean Centre for Monetary Studies held in Nassau, Bahamas, October 1998

itself agreed that Jamaica would not require any rollover of support from the Fund beyond 1995. Reserves were noted as being substantial, the BOP was anticipated to be in surplus of $95 million on average for fiscal years 1996–1997 to 2000–2001, there was net repayment of the external debt and the current account deficit was expected to become a surplus in FY1997–1998 and beyond (International Monetary Fund 1995). This comment has to be interpreted as a stamp of approval for the economic management of the economy thus far and perhaps an indication of the seriousness of the administration in maintaining the economic trajectory and deliver on any targets it commits to. Nevertheless, in hindsight many have asked the question of to what extent the outcomes would have been better had Jamaica continued an active policy relationship with the Fund.

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

207

The truth is that some aspect feats achieved under the EFF were not could not be claimed by any administration over the previous two decades. Although the review sounds a caution regarding the ability to achieve the inflation targets given the size of the wage settlement, the overall view of the fund was positive. The authorities were praised for the speedy corrective action they took in response to developments whilst ensuring that their actions were consistent with the medium-term programme. The receipt of such praise from the Fund must have been a signal to the population that the economy was indeed going in the right direction and that things were turning around. The incentives offered for private sector expansion were taken up by local investors who joined the entrepreneurial class and began to invest. One noteworthy point was in relation to the Bank of Jamaica which was wrestling with the challenges of maintaining the exchange rate, preventing a build-up of the reserves that would negatively impact its ability to control the growth of the monetary base and controlling the liquidity in the banking sector to prevent a currency crisis. The major transformation of the economy through the implementation of series of structural reforms and strengthening of the management of the macroeconomy which led to an improved external position but the authorities noted that inflation had very volatile over the same period— increasing from an average of 14% between 1985 and 1989 to 20–35% between FY1992–1993 and FY1993–1994 and then 100% in FY1991–1992 (International Monetary Fund 1996, 1998). The need and inability to achieve and maintain low, stable inflation rates were a major concern of the IMF Staff, who could no longer mandate the authorities to implement any particular measure as Jamaica was no longer in a borrowing relationship with the Fund. This presented a particular turn of events that perhaps was a relief to the authorities who were now free to determine their own economic and social destiny whilst maintaining the seal of approval to the international financial community. During 1995, the government pledged fiscal responsibility in not spending any of the planned revenues until they were received. Interest payments were now contained at 12% of GDP; however, domestic interest rates were forecasted to remain high (International Monetary Fund 1996). Concerns were indicated relating to changes in the financial sector as well as the excessive reliance on monetary policy to prevent significant deterioration in the value of the currency in the context of continued increases in wages and prices, which overall will increase the likelihood that there will reversals of private capital inflows and therefore contribute to lower

208 

C. CLARKE AND C. NELSON

economic growth. The Bank of Jamaica was very active in trying to control liquidity using open market operations. Spreads at deposit taking institutions across the system continued to be relatively large exceeding 20 percentage points, taking lending rates as high as 58% (International Monetary Fund 1996). The Fund Staff warned that these difficulties would undermine the effectiveness of the government’s demand policies. ‘Til Debt Do Us Part?’ Article IV Consultations in 1997 indicate further deterioration in the financial sector that the authorities warn will threaten the public finances and therefore there is a need to note that it needs to be budgeted for. High fiscal deficits were creating difficulties for the authorities to continue to maintain restraint in the credit policy and maintain international reserves (International Monetary Fund 1997). The authorities were advised to change its mix of policies in order to prevent further fiscal imbalances. The publication of the difficulties in the financial sector was noted in the context of the government’s policy to increase the role of the private sector in all areas of the economy as they had the potential to worsen the burgeoning fiscal problems. Interestingly, inflation rates were reportedly down to single-digit and attributed to the stringent monetary policy being implemented in order to curb the sharp loss in net international reserves as well as a substantial depreciation of the Jamaican dollar. Public finances shifted sharply from a surplus to recording a deficit as did the overall public sector deficit. In addition, the Fund Staff expressed concern regarding the overly optimistic revenue projections and the potentially pending support required by the financial sector (International Monetary Fund 1997). Note was also made regarding the elections that were due March 1998. As the policies continued to evolve real interest rates began to climb and GDP growth began to decline with negative effects on the health of the financial system and the government affirmed its continue support to the sector in order to prevent capital flight. Poverty data indicated that 32% of the population live below the poverty line (International Monetary Fund 1997). The government indicated its intent to bring inflation down further whilst the Staff cautioned against the continued use of exchange rate and monetary policies to achieve this objective. They also cautioned that the methodology being used to control the financial sector problems could result in moral hazard and become a high burden on the fiscal authorities. Given the pressures

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

209

emanating from the financial sector, there was doubt that the monetary stance could be maintained despite its effectiveness at controlling inflation. The deleterious effects of the tight monetary policy began to take a negative toll on the economy in 1997 through high interest rates, increased fiscal deficits, real increases in public sector wages, a return to current account deficits and negative economic growth (International Monetary Fund 1998b). Staff were of the view that the policy being pursued was unsustainable and required the authorities to allow the exchange rate to adjust, consider implementing efforts on either side of the budget. There was a clear disagreement between the IMF and the government on the trajectory of the current account deficit with projections of 7% and less than 5%, respectively (International Monetary Fund 1998b). Despite this, the efforts of the government at controlling inflation continued to be successful using a tight monetary stance. Slippages were expected on the fiscal side due to the likelihood that they would be larger than the government’s target of 6%. The realization and cost of the financial sector crisis in domestically owned financial institutions and the government’s notable handling of the resolution of the problems was acknowledged, as was the counter-­ intuitiveness of the reducing interest rates given that credit to the private sector was likely to increase based on the demand from the public sector. The avoidance of a total collapse of depositor confidence vis-à-vis the high cost of the resolution was contrasted by the IMF Staff; however, medium-­ term viability required short-term interventions alongside structural reform, as there was likely to be problems with competitiveness.

Conclusion Crises and the fluctuation in primary commodity prices globally contributed to the accrual of debt by many Caribbean countries, between the 1970s and the 1990s. This situation exacerbated the existing colonial driven, economic dependency of Caribbean states that had remained oriented around a primary product or one-crop specialization, making use of their ‘comparative advantage’, in relation to the ‘mother’ country (Frank 1967). The absence of economic de-colonization with the political created the vulnerability of economic dependence upon the income of one product. The persistence of these conditions in post-independent Caribbean states prompted Farrell (1983) to posit:

210 

C. CLARKE AND C. NELSON

The reality is that the English-speaking Caribbean remains essentially colonized. What has changed is the form of the colonization, the mechanisms through which it operates, and the colonizing agents. This is not to say that no change has taken place. Change has in fact taken place and more change will follow.

Jamaica also faced the challenge of weak infrastructure for enforcement. The ‘social basis’ of competition suggests a new set of policy challenges for developing countries as they are forced to reformulate the very social models upon which their economies are based (Campbell 1991). Another element of the experience of the 1990s is the management of currency liquidity and a financial sector crisis which created an enormous debt burden that would haunt the country until 2010. The country had implemented wholesale liberalization of the financial sector which, unmatched by adequately bolstered supervisory regime. Interest rates escalated rapidly overnight and businesses were unable to repay in addition to which some financial institutions were illiquid and on the verge of suffering bank runs. The resolution regime was for the government to provide the emergent financial institutions with clean balance sheets to make them going concerns. The literature indicates some evidence on the importance of reform channel is provided by Detragiache and Demirguc-­ Kunt (1998) and Kaminsky and Reinhart (1999), who find that financial liberalization is a determinant and a predictor of future banking crises. A more nuanced picture is provided by Shehzad and De Haan (2009), who find that most dimensions of financial reforms that enhance liberalization reduce the probability of systemic banking crises strictly conditional on adequate banking supervision. In many ways, the financial sector mirrors those of the other sectors of the economy in terms of ownership and operations. The financial institutions went from financial repression which had very negative impacts on the savings rates which declined from 0.8% in 1989 to −11.8% to financial liberalization (Kirkpatrick and Tennant 2002). Pre and immediately post-­ independence, financial institutions were largely comprised of foreign owned entities which were nationalized in the 1970s as part of the government’s policy to regain the commanding heights of the economy. As the economic base on which this policy rested collapsed and the government of the day with it, the new leadership had to switch gears and privatize many institutions quite quickly in order to rescue the fiscal accounts and instigate more dynamism and appropriate management and other tools

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

211

into these institutions. This effort in the context of the financial sector resulted largely in increased domestic ownership as there seemed to be very little investor interests in the financial sector (World Bank 2004) as there was in, for example, manufacturing or agriculture. This may, in hindsight, be viewed as being consistent with the intent of the 1970s regarding the commanding heights of the economy—but it was characterized by a fatal flaw—inadequate acknowledgement of risk in both the management and regulation of the risks that emerged through this deep deregulation and liberalization. These occurrences were partly due to the desires of the returned, ‘new’ Michael Manley to demonstrate that he had learnt from the challenges of the past and was now able to manage the economy without the foreign exchange challenges of the 1970s. In addition, he may have been particularly sensitive and overindulgent to local private sector interests that had been marginalized under his previous administration but who had supported his return to office. Leaders in the private sector reportedly made representation to Manley in support of the abolition of the controls of foreign exchange (Seaga 2018). The resultant shock to the system was immediate, deleterious and long-­ lasting. Seaga (2018) indicates that his administration had forecast a return to positive reserves in 1993 at which point they could have considered the implementation of the liberalization policies when the system could have accommodated the policy implications. The impact of the combination of the liberalized exchange rate, the deregulation of exchange rate controls and the resultant slippage of the exchange rate, the implied increase in prices of goods and the higher interest rates on loans available to the private sector combined to have deleterious impacts on the economy. Despite the significant costs of the financial crisis on individual entrepreneurs whose loans were not accommodated under the FINSAC regime, the country has learnt several important though painful lessons from the crisis. As outlined by Bonnick (1998), there ought to be appropriately high barriers to entry to screen out potentially poor quality institutions from the financial system and for those who are granted entry, regulators should be able to probe: off-balance sheet items, leverage positions and the quality, risk profile, management and allocation of each entity’s investment portfolio. The regulatory regime should ensure that weak institutions exit the system before it nears insolvency. The guiding principle was the need to ensure that the government did not present itself with a larger crisis needing resolution in the future due to any actions it took that could

212 

C. CLARKE AND C. NELSON

generate moral hazard from both borrowers and institutions. The need for integrated supervision of all financial institutions was highlighted as a means to reduce asymmetric information and the ability of regulated entities to arbitrage regulatory gaps by levelling the playing field for all types of institutions in the sector (International Monetary Fund 2002). Blanket guarantees to protect depositors have proven to be very effective means of controlling population and investor responses, preventing panic and runs on institutions despite the potential for inciting moral hazard among market participants (Laeven and Valencia 2008; International Monetary Fund 2002) which seems to have been countered by the non-provision for compensation of bad loans. At the end of the crisis, the Jamaican financial system looked very different in terms of the number of firms, structure of the system and scope of entities remaining. Six commercial banks, thirteen merchant banks, five building societies, seven insurance companies and sixty-six credit unions remained according to the World Bank (2003) Country Economic Memorandum with commercial banks. An unfortunate consequence of the financial sector crisis of the 1990s is that Jamaica was unable to participate in the economic growth that characterized the global economy which continued through to the 2000s (Clarke 2011). Agriculture and manufacturing declined over the course of a decade as many firms in these and other sectors in the real economy were on the other side of the non-performing loans that were not compensated for (Ministry of Finance 1998b). As a result, jobs were lost, domestic demand for goods contracted, exports could not be sustained and some foreign companies found it more attractive to relocate to other Caribbean territories. A large component of the public sector was involved directly and indirectly in addressing the crisis and its resolution whilst trying, where possible to hold the line on other areas of government policy such as education, violent crime and poverty. The effects of this period would continue to be felt well into 2020 as the population has since had to process two debt exchanges and three more IMF agreements with frontloaded conditionalities in order to arrive at a point where debt is now below 100% of GDP. As the relationship between Jamaica and the IMF had changed significantly during this decade—going from a borrowing to non-borrowing relationship but still participating in Article IV Consultations —the country found itself being economically independent but requiring all the technical assistance and advice it could get not only from the Fund, but the

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

213

World Bank and the IDB. Financial system stability would rise to prominence globally a decade after the establishment of FINSAC as related party transactions backed by artificial assets brought down age-old American and global financial institutions and sent many countries such as Greece, Iceland and Ireland into economic crisis. Indeed, this resolution path insured the Jamaican financial sector and by extension the economy from the ravages of the global economic and financial crisis towards the end of the 2000s. On the other hand, there were institutions that benefitted from the resolution of the financial sector crisis (Tennant 2006). These institutions were either not impacted by the crisis or were recipients of deposits emanating from the windup of the impacted entities. Credit unions by their nature had levels of governance in place that ensured decisions were robustly analysed and assessed. In addition, they benefitted from the oversight of their umbrella group that sought to ensure that its members adhered to international best practices in their operations. In the end, the resolve to generate economic growth was stymied. The PNP government was unable, yet again, to provide a stable economic basis in which firms could flourish and individuals could chart a sustainable financial plan. Nevertheless, the internal party machinery was able to achieve four consecutive electoral wins at the national level for a total of eighteen years spanning 1989–2007. This chapter has provided insight into how the government managed the crisis and brought the financial sector back to prudent management, supervision and legislation. Chapter 8 will detail how it managed the competing demands from public sector and other groups as it navigated the economic impact of the post-crisis period given the high system-wide interest rates in the context of very high public-debt-to-­ GDP ratio, which doubled in response to the adopted crisis resolution path (International Monetary Fund 2002).

Bibliography Acosta, A.  M., & Alleyne, D. (2006). The policymaking process in Jamaica. Washington, DC: Inter-American Development Bank. Alexander, R., & Parker, E. J. (2004). A history of organized labour in the English-­ speaking West Indies. Westport: Praeger. Bernal, R. (1984). The IMF and class struggle in Jamaica, 1977–80. Latin American Perspectives, 11, 53–82.

214 

C. CLARKE AND C. NELSON

Bonnick, G. (1998). Storm in a teacup: Crisis in Jamaica’s financial sector. Nassau: The Adlith Brown Memorial Lecture delivered at The Thirtieth Annual Conference of the Caribbean Centre for Monetary Studies held in Nassau, Bahamas. Buddan, R. (2006, April 2). A Statesman Departs. The Jamaica Gleaner. Campbell, D. (1991). Globalisation and strategic choices in tripartite perspective: An agenda for research and policy issues. Geneva: International Institute for Labour Studies DP/46/1991 (ILO). Clarke, C. (2011, May 22). The Tragic Folly of FINSAC. The Jamaica Gleaner. Cowell, N. (2006). Industrial relations theory and practice with reference to Jamaica. In Industrial relations in the Caribbean: Issues and perspectives. Port of Spain: ILO Caribbean Office. Dean, J.  W. (1998). Can financial liberalization come too soon? Jamaica in the 1990s. Social and Economic Studies, 47, 47–59. Department for International Development (DfID). (2001). Jamaica country strategy paper. London: Department for International Development. Detragiache, M., & Demirguc-Kunt, A. (1998). Financial liberalization and financial fragility. Washington, DC: International Monetary Fund. Farrell, T. (1983). Decolonization in the English-speaking Caribbean: Myth or reality? In The newer Caribbean (pp.  3–12). Philadelphia: Institute for the Study of Human Issues. Financial Sector Adjustment Company (FINSAC). (1999). Annual report. Kingston: FINSAC. Forrest, R. (1992, September 25). Decolonisation in reverse. The Jamaica Gleaner. Frank, G. (1967). Capitalism and underdevelopment in Latin America: Historical studies of Chile and Brazil. New York: Monthly Review Press. Goolsarran, S. J. (2003). Industrial relations in the Caribbean: Issues and perspectives. Port of Spain: ILO Caribbean Office. Goolsarran, S. J. (2005). Caribbean labour relations systems: An overview. Port of Spain: ILO Caribbean Office. International Monetary Fund. (1993). Staff report for the 1993 Article IV consultation and first review under the Extended Arrangement. Washington, DC: International Monetary Fund. International Monetary Fund. (1995). Staff report for the 1994 Article IV consultation and fourth review under the Extended Arrangement. Washington, DC: International Monetary Fund. International Monetary Fund. (1996). Staff report for the 1996 Article IV consultation. Washington, DC: International Monetary Fund. International Monetary Fund. (1997). Staff report for the 1997 Article IV consultation. Washington, DC: International Monetary Fund. International Monetary Fund. (1998a). Jamaica: Selected issues. Washington, DC: International Monetary Fund.

8  ECONOMIC POLICY INDEPENDENCE: JAMAICA’S INITIAL EXPERIENCE 

215

International Monetary Fund. (1998b). Staff report of 1998 Article IV consultation. Washington, DC: International Monetary Fund. International Monetary Fund. (2000). Jamaica: Selected issues. Washington, DC: International Monetary Fund. International Monetary Fund. (2002). Jamaica: Selected issues. Washington, DC: International Monetary Fund. Kaminsky, G. L., & Reinhart, C. M. (1999). The twin crises: The causes of banking and balance-of-payments problems. American Economic Review, 89, 473–500. Kirkpatrick, C., & Tennant, D. (2002). Responding to the financial crisis: The case of Jamaica. World Development, 30, 1933–1950. Laeven, L., & Valencia, F. (2008). The use of blanket guarantees in banking crises. Washington, DC: International Monetary Fund Working Paper 08/250. Manley, M. (1991). A voice at the workplace: Reflections on colonialism and the Jamaican worker. Washington, DC: Howard University Press. McBain, H. (1997). Factors influencing the growth of financial services in Jamaica. Social and Economic Studies, 46, 131–167. Mckoy, D. (1992, September 25). Jamaica will not revoke membership with the IMF. The Jamaica Gleaner. Ministry of Finance. (1998a). Public sector response to the problems of the financial sector (Ministry paper 13/98). Kingston: Ministry of Finance. Ministry of Finance. (1998b). Ministry paper No. 39/98 FINSAC.  Kingston: Ministry of Finance. Munroe, T. (2000). Voice participation and governance in a changing environment: The case of Jamaica. Washington, DC: The World Bank Caribbean Group for Cooperation and Economic Development (CGCED). Munroe, T. (2002). Partnership building: Reflections on the Michael Manley accord in the bauxite/alumina industry. Caribbean Quarterly, 48, 94–97. Naranjo, M., & Osabela, E. (2003). Jamaica financial system diagnostic and recommendation. Washington, DC: Inter-American Development Bank. Nelson, C. (2019). Social partnership and governance under crisis. Hershey: IGI Global. Payne, A. (1992). The “new” Manley and the new political economy of Jamaica. Third World Quarterly, 13, 463–474. Peart, K. (1995). Financial reform and financial sector development in Jamaica. Social and Economic Studies, 44, 1–22. Perkins, A. K., Shirley, B., & Wint, A. G. (2008). Political leadership and development: Assessing the Jamaican experience. Social and Economic Studies, 57, 108–138. Seaga, E. P. G. (2018, July 29). How the financial crash of the 1990s happened and why. The Jamaica Gleaner.

216 

C. CLARKE AND C. NELSON

Shehzad, C.  T. T., & De Haan, J. (2009). Financial reform and banking crises [Online]. Available at: https://econpapers.repec.org/paper/ cesceswps/_5f2870.htm Stennett, R.  R., Batchelor, P.  M., & Foga, C.  S. (1998). Stabilization and the Jamaican financial sector 1991–1997. Kingston: Bank of Jamaica Working Paper. Stephens, E.  H., & Stephens, J.  D. (1986). The political movement and social transformation in dependent capitalism. London: Macmillan. Taylor, O.  W. (2001). The employment relationship (scope) national study. Kingston: s.n. Tennant, D. (2006). Lessons learnt by the survivors of Jamaica’s financial sector crisis. Savings and Development, 30, 5–22. Unnamed. (1992, September 23). IMF public relations policies. The Jamaica Gleaner. World Bank. (2003). Jamaica: The road to sustained growth (CEM). Washington, DC: World Bank. World Bank. (2004). The road to sustained growth in Jamaica. Washington, DC: The International Bank for Reconstruction and Development. Xyminies, M. (1993, August 24). Jamaica and the IMF. The Jamaica Gleaner.

CHAPTER 9

The Local Approach ‘Under the Microscope’: International Monetary Fund Article IV Reviews

Introduction The principal problems facing the Jamaican economy were the extraordinarily heavy burden of public sector debt reflecting in part the costs of the 1995–1996 financial crisis and the legacy of periods of high inflation. Jamaica embarked on an economic programme aimed at reversing adverse debt dynamics and laying the foundation for economic growth in the medium term. In July 2000, Jamaica requested a Staff-Monitored Programme (SMP) for the period from April 2000 through March 2002–2003 as a signal to official creditors, donors and financial markets and the SMP was broadly on track. The statistical base in Jamaica is generally considered adequate for conducting surveillance and monitoring economic developments under the SMP, but there were several areas where improvements were needed. Regarding advances, Jamaica made substantial progress towards macroeconomic stability in recent years, through fiscal consolidation, tight monetary policies and financial sector reforms. While inflation has fallen, high real interest rates have resulted in stagnation and continued high unemployment. After four years of stagnation/decline, signs were evident of economic recovery in 2000–2001. Inflation declined to around 6% in line with the SMP targets, though wages appeared to be growing at a faster rate. The overall public sector deficit was substantially reduced—by 6 percentage points of GDP—over © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_9

217

218 

C. CLARKE AND C. NELSON

1999–2000 and 2000–2001. Public sector debt stabilized at around 137% of GDP in 2000–2001. Monetary policy remained tight in 1999–2000 and 2000–2001. Jamaica had made progress in restructuring the financial sector and in strengthening prudential supervision over the last two years and the corresponding SMP benchmarks were all met. In terms of decline, the real effective exchange rate (REER)—based on relative Consumer Price Indexes (CPIs)—depreciated by about 4% in 1999–2000 and by about 2% so far in 2000–2001 (between April 2000 and February 2001) following a large (46%) cumulative appreciation over the previous four years. See Tables 9.1 and 9.2. The Staff commended the Jamaican authorities for the progress already made under the first year of the SMP and noted that their main challenge was to build on this progress in order to achieve sustained faster growth and improve the public debt. The more comfortable the international reserve and balance of payments positions were, the more room was permissible for manoeuvre both on raising funds in capital markets and on institutional arrangements in the foreign exchange market. On the fiscal front, and in order to reduce the very heavy burden of public debt, the mission urged Jamaica to pursue further fiscal consolidation in 2001–2002 and beyond—with a primary surplus close to 12% of GDP—through continued expenditure restraint and additional revenue-­ enhancing measures. The revised fiscal targets for 2001–2002 under the SMP placed the stock of debt on a moderate downward trajectory, aiming for a public sector debt reduction of around 10 percentage points of GDP within the fiscal year. However, the mission recommended that debt and liquidity management be strengthened. Jamaica pursued tight monetary policies to meet the objective of containing inflation to the targeted level of 5% in 2001–2002. In the Staff’s view, exchange rate flexibility would enhance competitiveness while not jeopardizing the inflation target. The policies under the SMP are expected to lay the foundations for faster growth and a further reduction in unemployment and in inflation. The fiscal measures in Jamaica’ programme, along with the faster growth and lower nominal interest rates, will bring a shift in the public sector balance from a deficit of 3.5% of GDP in 2001–2002 to a small surplus in 2004–2005. The medium-term scenario was subject to several possible downside risks. These included a less rapid decline in interest rates

Coming from the 1990s: 1995–1996 financial crisis marked period with high public sector debt and inflation Coming from 2000: Reduced inflation Restructuring of financial system Structural reforms Improved fiscal position

FY2001–2002

Source: Collated by Authors from Article IV Reviews

High public sector debt—137% of GDP Central government debt 5.7% of GDP High interest rates (16.9%) with low growth (1%) High unemployment—15.5% Murder rate increased by 90% from 1990–2001 Declining inflation—Moved to 6% from 8.5% at end 1999 Tight monetary policy Primary surplus of 11% Depreciation of real effective exchange rate—by 2.5% from 1999. JMD $43 in 2000 Rise in net international reserves—$700 million in the two-year period Restructuring of financial sector and strengthened prudential supervision.

Economic background Current economic environment at beginning of financial year

Date

Table 9.1  Summary of objectives outlined in FY2001 Article IV

Reduce public sector debt by 10 percentage points of GDP within fiscal year Restore growth—3% per year Maintain tight monetary policy— Inflation of 5% Increase net international reserves Central government deficit—3% of GDP Increase net international reserves (NIR)—by US$100 million Implement legislation to strengthen prudential supervision Increase primary surplus Continued structural reforms in the form of: Tight control over expenditure Financial sector reform: Divest remaining FINSAC core and non-core assets, implement and enforce new approved sector legislation

Objectives outlined in Article IV report

Build on progress from 2000 SMP to achieve faster sustained growth and improve public debt dynamics Expenditure restraint and revenue enhancing measures Strengthen debt and liquidity management Greater exchange rate flexibility Enhanced financial sector legislative framework to promote market discipline Deepened structural reform to enhance competitiveness

Policy recommendations from the IMF

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

219



Source: Collated by Authors from Article IV Reviews

Financial sector reform: Divest remaining FINSAC core and non-core assets, implement and enforce new approved sector legislation

Tight control over expenditure

Increase primary surplus Continued structural reform

Implement legislation to strengthen prudential ✓ supervision

Increase NIR $100 million











Maintain tight monetary policy: Inflation to 5% Central government deficit to 3% ✓





Public sector debt decreased by 3% points of GDP—the smaller decline reflected the higher fiscal deficit, additional debt from the deferred financing scheme, new domestic bonds with a government guarantee issued for the ‘Highway 2000’ project and the development bonds, and pre-funding in December 2001 Growth slowed due to impact of shocks. In response the government increased expenditure on security, tourism promotion, flood relief. Growth of 1% Inflation increased to 7.5% from 6% in 2001 due to external shocks Original central government target was 3% and thereby revised to 4.1%. In 2002, deficit was 5.7%. This due in part to lower than expected tax revenues reflected in weaker economic activity Boosted by proceeds of additional international bond issue and string inflows of remittances (remittances increase by 17% to 12.5% of GDP in 2002) Prudential indicators have improved and are generally well above international minimum standards. The regulatory and supervisory framework, further strengthened through legislative amendments, commercial banks remain quite profitable due to high interest rate spreads and stable exchange rate. Successful establishment of the FSC and insurance act Primary surplus declined from 11% to 8% Sold JPS for US$ 200 million to a US company. Progress in public enterprise reform was limited, with most of the structural benchmarks envisaged under the SMP not fulfilled. These included steps to increase the efficiency of the National Insurance Fund, the National Housing Trust and the National Water Commission Due to shocks, expenditures increased on security, tourism promotion, flood relief and rehabilitation, earlier than expected wage settlements and interest payments from sale of major commercial bank but was slightly below FY2001–2002 FINSAC divested all of its assets except the holdings of commercial properties

Achieved Somewhat Failed Description achieved

Growth of 3%

2001–2002 Reduce public sector debt by of 10% points

Date (by Objectives outlined in SMP end of FY)

Table 9.2  Summary of objectives achieved in FY2001

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

221

and slower than expected growth. The Staff stressed the need for deepened structural reforms to enhance competitiveness. Jamaica did not see further unilateral trade liberalization as a priority and has recently proposed additional import duties on certain agricultural products. Jamaica saw reducing barriers to intra-regional trade through implementing agreed common tariff reductions as the priority for regional integration. The principal problems facing the Jamaican economy are the extremely heavy burden of public sector debt, low growth and the legacy of earlier periods of high inflation. The Jamaican authorities were to be commended for the success they have achieved in implementing their economic programme, which is being monitored by the Fund Staff. However, despite these strong efforts, the public-sector-debt-to-GDP ratio has only been stabilized—at slightly below 140%—rather than reduced significantly as projected under the SMP. Looking ahead, a continued high primary surplus—which will require restraint in public sector wage settlements and moderation in increasing capital spending—coupled with strict limits on the assumption of additional liabilities by the government, is essential to ensure a downward path for the stock of debt in relation to GDP. Exchange rate stability has succeeded in lowering domestic inflation. Jamaica have made good progress in putting in place the legislative framework to strengthen prudential supervision of both banks and other financial institutions to limit the risks of any further financial crisis. The Staff shared Jamaica’s aim to reverse the recent rise in rural poverty but questions whether this is most effectively achieved by the proposed large rise in import duties on certain agricultural products. The Staff stressed the need for deepened structural reforms to enhance competitiveness.

2002 The Bank of Jamaica (BOJ) has achieved its primary objective of single-­ digit inflation in FY2001–2002 through targeting base money and maintaining a broadly stable exchange rate. The soundness of the banking system has continued to improve and prudential indicators are generally well above international minimum standards.

222 

C. CLARKE AND C. NELSON

In terms of decline, growth slowed in the second half of FY2001–2002 due to the impact of the shocks, and for the fiscal year, growth was estimated at about l%. Public finances significantly worsened in 2001–2002 and the envisaged reduction in public debt only partially materialized. The public sector debt declined by a modest 3 percentage points of GDP. The Staff commended the Jamaican authorities for low inflation and positive real growth despite adverse shocks but noted that the fiscal position in FY2001–2002 was much worse than had been projected in November 2001. Noting the still difficult macroeconomic environment, a very high public sector debt and considerable structural impediments to growth, the Staff pointed to the importance of maintaining a persistently strong fiscal effort over medium term and a viable strategy to increase Jamaica’s growth potential. Understandings were reached on the new SMP for FY2002–2003 which aims to reverse the fiscal slippages in FY2001–2002, to maintain macroeconomic stability and to promote structural reforms that would lay the foundations for accelerating economic growth. On the fiscal, the Staff commended the Jamaican authorities for low inflation and positive real growth despite adverse shocks, but noted that the fiscal position in FY2001–2002 was much worse than had been projected in November 2001. Noting the still difficult macroeconomic environment, a very high public sector debt and considerable structural impediments to growth, the Staff pointed to the importance of maintaining a persistently strong fiscal effort over the medium term and a viable strategy to increase Jamaica’s growth potential. See Tables 9.3 and 9.4. Understandings were reached on the new SMP for FY2002–2003 which aims to reverse the fiscal slippages in FY2001–2002, to maintain macroeconomic stability and to promote structural reforms that would lay the foundations for accelerating economic growth. Real GDP growth in FY2002–2003 is projected to accelerate from the shock-affected levels of FY2001–2002, led by a recovery in agriculture, tourism and mining. A key short-term priority was to reinforce the fiscal effort and to achieve a further reduction in the onerous public sector debt burden. The policies in the SMP are expected to help lay the foundations for the medium-term achievement of higher growth, more employment and moderate inflation. Growth is expected to accelerate to 3–4% a year on average by 2005. The public sector debt is projected to decline to 125.5% of GDP by the end of FY2002–2003, a reduction of 3.5 percentage points of GDP.

Economic background

Economy hit by severe shocks by end 2001: September 11 terrorist attacks in the US Outbreaks of violence Flooding in November 2001: Damage to agricultural crops and infrastructure General elections held in October 2002 with the PNP emerging victorious for fourth consecutive term Minister of finance: Dr Omar Davies

Date

FY2002–2003 Discussion held June 7, 2002 Negative shocks slowed growth Experienced May– June floods Inflation increased to 7.5% REER appreciated by 4% NIR increased to US$ 1.9 billion Current account deficit widened by 3% points—Close to 8.5% of GDP Central government deficit 5.7% of GDP Decline in primary surplus to 8% from 11% Public sector debt at 130% Unemployment at 15%

Current economic environment at beginning of financial year Reverse fiscal slippages from 2001 while maintaining macroeconomic stability and laying foundation for faster growth of 2.5% Implementation of debt management strategy Maintain stable exchange rate Maintain single-digit inflation Improve soundness of banking system Improve structural reforms Central government deficit target of 4.4% of GDP Reduce public sector debt to 125.5% of GDP Primary surplus of 10.4%

Objectives outlined in Article IV report

Table 9.3  Summary of objectives outlined in FY2002 Article IV

Debt strategy to: Maintain a prudent debt structure, further diversify the debt portfolio, increase reliance on market determined instruments for domestic debt issuance, promote and build a liquid and efficient market for government securities, increase the transparency and predictability of primary market debt issuance. Budget of $210 billion—half of which will be financed through taxes Special focus on financing areas of growth and employment and national security

Additional objectives outlined in Budget

(continued)

More ambitious fiscal effort to underpin lower real interest rates and faster growth Allow a more flexible exchange rate policy to boost competitiveness of the economy Strengthen BOJ balance sheet to limit losses Government’s growth plans should be complimented by more ambitious structural reforms of labour market and public sector Provide support and resources to STATIN

Policy recommendations from the IMF

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

223

Economic background Objectives outlined in Article IV report

Increase revenues Slightly reduced expenditures—Increase in interest expenditures to be offset by lower wage and salary pay-outs Labour market reforms to assist to facilitate job searching and training Data improvement plans—Participate in general data dissemination system (GDDS) Simplification of tax system in medium term

Current economic environment at beginning of financial year Minimum wage increased by 125% in past two years Government signed an anti—crime plan

Source: Collated by authors from Article IV Reviews

Date

Table 9.3  (continued) Additional objectives outlined in Budget

Policy recommendations from the IMF

224  C. CLARKE AND C. NELSON

Objectives outlined in SMP

Maintain single-digit inflation Improve soundness of banking system

Implementation of debt management strategy Maintain stable exchange rate

2002–2003 Reverse fiscal slippages from 2001 while maintaining macroeconomic stability and laying foundation for faster growth of 2.5%

Date





Achieved

Somewhat achieved







(continued)

The financial system remained strong with prudential indicators for the commercial banking sector well above the minimum international standards. The BOJ continued to work towards enhancing the functioning of the financial system through further strengthen prudential supervision and took steps to improve its capacity to supervise financial groups. Further institutional strengthening measures were undertaken by BOJ including building its capacity to assess market risks and improving its balance sheet by implementing a World Bank-sponsored re-capitalization plan which reduced the proportion of below market-remunerated assets in its portfolio

Public sector debt rose to nearly 150% of GDP-pushed up by the depreciating exchange rate. Growth was 1.5%. Domestic interest rates doubled. The current account deficit widened by 3 percentage points of GDP to 12% of GDP (roughly US$900 /million) in FY2002–2003 (Table 9.3). Weaker exports earnings, higher levels of external debt servicing and sharply higher import costs, reflecting in particular higher oil prices, were only partially offset by a further rapid growth in remittance. NIR fell by nearly one-third A paper describing the debt management strategy was tabled, but nothing had yet been implemented Exchange rate depreciated by 27% against the US dollar from November 2002 through mid-May 2003 due to deteriorating credibility Inflation fell to 6%

Failed Description

Table 9.4  Summary of objectives achieved in FY2002 Article IV 9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

225

Improve structural reforms Central government deficit target of 4.4% of GDP Reduce public sector debt to 125.5% of GDP Primary surplus of 10.4% Increase revenues Slightly reduced expenditures—Increase in interest expenditures to be offset by lower wage and salary pay-outs Labour market reforms to assist to facilitate job searching and training Data improvement plans— participate in general data dissemination system (GDDS) Simplification of tax system in medium term Simplification of tax system in medium term

Objectives outlined in SMP





Achieved

Source: Collated by authors from Article IV Reviews

Date

Table 9.4  (continued) Somewhat achieved

Proposed tax measures were not implemented Proposed tax measures were not implemented



The labour market information system to facilitate searching and training were not launched until February 2003. Still within the timeline of FY2002–2003 Participated in GDDS as of January 2003. Still within timeline of FY2002–2003

Public sector debt rose to nearly 150% of GDP-pushed up by the depreciating exchange rate Primary surplus reduced to 7.5% of GDP Lower revenues due to sluggish economy Public finances were much weaker than expected due to expenditure overruns in wages and non-wage recurrent expenditures, as well as higher interest spending.

Little progress was made on structural reforms. Central government deficit increased to 8% of GDP



✓ ✓ ✓



✓ ✓

Failed Description

226  C. CLARKE AND C. NELSON

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

227

The medium-term scenario was subject to several possible downside risks. The Jamaican economy is very vulnerable to natural disasters and an adverse international environment. There were significant weaknesses in the national accounts and other real sector data. National accounts in constant prices use an outdated base year. Outdated weights also are used in the computation of the published Consumer Price Index (CPI)—reflecting the household expenditure survey for 1984 and a base of January 1988. No data on the industrial production indices have been reported for publication in the International Financial Statistics (IFS) since 1990. The latest year for which data is available in the Government Financial Statistics (GFS) is 1985, and no fiscal data have been reported for publication in IFS. In the past fiscal year, the Jamaican economy has achieved economic growth despite major negative shocks. In this respect, it has performed better than many of its Caribbean neighbours which are also heavily dependent on tourism. However, the sizeable deterioration in public finances and the slow progress in the reduction of public sector debt burden was very worrisome. The key short-term priority is to reverse the fiscal slippages and continue the strong fiscal effort necessary to escape the debt trap. Achieving sustained higher economic growth is the overarching goal. Jamaica should build on their anti-crime measures and sector-specific policies with flexibility in the exchange rate. There remain significant downside risks to achieving Jamaica’ policy objectives in FY2002–2003. Achieving higher growth and a lower public debt burden over the medium term would depend on mutually reinforcing fiscal consolidation and structural reforms. The BOJ deserved considerable credit for its implementation of monetary policy. On trade issues, the Staff welcomed the switch from reference to actual prices. Jamaica provides adequate and timely economic statistics for surveillance purpose.

2003 At the 2002 Article IV Board discussion, Directors saw the key policy priorities as reversing fiscal slippages and setting a firmer foundation for medium-term growth. In the event, the FY2002–2003 SMP did not achieve its goals. The SMP was designed to strengthen the fiscal position. Increased macroeconomic imbalances in FY2002–2003 reflect in considerable part the lack of progress in implementing the policies

228 

C. CLARKE AND C. NELSON

recommended by the Board in the last Article IV discussion. A general election was held in October 2002. Jamaica’s foreign exchange arrangements are classified by the IMF as a managed float with no pre-announced path for the exchange rate (Table 9.5). Public finances were much weaker than expected due to expenditure overruns in wages and non-wage recurrent expenditures, as well as higher interest spending. The public-debt-to-GDP ratio is estimated to have increased further in FY2002–2003. The current account deficit widened by 3 percentage points of GDP to 12% of GDP (roughly US$900 million) in FY2002–2003. Steps were taken to strengthen prudential supervision and the balance sheet of the BOJ.  However, there were declines and growth was disappointing during FY2002–2003, although there was some pick up during the second half of the year (Table 9.6). In the second half of FY2002–2003, domestic interest rates more than doubled as the BOJ tried to stabilize the exchange market. There was a major deterioration in the capital account for the fiscal year 2002–2003 and the NIR fell by nearly one third. The intermediation activities of securities market dealers potentially increase the vulnerabilities of the financial system. With extremely high and rising debt levels, persistent low real growth and rising current account deficits, the Jamaican economy is fast approaching a debt trap. Sustainability hinges critically on the early adoption of coherent and credible policies to restore macrostability by fiscal adjustment, strengthen competitiveness and accelerate structural reforms to promote higher and sustained growth. Jamaica recognize the seriousness of the economic situation and have proposed a policy package intended to restore macroeconomic stability. The package combines strong upfront fiscal adjustment which will need to persevere into the medium term, with some growth-oriented structural reforms. Staff considered that the Jamaican economy has, on balance, lost competitiveness over recent years. Regarding the fiscal Jamaica proposed a budget to achieve a central government deficit target of 5–6% of GDP for FY2003–2004, consistent with a primary surplus of over 12% of GDP and is committed to balance the budget by FY2005–2006. Jamaica has proposed a package of revenue enhancing measures to broaden the tax net and strengthen tax administration. Total expenditures are budgeted to be around 39% of GDP, about 2 percentage points higher than last year. Given the heightened market sensitivities, Jamaica acknowledged that financing the budget in FY2003–2004 at acceptable interest rates would be a challenge.

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

229

Table 9.5  Summary of objectives outlined in FY2003 Article IV Date

Economic background

FY2003– Coming from 2004 2002: Key policy priorities were reversing fiscal slippages and setting a firmer foundation for medium-term growth SMP targets were missed by wide margins Minister of finance: Dr Omar Davies

Current economic environment at beginning of financial year

Objectives outlined in Article IV report

Policy recommendations from the IMF

Exchange rate depreciation 18% against $US Growth of 1.5% Inflation at 6% Central government deficit at 8% of GDP Primary surplus 7.5% of GDP Public sector debt at 150% of GDP Current account deficit 12% of GDP Net international reserves at US $370 million Domestic interest rates at 16.5% Strengthened prudential supervision and BOJ balance sheet

Deepen foreign exchange market: Introduce electronic trading and abolish 5% surrender requirement where permitted Target growth at 2.7% from recover in tourism, agriculture and growth in bauxite Reduce the debt-to-GDP ratio and reduce fiscal deficit Primary surplus target 12% Revenue enhancing measures through broadened tax net and strengthened tax administration Keep total expenditure at 39.5% of GDP Restructure large loss making public entities such as NHT, NWC, JUTC, etc. Strengthen regulatory framework of financial system

Greater public sector transparency and accountability to achieve proposed targets More flexible money market interventions focusing on shorterterm interest rates— 30 days or less particularly as the fiscal position improves. Revise of the organizational structure of STATIN to strengthen its management and streamline its functions Pursue a more ambitious agenda for structural reforms Fiscal retrenchment should be complemented by a more comprehensive approach to structural reforms to generate faster growth Adopt a more flexible exchange rate policy aimed at rebuilding competitiveness Planned strengthening of the supervision of non-bank financial institutions, particularly securities brokerdealers, is welcome

Source: Collated by authors from Article IV Reviews

Objectives outlined in SMP ✓



Source: Collated by authors from Article IV Reviews

Restructure large loss-making public entities such as NHT, NWC, JUTC, etc. Strengthen regulatory ✓ framework of financial system

Keep total expenditure at 39.5% of GDP

Revenue enhancing measures ✓ through broadened tax net and strengthened tax administration







On-going work continued with the Financial Services Commission being at an advanced stage of preparation of prudential requirements for securities dealers

Primary surplus almost reach target, achieving 11% of GDP—a 4% point increase from 2002 Revenue increased by about 2 percentage points of GDP, to 30% of GDP, reflecting higher receipts from the general consumption tax, personal income tax and taxes on interest as a result of measures introduced in the FY2003–2004 budget, as well as the imposition of an import surcharge. Reorganized the revenue administration department along functional lines has improved audit and assessment functions, in combination with the development of an integrated tax administration computer system Primary expenditure declined by 2 percentage points, to 19% of GDP, as cuts in nonwage current spending and capital outlays were implemented NWC recorded losses. No other evidence of restructuring

The foreign exchange rate market stabilized in mid—2003. The current level of the exchange rate appropriately reflects market forces. Remained around US$60 Real GDP growth reach 2.2% amid looming crisis. Led by strong performance in tourism, mining, agriculture, communication, utilities and the financial sector. The debt-to-GDP ratio reduced to 145% of GDP and fiscal deficit was reduced to 5.8% of GDP meeting the target of 5–6%

Achieved Somewhat Failed Description achieved

Target growth at 2.7% from recover in tourism, agriculture and growth in bauxite Reduce the debt-to-GDP ratio ✓ and reduce fiscal deficit by 5–6% Primary surplus target 12%

2003– Deepen and stabilize foreign 2004 exchange market

Date

Table 9.6  Summary of objectives achieved in FY2003 Article IV 230  C. CLARKE AND C. NELSON

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

231

Jamaica planned to restructure large loss-making public entities. There was also considerable discussion of the appropriate role of exchange rate policy. Jamaica do not attribute the rapid expansion in the current account deficit—by 8 percentage points of GDP in two years—to a loss of competitiveness. Rather they attribute this to sharp adverse movements in the terms of trade-oil prices. Jamaica planned reforms to deepen the foreign exchange market. There was considerable discussion of Staff proposals to change the operation of monetary policy. Jamaica plan further strengthening of the regulatory framework of the financial system. Economic activity is projected to improve in FY2003–2004. Jamaica project real growth of around 2.7%, as a result of recovery in tourism (given strong arrivals during the winter season), continued growth in bauxite production and a rebound in agricultural production after the floods in 2002. The medium-term outlook would improve markedly under the adjustment policy scenario which assumes the fiscal adjustment underlying the FY2003–2004 budget. The debt sustainability analysis based on the Staff’s baseline scenario underscores the fragility of the Jamaican economy. The Jamaican economy remains very susceptible to potential shortterm difficulties. The economy is very vulnerable as a result of (i) high overall public sector debt levels; (ii) the susceptibility of foreign exchange earnings and growth to external shocks, weather-related events, notably flooding, and domestic violence; (iii) high real interest rates. Jamaica provides core statistics to the Fund and, since January 2003, participates in the GDDS. At present Jamaica does not collect International Investment Position (IIP) data. The Staff encouraged urgent action on pending labour market reforms. Jamaica’s trade regime is rated 4 out of 10 on the Fund’s trade restrictiveness index. Macroeconomic imbalances intensified in FY2002–2003 to levels which threatens stability. Jamaica’ recognition of the need for strong fiscal adjustment, was reflected in the FY2003–2004 budget and their commitment to achieve fiscal balance by FY2005–2006, was welcomed. The coherence of the current economic strategy hinges on determined implementation of the measures in the FY2003–2004 budget. Fiscal retrenchment should be complemented by a more comprehensive approach to structural reforms to generate faster growth. There remains scope for a more flexible exchange rate policy aimed at rebuilding competitiveness. The operation of monetary policy could be enhanced by a greater focus on domestic inflation and on shorter-term interest rates. The planned

232 

C. CLARKE AND C. NELSON

strengthening of the supervision of non-bank financial institutions, particularly securities broker-dealers, is welcomed. However, the sustainability of the current situation is in doubt even with the determined implementation of the strongest policies. For 2004 it was reiterated that Jamaica has a history of high public indebtedness, with large swings in the public-debt-to-GDP ratio. Jamaica’s growth performance has been generally poor. Fiscal slippages and a worsening external current account position led to acute pressures in the foreign exchange market in FY2002–2003 and early FY2003–2004. Fund surveillance has focused on the need for policies to contain Jamaica’s large public debt burden and to achieve sustained higher growth over the medium term. Following the near crisis in the first half of 2003, Jamaica succeeded over the past year in stabilizing the economy and restoring market confidence. The foreign exchange market stabilized in mid-2003, inflation had decelerated. After more than a decade of virtual stagnation, real GDP growth reached 2% in FY2003–2004. In FY2003–2004, the government contained the budget deficit in relation to GDP slightly below the preceding year’s outturn, despite a much higher interest bill. Monetary policy has continued to rely on open market operations guided by inflation and NIR objectives. The external current account deficit narrowed by 4 percentage points of GDP to 11% of GDP in FY2003–2004. The exchange rate of the Jamaican dollar has continued to be determined in an interbank market that is free of restrictions on current payments and in the context of an open capital account. The real effective exchange rate has risen somewhat following the steep depreciation in late 2002/early 2003. In the context of Jamaica’s’ request for intensified surveillance, the discussions centred on their strategy for bringing down the public-debt-toGDP ratio, the major vulnerability to Jamaica’s economy. While supporting Jamaica’ fiscal consolidation efforts, the mission underscored the need for structural reforms to mitigate implementation risks and reduce vulnerability to shocks, as well as to promote higher growth. Jamaica’ fiscal strategy calls for balancing the budget by FY2005–2006 and maintaining small overall surpluses thereafter in order to bring about a sustained reduction in the debt-to-GDP ratio. The targeted reduction in the budget deficit in FY2004–2005 would be achieved mostly through an increase in the primary surplus. The

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

233

mission expressed the view that the fiscal targets for FY2004–2005 appear ambitious, but achievable with a determined policy effort. More fundamentally, the mission underscored that it would be unprecedented for a country to sustain, for a protracted period, the stringent fiscal discipline envisaged by Jamaica. Effective public expenditure allocation is constrained by the size of the wage and interest bills, which, together, represent over 80% of budgetary expenditure. On monetary issues, the Bank of Jamaica (BOJ) indicated that it will continue to rely on open market operations to target a base money growth compatible with its inflation and balance of payments objectives. Jamaica’ NIR target is consistent with a projected widening in the external current account deficit in FY2004–2005. The mission supported Jamaica’ inflation and NIR objectives and recommended a flexible and balanced use of monetary and exchange policies. Jamaica’ strategy, if fully and successfully implemented, would bring about a gradual reduction in the public-debt-to-GDP ratio and some further improvements in growth. Jamaica’ medium-term scenario is significantly more positive than developments in recent years, and therefore subject to substantial downside risks. Debt sustainability analysis highlights the major implementation risks and vulnerability to shocks associated with the medium-term scenario. Jamaica provides core statistics to the Fund that are broadly adequate for the conduct of surveillance and formally adopted the General Data Dissemination System (GDDS) in January 2003. The mission stressed the mutually reinforcing links between higher growth and achieving greater debt sustainability. Jamaica intended to strengthen the regulatory framework for the financial sector particularly, the prudential framework for securities dealers. The mission emphasized that reducing rigidities in the labour market will improve the business and investment environment and help job creation. While access to education in Jamaica is at levels comparable to higher income economies, the quality of secondary education is weak and inequalities persist. Jamaica suffers from a high crime rate, which affects living conditions and is detrimental to the business climate. Over the past year, the Jamaican authorities have achieved significant progress in stabilizing the economy and setting the stage for a reversal in the highly unfavourable debt dynamics. Having steered successfully through this difficult period, Jamaica are nonetheless still confronted with formidable challenges. It is understandable that Jamaica had placed a reduction in the public-debt-to-GDP ratio

234 

C. CLARKE AND C. NELSON

as their top policy priority. While the fiscal targets for FY2004–2005 appear achievable, Staff projections based on existing policies pointed to potential shortfalls in relation to the medium-term fiscal targets. It was reiterated that it would be unprecedented for Jamaica to sustain, for a protracted period, the stringent fiscal discipline envisaged and reform measures to underpin the planned adjustment will be critical. The Staff believed that the current level of the exchange rate appropriately reflects market forces, stressing the mutually reinforcing links between achieving greater debt sustainability and higher growth. The Staff welcomed Jamaica’ request for more intensive surveillance of the Jamaican economy and of progress in implementing their economic strategy. Economic policies in 2004 onwards were guided by medium-term socio-economic policy framework adopted by the government. The major objectives of these medium-term strategies involved reducing public debt from over 140% of GDP in FY2003–2004 to around 100% by FY2008–2009 and achieving a balanced budget. The government and the Fund both agreed that debt restructuring could potentially be disruptive and affect future borrowing ability but the Fund urged Jamaica to focus on structural reforms in the fiscal area to help mitigate the major implementation risks involved in targeting very high primary surpluses for an extended period. Economic targets were largely on track for the year 2004 when the economy was affected by a series of shocks. Real GDP contracted sharply in late 2004 following the devastating effects of Hurricane Ivan and the economy was further weakened by drought and a remarkably active and severe hurricane season in 2005. Agricultural prices soared and, with the pass-through of high international oil prices to the domestic economy, contributed to an upsurge of inflation, which peaked in September 2005 causing fiscal targets of 2004–2005 and 2005–2006 to be largely unmet. As a result, the country’s ambitious medium-term programme weathered a difficult period making the need for structural reform, policy corrections, improved revenue collection even more important at that time. A review of the 2004 and 2005 is summarized in Table 9.7. In 2005, Jamaica is one of the larger Caribbean economies, with income somewhat below the regional average. A salient feature of the economy during the past fifteen years has been the crushing public debt burden. Going forward, the room for policy manoeuvrability is very limited.

Economic background

Intensified surveillance: Jamaica have requested intensified surveillance of the medium—term economic strategy they have formulated, which has not been negotiated with fund staff. Municipal elections held in June 2003, the Opposition Jamaica Labour Party won control of twelve of fourteen municipal councils (it controlled none before).

Date

FY2004–2005 and FY2005–2006 June 4, 2004 Shocks continued to sap the economic recovery following hurricane Ivan in 2004 and a remarkably active 2005 hurricane season exacted a further toll Government contained the budget deficit in relation to GDP slightly below the preceding year’s outturn, despite a much higher interest bill MOU signed on wage restraint Reduced interest rates to 14–17% in June 2004

Primary surplus target of 13.8% Public-debt-toGDP ratio target of 136.5% Decline wage bill by 1.1 percentage points of GDP (to 11.3% of GDP) Reform tax system Advance reforms in the public expenditure management system over the medium term Pursue further regional integration and trade liberalization in the context of CARICOM, the FTAA and the WTO

Eliminate fiscal deficit during 2005–2006 FY Inflation of 9% GDP growth of 2.5% Achieve a primary surplus of the order of 12% and above, over a three-year period Inflation of 9% GDP growth of 2.5% NIR of (US)$1.3 billion by March 2005

Economic conditions Objectives outlined Objectives during 2004 and in Article IV outlined in 2005 report budget

Table 9.7  Summary of objectives outlined in 2004 and 2005 Article IV

(continued)

Structural reforms to mitigate implementation risks and reduce vulnerability to shocks, as well as to promote higher growth Fund stressed that a successful fiscal outturn would hinge on unwavering efforts at tax collection, including the collection of tax arrears (particularly from larger tax payers) and expenditure control, especially considering potential pressures on expenditure from sustained high oil prices Elaborate a comprehensive fiscal reform agenda to strengthen the budgetary outlook Reducing rigidities in the labour market will improve the business and investment environment and help job creation The staff believed that the current level of the exchange rate appropriately reflects market forces and should remain flexible

Policy recommendations from the IMF

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

235

Establish a comprehensive tax arrears collection plan with specific annual targets; strengthen the monitoring of arrears collection; and review the related administrative procedures The government intends to advance reforms in the public expenditure management system over the medium term

Improved confidence in the economy Current account deficit at 11% Revenue administration has been strengthened through recent major reforms and remaining weaknesses are being addressed Inflation remains high and volatile— Accelerating sharply through to September 2005 due to the supply shocks but falling thereafter. Domestic demand weak Rapid exchange rate depreciation

Economic performance has been adversely affected by a series of shocks. Real GDP contracted sharply in late 2004 following the devastating effects of hurricane Ivan. Recent economic policies have been guided by a medium-term socio-economic policy framework adopted by the government in early 2004.

Strengthen the regulatory framework for the financial sector, in particular the prudential framework for securities dealers Improve the teaching of science and to strengthen vocational training Address crime over the medium term in the context of the National Crime Plan

Economic conditions Objectives outlined Objectives during 2004 and in Article IV outlined in 2005 report budget

Economic background

Source: Collated by authors from Article IV Reviews

Date

Table 9.7 (continued)

The mission underscored that it would be unprecedented for a country to sustain, for a protracted period, the stringent fiscal discipline envisaged by Jamaica. Suggested the removal of the many exemptions that narrow the consumption tax base and the elimination of reduced rates and other features that complicate the tax system The mission stressed the mutually reinforcing links between higher growth and achieving greater debt sustainability While recognizing that the original fiscal targets no longer appeared feasible, the mission urged Jamaica to be more ambitious and adopt stronger policy stances

Policy recommendations from the IMF

236  C. CLARKE AND C. NELSON

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

237

In recent years, the authorities’ policies have largely been consistent with Fund advice. With the recent change of leadership in the governing party, attention is shifting towards national elections to be held by 2007. The economy has been buffeted by shocks and domestic demand has been feeble. Shocks continued to sap the economic recovery following Hurricane Ivan in 2004 and a remarkably active 2005 hurricane season exacted a further toll. Inflation remained high in 2005 and volatile accelerating sharply through to September 2005 due to the supply shocks but falling thereafter. The external current account balance weakened on account of the shocks, with some reversal in capital flows occurring during the second half of 2005. Available indicators suggest that aggregate demand has remained weak. The nominal exchange rate has depreciated in recent months following a period of relative stability. Fiscal targets have been missed. The persistence of low growth in Jamaica has been disappointing and was deemed somewhat puzzling. The authorities noted that growth was likely higher due to the large and informal economy but that further analysis was needed. The Staff agreed that growth should continue to be a key focus of future consultations and pointed to several growth-enhancing public policy priorities. Furthermore, there may be leeway to increase the quality of education and re-orient it to the needs of Jamaica. The discussions on risk mitigation centred on the financial sector. Following on recent strides to bring financial sector supervision and regulation in line with international best practice, the authorities remain committed to further strengthening the financial sector. Recent economic performance has been adversely affected by a series of shocks. The discussions focused on the needed policy response to recent developments as well the long-term challenges confronting the economy. The authorities remain committed to achieving a balanced budget over the medium term and to bringing about a steady decline in the debt-toGDP ratio despite the deviation from the fiscal targets in the short run. The mission noted that the revenue shortfall appeared to reflect policy slippages and declining tax compliance but agreed with the authorities that other factors were also at play. While recognizing that the original fiscal targets no longer appeared feasible, the mission urged the authorities to be more ambitious. There was consensus that the fiscal outturn for FY2005–2006 remained uncertain. Given the expected size of the shortfall relative to the FY2005–2006

238 

C. CLARKE AND C. NELSON

targets, the mission noted, however, the likely need for additional revenue measures in the context of the FY2006–2007 budget. The mission cautioned that the external funding available from the Petrocaribe agreement should not loosen the fiscal effort. Accelerating structural reforms will bolster the authorities’ medium-term fiscal strategy. Monetary policy has been geared at containing inflation by targeting base money while also seeking to engender a sustainable reduction in interest rates. The recent shocks and changes in the global environment have been particularly challenging for the conduct of monetary policy, given the fiscal dominance and growth concerns in Jamaica. The mission indicated a preference for pre-emptively and gradually increasing interest rates to confront pressures in the capital account. While the authorities supported the principle of proactive monetary policy, they believed that the recent portfolio shifts were temporary and, therefore, a case for tightening was yet to be made. The mission reinforced the view that fiscal policy was the driving force behind Macroeconomic developments, including long-term inflation, in Jamaica. The outlook is affected by the impact of recent developments on the government’s medium-term plan to reduce the high debt through fiscal consolidation. Against this difficult background, the imperative is to formulate a revised medium-term path that seeks to continue to make adequate progress at debt reduction. This revised debt trajectory remains, however, subject to the same risks as before. The projections also underscore the benefits of taking early fiscal action were further shocks to materialize. There are weaknesses in the national accounts and other real sector data. Regarding estimates of GDP, concerns relate both to its level and growth rate. The index weights are derived from the Household Expenditure Survey conducted in 1984. The outdated weights of the published CPI are derived from a household expenditure survey carried out in 1984. No data on industrial production indices, on wholesale or producer prices, on import volumes or on export or import prices have been reported for publication in the International Financial Statistics (IFS) in recent years. Jamaica’s ambitious medium-term programme has been weathering a difficult period, starting with Hurricane Ivan in late 2004. Jamaica’s efforts to reduce debt of such high magnitudes through fiscal consolidation alone is unprecedented—eliminating budgetary deficits as soon as possible remains crucial to realizing the authorities’ objectives.

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

239

Realizing the budgetary objective for FY2006–2007 and beyond will require both revenue measures and expenditure discipline. Monetary and exchange rate policies will require deft handling in the period ahead. Ensuring robust economic growth is crucial to the authorities’ macroeconomic strategy. The authorities are encouraged to continue to strengthen the resilience of the financial system and upgrade their statistical systems. The next two to three years will be critical for the authorities to meet their opportunities to secure rising and sustainable living standards for Jamaica. In retrospect, over the period 2001–2005 the goals of the government and the recommendations from the IMF has broadly remained the same. The Jamaican economy has struggled with a crushing debt burden from the 1980s onwards. The country continuously struggled to maintain high primary surplus, boost revenues, staying within the limits of stated expenditures, refrain from taking on additional debt and boosting structural reform. There was however significant progress made in strengthening prudential and supervisory policies and institutions. As such the IMF made similar suggestions each year to work on these trouble areas. Successful attempts have been made over the course of these years to curb the high debt-to-GDP ratio and put the country on a path to growth but the patterns remain clear, that any bout of progress is quickly eliminated by an adverse external shock, especially shocks related to natural disasters. The Fund has reiterated year after year the need to keep within the limits of the budget, strengthen the financial system and improve policy and structural reform in order to build a firm foundation for growth.

Article IV/Staff Monitored Programme (SMP): Through the Lens of Actor Network and Critical Discourse Analysis (CDA) Discourse within Critical Discourse Analysis (CDA) according to Fairclough entails texts, discursive practices and social practices, the latter to which perspectives of structure and action can be ascribed (Dremel and Matić 2014). CDA concerns the properties of text, their production, distribution and consumption, the socio-cognitive processes of producing and interpreting them, social practice in various institutions and the relationship of this practice to power relations and hegemonic projects at the societal level (Fairclough 1992). Thus, the ‘texts’ of the Article IV/SMP

240 

C. CLARKE AND C. NELSON

Arrangement actor network encapsulates and provides the language for inscribing the network, but also provides the ‘new discourse’ for actors being part of the Article IV/SMP network of relations to inculcate. The text of the IMF Article IV/SMP Arrangement would inform the discourse and practices and so on to be articulated within the Government of Jamaica or Jamaican Actor Network (JAN) through the Ministry of Finance, which becomes the Obligatory Passage Point (OPP) responsible for co-opting other actor networks or participants, through which to become part of the solution to the issues that need resolving. The Article IV/SMP Arrangement although not binding, emerges as the macro social network. The text of the Article IV/SMP Arrangement and the operationalization of the enactments therein presents and provides new modalities for institutions, relations, identities, representations and ways of being and acting to be subscribed to and inculcated within the established practices and processes of the actor networks of the OPP/JAN. The text of the Article IV/SMP becomes the new lens through which interactions are viewed as well as the discourse to benchmark the OPP/ JAN exchanges, engendering connectivities, which includes JAN inculcating the new discourse and social practices throughout. It is through the intermediary (Bijker and Law 1992) of text that the OPP/JAN becomes locked into the discourse and requirements of the Article IV/SMP network. There are several contextual features of Jamaica’s political economy, its actor- institutions, subjects and connections that have influenced the modalities, patterns and structures of the state network and the multiple discourses and practices demonstrable within the Jamaican state actor network. Actor networks composing the JAN—namely the ministries and government entities, those that have responsibility for various attributes of the subject fields, monetary policy, fiscal policy, treasury management, tax reform, interface through the OPP with the Article IV/SMP actor network. These various actor networks of the JAN are faced with the choice to articulate and inculcate the discourse requirements of consecutive Article IV/SMP Arrangements, which creates tensions and contentions within the connectivities at the intersect of existing discourse and practice in the various fields—economic, fiscal, debt management and so on, with that of the ‘new’ discourse of the Article IV/SMP Arrangements. The latter seeks to establish macro social status whereby its discourse and practice overturns those of the JAN, substituting them with its own to

9  THE LOCAL APPROACH ‘UNDER THE MICROSCOPE’: INTERNATIONAL… 

241

attain maximum compliance towards ‘oneness’ within the space of flows, simplified as a ‘black boxed’ macro social network, reflective of conformity and adaptation of its discourse and practice. Meanwhile, the Jamaica actor network replaces or displaces its established discourse and practice by inculcating the Article IV/SMP Arrangement’s discourse and associated social practices, inculcating relations, processes and so on, ways of being and ways of doing within established practices and processes. The discursive modifications or adaptation arises within the JAN differentially depending on the degree to which the actor networks of which it is also composed, inculcate and operationalizes enactments of the discourse of the Article IV/SMP Arrangement. Consequently new modalities of discoursal operations for these actor networks are created, implicating their existing relations, identities and representations and their modus operandi or raison d’être within the connectivities of and within the JAN. This is expressed in overall outcomes in the subject fields in areas where specific control is possessed by the actor networks, that results in transformation and change, within the purview of discursive modification. This signals the displacement of the old discourse and modalities in the JAN to attain the new as prescribed by the discourse and practice through the network connectivity that captures the ‘new’ discourse of the Article IV/SMP Arrangement. Negotiations are supported by a process of mutual definition (Law 1991) involving the inscription of intermediaries by the actors (Law 1991) to the point where each element becomes dependent on one another in a process of mutual adaptation. To fully capture the discourse of the Arrangements requires the reigning in of the traditional discursive behaviour and practices of the individual actors of the Jamaican actor network and social relations to become aligned to the Article IV/SMP Arrangement’s network, which also involving joint decision-making and consultations supported by an institutional framework of operations. The success and efficiency of the outcome to avert crisis is contingent upon the degree to which the JAN network and actors therein inculcate the new discourse of the Article IV/SMP to the point where its old discourse is replaced, enhancing the efficiency and output of the alignment within a shifting open alliance system (Williams-Jones and Graham 2003: 273), where each plays a role to influence one another (Shaikh and Cordello 2006; Law 2007) towards the networking of interests. The Jamaican actor network’s degree of success depends on mitigating the multiple discourses within its own network and soliciting the ‘buy in’ of the actors in its network at different scales and levels enabling the

242 

C. CLARKE AND C. NELSON

continuous reconfiguration of network relationships, practices, discourses, identities and social relations to become aligned with the discourse and practices of the actor network of the Article IV/SMP Arrangements. When network negotiations are complete, certain interests are captured and carried forward as inscriptions, being retained to maintain the continued translation of interests within the network.

Bibliography Bijker, W.  E., & Law, J. (1992). Shaping technology/building society: Studies in sociotechnical change. Cambridge: MIT Press. Dremel, A., & Matić, R. (2014). Discourse and/as social practice – The analysis of the problem of resistance and hegemony. Mediterranean Journal of Social Sciences, 5(22), 155. Fairclough, N. (1992). Discourse and social change. Cambridge: Polity Press. IMF (International Monetary Fund). 2001. Jamaica: Staff report for the 2001: Article IV Consultation and a new staff-monitored programme. IMF (International Monetary Fund). 2002. Jamaica: Staff report for the 2002: Article IV Consultation and a new staff-monitored programme. IMF (International Monetary Fund). 2003. Jamaica: Staff report for the 2003: Article IV Consultation and a new staff-monitored programme. IMF (International Monetary Fund). 2004. Jamaica: Staff report for the 2004 port for the 2002: Article IV Consultation and a new staff-monitored programme. IMF (International Monetary Fund). 2005. Jamaica: Staff report for the 2005: Article IV Consultation and a new staff-monitored programme. Law, J. (1991). Strategies of power: Power, discretion and strategy. In J.  Law (Ed.), A sociology of monsters: Essays on power, technology and domination (pp. 165–191). London: Routledge. Law, J. (2007). Actor network theory and material semiotics. Centre for Science Studies and Department of sociology. www.heterogeneities.net/publications/ Law-ANTandMaterialSemiotics.pdf Shaikh M., & Cordello, A. (2006, March). From epistemology to ontology: Challenging the constructed truth of ANT. London School of Economics & Political Science, Working Paper Series 143. Williams-Jones, B., & Graham, J. E. (2003). Actor-network theory: A tool to support ethical analysis of commercial genetic testing. New genetics and society, 22(3), 271–296. https://doi.org/10.1080/1463677032000147225.

CHAPTER 10

Born of Crisis: The Public Sector Memorandum of Understanding

Introduction Jamaica has had tempestuous history of challenges, some internal and external in character, at its interface and in the process of integration with the complexities, within the connectivities composing the global political economy. Several moments border on crises. Crises in the nature of the interaction with the globalized environment, from the early colonial era with the demise of sugar and bananas as a function of structural dependence. From the 1970s onwards, with the overexpansion of the bauxite industry and its eventual decline, macroeconomic instability was triggered for the state in the aftermath of the drop in global demand. The focus in national policy making as well as resource allocation from multilateral sources has surrounded the implementation of austerity budgets and a pre-occupation with the macroeconomic environment and pre and post structural adjustment programmes to engender development. The persistence of fiscal difficulties mitigates against capacity building and accumulation which is substituted by debt servicing, offsetting strategies within the short term. The capacity to treat with these situations and fast encroaching demands of the globalized environment, continue to expand the capacity requirements for success amidst efforts to ‘catch up’. Absorbing the debt servicing costs and moderating wage increases represented major challenges for the budget. Policy changes amidst structural adjustment reforms had resulted in the re-modelling of processes, and more integrated networked interactions © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_10

243

244 

C. CLARKE AND C. NELSON

between functional ministries to establish new coordination mechanisms to link multilevel governance within the policy making system and transference of technical support. One could argue that during the period of structural adjustment that technical capacity was enlarged through various forms of multilateral financial and technical assistance arrangements. The residual structures after IMF lending ceased remained in a similar orientation. Other experiences relate to the crisis condition of debt in the 1980s prefaced by the nature of the engagement with and fluctuations in, the borrowing relationship with the International Monetary Fund and negotiating the ‘halls of power’, to the financial crises of the mid-1990s. Crisis surfaces, in the context of elements of political destabilization, positioned on the fringes of contests of ideological differences and flux in the modalities of choice and style of economic policy management pursued, when positioned at odds with the hegemony of neoliberal, geopolitical, ideological pathways. Jamaica’s history is replete with crisis conditions due to the occurrences of natural disasters as a small, vulnerable, heavily indebted island economy and their impact on the development trajectory, with a ‘one step forward, two step backwards’ effect. Government and governance, teeters on the edge of crisis attributed to internal bipolar political discord, accentuating divisions and facilitating corruption, enabling the destabilization effect of crime and fracturing of social capital and societal cohesion. Crises have emerged as a multifaceted phenomenon, impacting the shape and form and function of the Jamaican political economy, implicating political and state capacity, capability and the coalescing of the resources required to engender good governance and domestic policy choices, that configure the conditions for comprehensive economic growth to materialize in the form of making development a reality felt by all. From a historical context, the vulnerability of economic dependence trending  towards the crisis condition, one can argue, has bordered on becoming a norm or at least a prevalent feature to which the Jamaican state and economy has weathered, become accustomed to and responded to over the years. Baccaro and Lim (2006) hold the view that when governments are vulnerable and unable to manage crisis it is forced into forms of governance which entails degrees of power sharing. Consequently, what seems unthinkable under conditions of normal politics suddenly becomes possible when a country is struck by a shock to the system that threatens the

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

245

national interest and international prestige. Actors that used to fight each other ferociously find themselves rallying around a shared cause. (Baccaro and Lim 2006: 5)

Social partnerships are born as an outcome of social dialogue becoming a dynamic construction tailored to the context of globalization, the state, time, society and culture. The International Labour Organization (ILO) defines social dialogue broadly to include all types of negotiation, consultation or simply exchange of information between, or among, representatives of Governments, employers and workers, on issues of common interest relating to economic and social policy. It can exist as a tripartite process, with the Government as an official party to the dialogue or it may consist of bipartite relations only between labour and management (or trade unions and employers’ organizations), with or without indirect Government involvement.

Positioned by Kelly (2004) as a special kind of labour cooperative agreement which varies in the balance of power between parties, Martinez-­ Lucio  and Stuart (2002) perceive social partnership to be a means of reconstructing labour and capital relations around partnership as a pluralist dialogue, which in effect replaces hostile industrial relations with a consensus of a new organization of work. Successful social partnerships are mutual and open, characterized by a willingness to dialogue, deriving a shared commitment and understanding, within the framework of the delivery of measurable improvements for all parties, undergirded by a commitment to employment security for all workers (Boyd, 2004). The most successful partnerships originate as responses to serious national problems or crisis (Baccaro and Lim 2006; Mellahi and Wood 2004; O’Donnell and O’Reardon 1996; McCartan 2002), such as war and inflation. Kelly (1998: 107) explains that during economic downturns that recurring patterns of power shifting to the hands of employers lead to pressures for the terms and conditions underlying accords to be re-examined. Gourevitch (1986: 21) also argues: Each crisis involves a sequence of events which can be summarized quickly … preceding the crisis, a policy approach and support coalition developed. Then came crisis, challenging both policy and coalition.

246 

C. CLARKE AND C. NELSON

One attitudinal frame, entails the willingness to dialogue and cooperate to find common responses under crisis as well as prosperity. Institutions are therefore of critical importance along with independent representation from social partners, to find a common response and enabling consensus to be derived around the challenges and problems (Ghellab and Vylitova 2005), leading to the reconciliation of differences through interactive learning (Ballantyne 2004). Jamaica’s historical and crisis context, became instrumental in configuring national and specific legacies of social dialogue (Martinez-Lucio and Stuart 2002), whereby actors, bringing their own characteristic discourses determined modalities of relationship, such as in the case of the development of the public sector memorandum of understanding or ‘MOU’ social partnership agreement in 2004. Parties to the accord were the government, the labour movement, in the form of the Jamaica Confederation of Trade Unions (JCTU) came together, catalysed by a crisis context and timeline from which a bipartite social partnership arrangement was derived.

Born of Crisis The first catalyst from which began the negotiations towards the MOU Agreement, emerged from the ‘crisis’ surrounding the macroeconomic imperatives prevailing, partly a legacy from the financial crisis of 1999, which prompted several policy measures and actions by the government to address them. The high debt-to-GDP ratio, from 1998 to 2003, created difficulties to finance the budget, given the high fiscal deficit which constrained the ability of the government to access resources from the capital markets. Loans for multilateral creditors, domestic and foreign debt interest payments, severely tested the efficacy of the budget to handle its commitments. Measures were taken to contain increasing recurrent expenditures, such as measures capping the public sector wage bill and employment in the sector by the issuance of ‘Circular 21’ by the Ministry of Finance and Planning. The implementation of ‘Circular 21’ had the objective of cutting costs from public sector salary-related expenditures in the budget to help preserve its integrity. This need to curtail increases in salary related budgetary expenditure was attributed to the size of the public sector and the fiscal pressure that it exerted.

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

247

The second catalyst was triggered by the Jamaica Confederation of Trade Unions (JCTU) responding promptly to the unilateral promulgation of the Circular by requesting immediate dialogue, which triggered negotiations leading to a trade off as encapsulated in the text of the MOU social partnership agreement. The major quid pro quo between the government and the JCTU was the maintenance of the current size and cost of wage expenditure to the budget coupled with a wage freeze. Secondly there would be no job losses and 15,000 workers would not be made redundant. The size of the public sector was growing along with the associated wage bill which was unsustainable as an outcome of stymied economic growth over the years, that overall, curtailed the ability to pay given the fiscal resource constraints. There was an interactive dialogue held between the Jamaica Confederation of Trade Unions (JCTU) and the government of Jamaica in the process of negotiating the public sector memorandum of understanding (2004–2006). Media reports state that the MOU Agreement network of relations provided a mutual ‘breathing space’ (Thomas 2004) for the parties with respect to the government addressing the macroeconomic conditions as the core issue and the public sector to prepare for impending change and possible retrenchment. Complaints were registered by the public sector, especially with respect to the wage freeze. However, old issues unresolved within the public sector (Downes 2003, Bissessar 2002, Mills and Robertson 1990) were suddenly thrown to the forefront in the dialogue, by the implementation of the Agreement. For example, the wage freeze followed on the unresolved commitments pending under the Heads of Agreement for Civil Servants, where salaries were to be increased to 80% of market. The freezing of salaries was indicative of the beginning of negative responses to the MOU. Although a sectoral pact, the MOU 2004–2006 social partnership, was broadly applicable to the entire public sector and gained even more significance especially with respect to its pervasive effect on the entire Jamaican society inclusive of private sector wage bands.

MOU Agreement The MOU Agreement consisted of three overarching provisions or strategies for implementation with regard to Restraint, Macroeconomic Management and Public Sector Development. There were three

248 

C. CLARKE AND C. NELSON

subcomponents of the Restraint Provision, namely Wage Restraint, Expenditure Restraint and Employment Restraint that captured degrees of ‘restraint’ to be exercised by the Parties to the Accord. Employment Restraint  specified the preservation of jobs and no separation of tenure except by justifiable dismissals as agreed between the Parties. Vacancies were to be filled by persons acting in the positions for more than six months, negating any new additions to the workforce. Various institutions were to manage these processes for example the Office of the Services Commission that handled evaluations of performance and confirmations for vacant positions. Wage Restraint  was included with the view to achieve a reduction in the wage bill applicable to all contracts of employment in the public sector. Differential treatment was afforded in respect of existing contracts, for persons already pensionable or due for promotion, dependent upon the status of contractual negotiations or obligations. Expenditure Restraint  led to the identification of common areas of excessive expenditure and entities were therefore required to put in mechanisms to systematically monitor expenditure patterns and use of assets. The issue of abuse of government resources and overall expenditure was endemic to the public sector and this component was a mechanism to address this problem. Every public sector entity was required to establish a Cost Savings Committee and submit reports detailing the savings made by Staff effort and improved financial management activities that produced greater efficiencies. This required effort to be expended towards the examination of the operational activities and internal workflows and possible quantitative structural changes that could engender positive savings. Entities would receive an incentive of 40% of the savings achieved to be allocated for Staff welfare activities of their choice. With respect to Macroeconomic Management the provision captured the macro economic targets consistent with the medium-term economic policy framework that would be used by the government to manage economic policy. There were specific targets to be achieved to ensure that the inflation rate remained within the targeted band of 8–9% in 2004–2005

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

249

and 6–7% in 2005–2006. Specific fiscal policy measures to generate a deficit in the range of 3–4% in FY 2004–2005 and a balanced budget in FY 2005–2006 were included to ensure the delivery of outcomes consistent with the medium term profile. Under the provision of Public Sector Development, three groups were to receive training benefits namely the Ministry of Health (MOH), the Ministry of Education, Youth and Culture (MoEYC) as well as the Ministry of Local Government and Community Development (MLGCD). For the Ministry of Health more nurses were to be trained in partnership with tertiary institutions. Secondary school principals were to be trained in techniques of school administration and the MLGCD had to improve the services and the current cadre of Staff with respect to the fire services. The Cabinet Office had responsibility explore the feasibility of an exchange programme within government departments as well as cross training between government departments and private sector entities. This was included bearing in mind the possibility off public sector layoffs and the need to prepare for retrenchment by enhancing the skill compliment of the public sector workforce. In these network relations, discourse is held to embody the connections which are further explored and deconstructed using the CDA methodology of Norman Fairclough (Fairclough 1992, 2001, 2003) which provides for concomitantly a deconstruction of the ‘black box’ of the MOU network relations using discourse and text as the unit of analysis. Actor Network Theory (ANT) Actor Network Theory (ANT), has its origin in science and technology but is unique with regard to its treatment of human and non-human actors which are considered equal, within the context of social interaction. The ‘continuous relational interplay is the performative characteristics of actor networks’ (Shaikh and Cordello 2006, 11) and the translation of interests in, by and through relations’ (Williams-Jones and Graham 2003; 273). An actor can also be a network in its own right as an actor network, composed of intermediaries which have been accepted by the actor which in turn transforms them, to carry the actor’s signature of authorship (Law 1991; 142) towards being black-boxed. ANT’s epistemology views the world as consisting of networks linked with elements internal and external to it, becoming enlarged (Latour 1992) by additional associations and hence requiring more effort to hold and

250 

C. CLARKE AND C. NELSON

sustain the original meaningful relation, despite appearances of stability over time. When network negotiations are complete, certain interests are held and carried forward while others become obsolete. These specific interests held, captured as inscriptions, represent what has to be achieved in order to maintain the overall translation of interests within the new network. Networks characterized by a high level of convergence demonstrate agreement, being highly aligned and coordinated (Ritzer 2007: 2). Network persistence is a function of role repetition by actants (Garson 2002: 5). Actors are allowed to translate their objectives through many vehicles, such as choice, by adding other actors’ powers to their own, or by the prescription of an object (Stalder 2000). As ‘the sociology of translation’ (Callon 1986: 196), ‘translation’ has also been considered a process of social ordering (Lowe 2001), whereby continuous translation at varying levels, generate institutions, governmental organizations and agents that exist over time (Williams-Jones and Graham 2003). The analysis of ordering struggle is central to ANT (Law and Hassard 1999), where each actor has their own interests and the stability of the network will be a function of an effective, translation process, where interests are negotiated, become the macro social actor, conferred with the ‘authority to speak or act on behalf of another actor or force’ (Callon and Latour 1981: 279), within the context of dependent network relations. ANT enables the MOU Agreement construed  as an actor, to be afforded a discourse of its own and  to become  capable of attaining a ‘black-boxed’ status within the MOU network of relations created through translation—problematization, interessement, enrolment and mobilization—of the actor networks of the Government of Jamaica (GJN), the trade unions (JCTU) and the public sector. Critical Discourse Analysis There is a role for discourse in capturing the interactions between and within social structures inclusive of social action and agency, in ‘ways of representing’ social life (discourses), enacted in specific ‘ways of acting’ (genres or social practices) and inculcated in certain ‘ways of being’ (certain styles) Fairclough (2003). Discourses then, are ‘potent causal agents in their own right’ (Wetherell and Potter, 1992, 90) enacted and developed within a social context (which determines, contributes and sustains its existence), Critical discourse analysis sees discourse language used in speech and writing as a form of social practice with a dialectical relationship, where the

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

251

discursive event is shaped by situations, institutions and social structures, but in return, it also shapes them (Fairclough and Wodak 1997; 55). It examines the role that discourse plays within processes of change within the network of practices and the interchange that ensues between the semiotic and other social elements. It also seeks to explain dimensions of unequal power relations and social injustices—in or over discourse through the analysis of language and practice within a particular context. The hidden relationships between discourse and society are explored through the examination of discursive practice, texts, social, socio-cultural structures and institutions ideologies and related processes, as means whereby power is secured within hegemonic systems. It involves the systematic exploration of relationships of causality and determination between discursive practices, events, wider socio-cultural relations and processes. This is with a view to ascertain the way in which such practices events and text emerge and are ideologically shaped by power relations and the inherent struggles over them. The Discourse of the Trade Union Movement The decline in the state capabilities, in many developing countries resulted in drafting in of private interests into public service delivery to maintain their service levels, blurring the public private divide. Fox and Taylor (2005) explain that Jamaica, as a small developing state has not been excluded from the effects of globalization and notes the changing patterns of the labour force since 1990. Trade liberalization and technological development has facilitated efficiencies in foreign production causing the displacement of local domestic production reducing the need for unskilled labour. Unemployment rates were stable at about 15% between 1991 and 2002 with a dominance of low skilled employment as well as declining participation rates (Jones and Cruickshank 2004) becoming 13.1% in 2003 and 11.4% 2004 and 10.9% in 2005 (STATIN). There has been a resultant change in the labour profile which reflects the structural changes in the economy caused by globalization, especially as Jamaica moves towards being more of a service economy. Crises in varying dimensions had their toll, diminishing resources in the 1980s and 1990s, as several  economic crises  emerged requiring Governments to incur increases in public expenditures, economic

252 

C. CLARKE AND C. NELSON

restructuring and experience flailing efforts to stem falling state revenues within the context of limited taxation and financial downturns, which are discussed in Chap. 8. The labour unions that emerged during the 1930s in Jamaica gave rise to an industrial relations culture that was combative, with weak dialogue between the unions and management, fostering a labour relations environment characterized by work stoppages and disruptions in productivity. The major unions were outgrowths of the two political parties—the Jamaica Labour Party (JLP) and the People’s National Party (PNP), which influenced their discourse and negotiating stances within the bargaining process. This combination precipitated an environment of low trust between capital and labour aggravated by the difficulties of sustaining and broadening policy cooperation, coordination and coherence within and beyond the environs of structural adjustment programmes carried out by the government. This apparent vacuum at the interface between capital, government and labour became accentuated with the continued effects of globalization which contributed to an already unstable labour market. There was an ‘erosion of the capacity to cooperate for collective purposes to manage risk, impairing the capacity to fabricate policy and institutional congruence (Jones and Cruickshank 2004). The trade union movement in Jamaica mirrored the development of the two major political parties, the Bustamante Industrial Trade Union (BITU), which advocated measures relating to worker rights and benefits in 1938, of which the leadership of Alexander Bustamante was instrumental in the creation of the Jamaica Labour Party as well as being active in the pre-independence movement. Norman Manley who was the founder of the National Workers’ Union (NWU) was the cousin of Alexander Bustamante but aligned to the People’s National Party (PNP), who was also active in its development commensurate with the movement towards independence. These two unions influenced the development of the political parties, within the context of them being separated along ideological lines in the early years. One abiding feature of the trade union movement was the prevalence of rivalry, bordering on being conflictual. The environment for the formal unity within the trade union movement was stymied by one group being antagonistic against the other in concert with the traditional antagonism between the two parties. Some of the constructs contributing to the characteristics of the industrial relations climate are antecedent, in terms of residual attitudes and perceptions concerning labour and management. These antecedent

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

253

features are grounded in the structural against the backdrop of the legacy of colonialism and plantation society, hierarchical relationships, issues of power and economic ordering of the factors of production at the nexus of the attitudes between plantation owner and that of the slave or freedman that persist in the psyche between management and labour. Within these contexts, combative power struggles were a constant feature of the management and worker relationships. Jamaica averaged roughly 600 industrial disputes a year, including 80–90 annual work stoppages in the first half of the 1980s.1 The economic state of affairs and borderline crisis scenarios as indelible features of the Jamaican economy and society exacerbated the incidence of strikes and reported industrial disputes into the 1990s, with the increased inflationary impact on the standard of living. See Fig. 10.1. Goolsarran (2006) notes that strikes in the 1980s were mostly in relation to public sector lay-offs. Combative power struggles also prefaced the political dimension as both labour and political parties became part of the discourse of the national movement for political independence in Jamaica, between political parties. The partnering of the union movement with the political movement overflowed into the contemporary dynamics of labour management relations (Goolsarran 2006). Munroe (1992) indicating that the unions became a vehicle to ‘deliver’, with implications for the balance of power within industrial relations. Apart from the adversarialism, the discourse in terms of ways of acting for trade unions in Jamaica, were labour related social practices with origins emanating from also being part of the global network of practices and order of discourse through connectivities to the Conventions of the International Labour Organization (ILO) network, reflecting its discourse and practice, being identified and adopted in the framework of the labour genre practiced within states. It can be argued that liberalization, the effect of structural adjustment policies and insecurities of the volatile labour market, effectively eroded the strength of the trade unions and their ability to augment and respond to global trends. In an effort which could be interpreted as being pragmatic, as well as to pool scarce resources and recoup collective bargaining strength, an alliance of trade unions beyond the NWU and BITU, to

 http://countrystudies.us/caribbean-islands/29.htm

1

254 

C. CLARKE AND C. NELSON

300 250 200 150 100 50 0

1990

1992

1993

1995

1997

1999

2000

Disputes Fig. 10.1  Reported Industrial Disputes in Jamaica, 1990–2000. (Source: Based on Taylor, O.W., 2001. The Employment Relationship (Scope) National Study 2001 (Jamaica https://www.ilo.org/wcmsp5/groups/public/%2D%2D-ed_ dialogue/%2D%2D-dialogue/documents/genericdocument/wcms_205368.pdf)

include other unions2 resulted in the creation of the Jamaica Confederation of Trade Unions (JCTU) in 1994. The discourse of the public sector of Jamaica was informed by the United Kingdom Westminster model characterized by hierarchical models of authority political and legal traditions, with top-down modalities of government participation and hegemonic command and control procedures, what were underwritten by a philosophy that the government knows best. Some Caribbean authors take the position that the model doesn’t adequately reflect Caribbean realities. Other approaches and modalities of the 2  The Jamaica Teachers’ Association (JTA), the Jamaica Civil Service Association (JCSA), the Nurses Association of Jamaica (NAJ), the Union of Technical, Administrative and Supervisory Personnel (UTASP), the Union of Schools, Agriculture and Allied Workers (USAAW) and the Jamaica Union Public Officials Public Employees (JUPOPE).

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

255

public sector’s approach to their administrative delivery of services were influenced by Anglo governance that emphasizes the ‘hollowing out of the state’ by proponents such as Rhodes (1997) as well as joined up government (Pollitt 2003) and utilizing  techniques within New Public Management (Hood 1998). The Civil Service formed within the colonial dispensation were ‘colonially conditioned bureaucracies efficient as far as they serviced requirements of a law and order-oriented government’ (Mills 1970).

Response to the MOU Some public sector management and government members externally, were reluctant to accept the new position of the trade unions afforded by the new discourse, their increased advocacy and heightened inclusion within policymaking fora. This resistance was demonstrated by decisions made unilaterally by agencies whether advertently or inadvertently, that required consistent tracking and for leaders to be prompted to deliver on the agreed provisions. Management was scrutinized by Government, pressured by the unions to inculcate and enrol in the new discourse, while workers, exerting a pressure of their own, agitated for decisions on appointments and benefits. The MOU discourse emancipated public sector workers to become proactive and border on militancy as suggested earlier, but with a different cause, rather than the passive acceptance of the status quo, in the pre-­ MOU dispensation. Within the public sector, management’s stereotypical ‘business as usual’ traditional ‘discourse’ was depicted as being unresponsive, which conflicted with that of the Staff being ‘emancipated and empowered’, or being ‘enrolled’ and ‘mobilized’, by inculcating the discourse of the MOU, leading them to agitate for benefits that were withheld or not delivered, although afforded through the MOU. Within the trade union movement, there was resistance from the traditional school, with respect to the institutionalization of social dialogue or non-adversarial approaches, with the inculcation of a discourse of dialogue and consensus. Other contests emerged from the smaller unions whose voice was being curtailed by larger union constituencies through the centralized collective bargaining mechanisms. The participation ‘at the table’ with equity with other stakeholders, relationally facilitated the unions to ‘box and dance’ (Huzzard et al. 2004) from the MOU standpoint of becoming equal partners, being privy to

256 

C. CLARKE AND C. NELSON

transparent disclosures of information, while seeking to negotiate amicably, and consensually, through consultation, affording them a degree of reciprocity and mutual benefit from within the agreed arrangements. In the Government network of relations, the challenge of obtaining the ‘buy in’ from Senior Directorate signalled a lack of enrolment within the GJN and struggles to inculcate the new discourse. This was reflected by the number of disputes, revealed occasionally in media reports, that were quickly quelled by arbitration through the Monitoring Committee. The MOU has exacerbated the need for good governance practices and tenets of democratizations and inclusiveness to be extended and intensified within the operations of the civil service. The revelations concerning the challenges of the human resource functions within the service brought home the view that the success in part of institutional reforms and structural changes, have been compromised by the lack of a similar emphasis on the human resource component within the service, which the MOU brought into focus. The effect of the MOU discourse was conditioned by its placement within the hierarchy of network relations within institutions and between the partners within the network.

Conclusion The MOU’s potential as an effective tool for re-engineering, to address issues of size, efficiency, bureaucracy and productivity was not realized. It provided a great opportunity to foster long term restructuring in the public sector and social dialogue as Jamaica sought to reposition and modernize its labour force and reform its labour economy. The forging of another tier or a new tool of governance through the Monitoring Committee within the public sector landscape signalled the potential for a new paradigm in industrial relations practice within the public sector with implications for conflict resolution nationwide. From the perspective of the international community and institutions, the Agreement conveyed the participation of a united labour movement and espoused certain principles that proved to be a valuable aide in the assessment of Jamaica’s stabilization efforts by multilateral development partners. The MOU reflected interactions at the global governance level, where sovereignty and authority to make policy has been ceded in part, to supranational organizations. The dynamics of globalization and the interdependence of decision making has had an influence on growth and development

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

257

to be achieved and defined in the context of ‘the national interest’, which is being interpreted, prioritized and accepted beyond the state’s perception of such, to become synchronized with that of collective and group interests of domestic sub actors who are now included in the policy process. For the public sector, the MOU became an instrument of ‘new’ governance within the public sector, which challenged the ‘status quo’ cultural practices of public sector managers concerning aspects of human resources management practices. The intense focus on the human resource management functions and performance of management afforded by the MOU led to an exposure of the issues and implicitly created tense power relations between management and unions. The MOU became a tool of empowerment leveraged by the unions to exert pressure for compliance on the part of the management, as it included, for example, provisions and mechanisms to get appointment decisions made by management which were overdue. This further accentuated managements’ reticence, in part, to exercise the options and use the mechanisms provided for the approval of employment and appointments during the period of restraint. There is a reciprocal need to enforce existing mechanisms and institutions that monitor management performance and that requires the compliance of the public sector managers, re-evaluating the criteria which establishes and reciprocally enforces the standards and performance guidelines for them. The MOU highlighted the importance of leadership in the public sector in the effective implementation of Agreements and their objectivity and accountability in conveying and implementing them, as well as management possessing the maturity to respond objectively to weaknesses, given that there are ultimately repercussions, for workers and their effective, efficient productivity and performance. Critical attitudes and behaviours are essential to managers and there is little correlation between academic brilliance and effective management skills. Isaacs (2011) notes that there are increasingly more persons with degrees in the public sector, which has not meant that there is more effective management and suggests that management of human and social relations requires attributes of ‘tolerance, humility, earned respect, and effective communication skills’, bolstered by a culture of concern or ‘a Human Face’, within organizations.

258 

C. CLARKE AND C. NELSON

A study undertaken  by Brewster (2007)3 which compares the social capital in Barbados, which has had five social partnerships from 1993 to 2007, against that of Jamaica, argues that the low stock of social capital was a brake on development in the latter and there needed to be mechanisms to mobilize it for development. Havelock Brewster,4 at a parliamentary forum, expressed the view that conditions for social partnership in Jamaica has been apparent but such an arrangement has never been realized on a national scale, because of the lack of social capital. But one could argue that the power of self-preservation, the need to survive and minimize the risk of loss can become the door to entertain sharing of power, which overrides social capital deficiencies, by producing an imperative of need, to negotiate at all costs and agree at all costs. An example of this was seen in the bipartite arrangement under the bauxite MOU where the destruction of the sector had to be averted at all costs and the importance of the mode of leadership came to the fore as an intangible element that proved sufficient to bridge the divide. In similar fashion, the role of leadership and the motivation of the mutual coincidence of need outweighed the costs or risks of the loss and prevailed within the context of the MOU Monitoring Committee and with regard to the implementation of the MOU itself, which augured well, for the realization of benefits from a national social partnership arrangement.

Bibliography Baccaro, L., & Lim, S. H. (2006). Social pacts as coalitions of “weak” and “moderate”: Ireland, Italy and South Korea in Comparative Perspective. International Institute for Labour Studies Geneva. Ballantyne, D. (2004). Dialogue and its role in the development of relationship specific knowledge. Journal of Business & Industrial Marketing., 19, 114–123. Bijker, W.  E., & Law, J. (1992). Shaping technology/building society: Studies in sociotechnical change. Cambridge, MA: MIT press. Bissessar, A. M. (2002). Globalization, domestic politics and the introduction of new public management in the Commonwealth Caribbean. International Review of Administrative Sciences, 68(1), 113–125.  Being renewed twice since its inception, 2006–2008 and 2008–2010.  Brewster H (2007) Understanding Development Challenges of the Caribbean, OAS/ World Bank Forum for Parliamentarians on ‘Shaping A Trade Agenda to Promote Regional Integration and Competitiveness for CARICOM’, St. Lucia, May 17, 2007. 3 4

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

259

Boyd, S. (2004). Partnership Working: European Social Partnership Models. Scottish Trade Union Congress (STUC). Social and Economic Partnership Project. https://www.webarchive.org.uk/wayback/archive/20180518064202/ http://www.gov.scot/Publications/2004/05/19376/37359 Callon, M. (1994). Is science a public good? Fifth Mullins lecture, Virginia Polytechnic institute, 23 march 1993. Science, Technology, & Human Values, 19(4), 395–424. Callon, M. (1986). Some elements of a sociology of translation: Domestication of the scallops and the fishermen of St Brieuc Bay. In Power, Action and Belief (pp. 196–223). London: Routledge. Callon, M., & Latour, B. (1981). Unscrewing the big leviathan: How actors macro-structure reality and how sociologists help them to do so. Advances in social theory and methodology: Toward an integration of micro-and macro-sociologies, 1, 277–303. Callon, M., & Law, J. (1986). Power, action and belief: A new sociology of knowledge? (pp. 196–223). The Science Studies Reader. Londres: Routledge. de Jong, B. (2007). Shedding light on the darkness: Using the actor-network theory to analyse the distribution of power. Paper for the 47th Europe regional science association. Paris, France, 29 August – 2 September 2007. Downes, A.S. (2003). Productivity and competitiveness in the Jamaican economy. Dremel, A., & Matić, R. (2014). Discourse and/as social practice – The analysis of the problem of resistance and hegemony. Mediterranean Journal of Social Sciences, 5(22), –155. Fairclough, N. (1992). Discourse and social change (Vol. 10). Cambridge: Polity press. Fairclough, N. (2001). The dialectics of discourse. Text, 14(2), 231–242. Fairclough, N. (2003). Analysing discourse: Textual analysis for social research (p. 41). London/New York: Routledge. Fairclough, N., & Wodak, R. (1997). Critical discourse analysis. Discourse studies: A multidisciplinary introduction, 2, 258–284. Fox, K., Taylor, O., (2005). Globalisation and the education, health and labour sectors, in Jamaica human development report, global challenges, a world of opportunities. Kingston, Jamaica: Planning Institute of Jamaica/Pear Tree Press. Garson, G. D. (2002). Case study research in public administration and public policy: Standards and strategies. Journal of Public Affairs Education, 8(3), 209–216. Ghellab, Y., & Vylitova, M. (2005). Tripartite social dialogue on employment in the countries of South Eastern Europe. International Labour Organization. Budapest: ILO SRO. Goolsarran, S.J. ed., 2006. Industrial relations in the Caribbean: Issues and perspectives. International Labour Office-Caribbean Gourevitch, P. (1986). Politics in hard times: Comparative responses to international economic crises. Ithaca: Cornell University Press.

260 

C. CLARKE AND C. NELSON

Hood, C. (1998). The art of the state: Culture, rhetoric, and public management. Oxford, UK: Oxford University Press. Hunter, S., & Swan, E. (2007). Oscillating politics and shifting agencies: Equalities and diversity work and actor network theory. Equal Opportunities International, 26, 402–419. Huzzard, T., Gregory, D., & Scott, R. (2004). Strategic unionism and partnership: Boxing or dancing?. Book of abstracts (p. 135). Isaacs, H. (2011). Evaluation of civil service systems: Case study: Jamaica (no. 2245). Washington, DC: Inter-American Development Bank. Jones, E., & Cruickshank, I. (2004). Forging institutional convergence between Labour Policy & Public Sector Reform: The case of the Ministry of Labour and Social Security, Jamaica. Social and Economic Studies, pp., 53, 89–124. Kelly, J. (1998). Rethinking industrial relations: mobilization, collectivism, and long waves. London: Routledge. Kelly, J. (2004). Social partnership agreements in Britain: Labour cooperation and compliance. Industrial Relations: A Journal of Economy and Society, 43(1), 267–292. Latour, B. (1992). 10: Where are the missing masses? The sociology of a few mundane artefacts. In Shaping technology/building society: Studies in sociotechnical change. Cambridge, MA: MIT press. Latour, B. (1993). We have never been modern. London: Harvester Wheatsheaf. Latour, B. (2005). Reassembling the social  – An introduction to actor-network-­ theory. Oxford: Oxford University Press. Law, J. (1991). Introduction: Monsters, machines and sociotechnical relations. In Law, J., editor, A sociology of monsters, London: Routledge, 1–24. Law, J. (2007). Actor network theory and material semiotics centre for Science Studies, Lancaster University. Disponible en web: http://www.heterogeneities. net/publications/LawANTandMaterialSemioticspdf; www.heterogeneities. net/publications/Law-ANTandMaterialSemiotics.pdf Law, J., & Hassard, J. (1999). Actor network theory and after. Oxford: Blackwell. Lowe, A. (2001). After ANT: An illustrative discussion of the implications for qualitative accounting case research. Accounting, Auditing & Accountability Journal, 14(3), 327–351. doi:10.1108/EUM0000000005519 Lucio, M.  M., & Stuart, M. (2002). Assessing the principles of partnership: Workplace trade union representatives’ attitudes and experiences. Employee Relations, 24(3), 305–320. McCartan, P. (2002). Towards social partnership – Or cooperative industrial relations? Irish Journal of Management.. Dublin: 2002. 23, 1 53. Martinez Lucio, M., & Stuart, M. (2002). Assessing the principles of partnership: Workplace trade union representatives’ attitudes and experiences. Employee Relations, 24(3), 305–320. doi:10.1108/01425450210428462

10  BORN OF CRISIS: THE PUBLIC SECTOR MEMORANDUM… 

261

Mellahi, K., & Wood, G. T. (2004). Variances in social partnership: Towards a sustainable model? International Journal of Social Economics, 31(7), 667–683. doi:10.1108/03068290410540873 Mills, G.  E. (1970). Public administration in the commonwealth Caribbean: Evolution, conflicts and challenges. Social and Economic Studies, 19, 5–25. Mills, G.  E., & Robertson, P. (1990). The attitudes and behaviour of the civil service in Jamaica. Social and Economic Studies, 23(2), 311–343. Munroe, T. (1992, October). The industrial relations culture: Perspectives and change. Paper prepared for the conference of the planning Institute of Jamaica, 30th anniversary. Nolan, P. 1999. Rethinking Industrial Relations: Mobilization, Collectivism and Long Waves, Work, Employment and Society, 13(3), 563–577. Sage publications. https://doi.org/10.1177/0950017099133017 O’Donnell, Rory., & Colm O’Reardon. (1996, May 24–25). Ireland’s experiment in social partnership, 1986–7. Paper prepared for a Cost A7 Workshop, negotiated economic and social governance and European integration, Dublin. Pollitt, C. (2003). Joined-up government: A survey. Political studies review, 1(1), 34–49. Rhodes, R.  A. (1997). Understanding governance: Policy networks, governance, reflexivity and accountability. Buckingham: Open University. Ritzer, G. (Ed.). (2007). The Blackwell encyclopaedia of sociology (Vol. 1479). New York: Blackwell Publishing. Shaikh, M., & Cordello, A. (2006, March). From epistemology to ontology: Challenging the constructed truth of ANT, London School of Economics & political science, working paper series 143. Stadler, F. (1997). More on Bruno Latour. FIS/McLuhan, programme in culture and technology. University of Toronto, Canada. http://www.nettime.org/ Lists-Archives/nettime-l-709/msg00012.html. Accessed 23 July 2010. Stalder, F. (2000). Beyond constructivism: Towards a realistic realism. A review of Bruno Latour’s Pandora’s Hope. The Information Society, 16(3), 245–247. doi:10.1080/01972240050133698 Thomas, P. (2004) “MOU’s Good News. A Significant Achievement For the Country’ Sunday Gleaner, February 22, 2004. p.11. Watson, G. (2007). Actor network theory, after ANT and enactment: Implications for method. http://www.gavan.ca/wp-content/uploads/2007/01/ ANT_comp.pdf Wetherell, M., and Potter, J. (1992). Mapping the language of racism: discourse and the legitimation of Exploitation, Harvester Wheatsheaf, Hemel Hempstead. Williams-Jones, B., & Graham, J. E. (2003). Actor-network theory: A tool to support ethical analysis of commercial genetic testing. New genetics and society, 22(3), 271–296.

CHAPTER 11

The Perfect Storms

Introduction The date June 19, 2003 signalled the official turning of the tides for the then Opposition. The Jamaica Labour Party wrestled the control of the local government from the People’s National Party (PNP) after a tumultuous internal leadership contest that seemed to have been too close to the general elections held on October 16, 2002 to enable the party to gain control of the Parliament. Nevertheless, it managed to obtain approximately 47% of the vote to the PNP’s 52%, leaving party supporters and workers to maintain their efforts towards the next general election (Electoral Office of Jamaica 2002). Regaining the reigns of the local government was a major feat for the Labour Party and a remarkable feat for Bruce Golding, who himself had a tumultuous relationship with the party after its multiple electoral losses since the local government elections of July 29, 1986. The major source of contention were his leadership ambitions, which were violently opposed by Edward Seaga, who continued to feel that he was the best and only leader for the party and was convinced that he had all that was needed to defeat the PNP with or without Golding, who had served as General Secretary and Chairman of the party between 1974 and 1984, and 1984–1995, respectively (Jamaica Information Service 2020). This stance by Seaga would lead to the resignation of Golding in September 1995  in what would become a fatal blow to the party’s fortunes. Golding was a seasoned election winner having drawn his father to an electoral win in 1967 with a significantly lowered margin in © The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5_11

263

264 

C. CLARKE AND C. NELSON

the face of suddenly reconfigured electoral boundaries. Five years later, Golding himself would become the representative of the same seat which he lost four years earlier, after which he prepared the party machinery for a successful contest of the 1980 elections, giving Seaga the opportunity to distinguish himself as Prime Minister (Jamaica Information Service 2020; Thompson 2007). Despite being given four weeks to reconsider his resignation, Golding proceeded and established the National Democratic Movement (NDM) in order to advance his new views and reform proposals for the democratic processes in Jamaica. The NDM, however, would never enable Golding to implement his dreams of becoming Prime Minister and his vision for Jamaica’s democracy. Golding resigned from the NDM in 2001 after the 1997 elections yielded no seats for the party and opted not to contest the local government elections in 1998, but retained his connection with the country’s business as a talk-show host. Unknown to Seaga, a man of extremely deep convictions, which he could not allow to be overlooked, Golding would be the next leader to take the party back to Parliament. By September 2002, Golding had negotiated his way back into the party (Henry 2002) much like he had brought the leadership of St. George’s College to see the error of their ways in excluding them from the first form cohort due to his age (Jamaica Information Service 2020). Although this was too late for the JLP to win the 2002 elections, the leadership change infused other new, young party members who were anxious to make their contributions to national development and who had only known the leadership of the PNP, which was not as successful as intended (see Chaps. 7 and 8). Reportedly, the return of Golding was a demand from the private sector who had helped Seaga’s return as Prime Minister in 1980, and therefore as a leader, looking down the barrel of more and more electoral losses, he knew that there was no other option (Boyne 2010). The return of the ‘new’ Manley had distracted the people from the course laid out by Seaga, who was holding on to the dollar and the social levers to prevent deterioration in the context of the demands of deregulation and liberalization (see Chap. 6). Despite the fact that Manley’s return actually  heralded even deeper liberalization, eventually translating into the financial crisis of the early 1990s and the debt overhang that would cripple public finances for two years, the population would not countenance the return of a Seaga-led government—a fact acknowledged by Seaga himself (Boyne 2010). On a campaign platform advocating the creation of more jobs, cutting out corruption in the public sector and returning to borrowing from the

11  THE PERFECT STORMS 

265

multilateral institutions at far lower rates—in addition to the usual sector project proposals—in 2007, the Labour Party was able to secure a miniscule majority in the Houses of Parliament registering 49.97% of the vote to the PNP’s 49.35% (Electoral Office of Jamaica 2007), ensuring a high level of discipline in attendance and keeping relations in the party as calm as possible. The remarkable nature of this electoral victory was patently obvious from the information presented in Table 11.1, from CaPRI (2007) based on the collation and coding of the information presented in the manifestos of the two parties. Based on the content analysis done by CaPRI, it is clear that from an aggregate position, both parties presented broad platforms with different areas of interest. As expected, the Bruce Golding platform elevated matters of foreign policy, governance and corruption, and economic issues. The PNP had, on the other hand, placed more emphasis on education, crime, family life, energy and the environment and housing and public transportation. Despite these areas of varying emphasis, the Parties appear to have converged nevertheless. CaPRI (2007) indicates that in the areas of reform of the labour market, the Constitution, justice and taxation systems; strengthening the support for small and medium businesses; and the restructuring of investigative and complaints authorities for the police; and improved health care and early childhood education. CaPRI also countered the view that the parties differed in the area of total spending by demonstrating that both parties indicated a similar level of expenditure in their manifestos. So, ultimately, the outcome of the

Table 11.1  2006 Manifesto promises by sectoral area prior to the 2007 elections Area Health Education Crime Economy Family life Governance & corruption Foreign policy Energy & environment Human rights Housing & public transportation

JLP (%)

PNP (%)

11 15 6 15 0 13 10 8 8 14

12 19 7 10 3 8 8 10 6 17

Source: Developed by authors from CaPRI (2007)

Difference (JLP − PNP) −1 −4 −1 +5 −3 +5 +2 −2 +2 −3

266 

C. CLARKE AND C. NELSON

elections turned on the extent to which the leaders and spokespersons of the parties had impressed the voters—this impression was eventually revealed to be very marginal as indicated above. One of the administration’s first policy moves was to actively support the ongoing process associated with the drafting of Vision 2030 Jamaica— the country’s first, long-term development plan which was being designed with a vision to make Jamaica the place of choice to live, work, raise families and do business—by the Planning Institute of Jamaica (2009). Having been part of the process whilst in the Opposition, the JLP administration was familiar with its strategic framework which was consistent with its own political platform. The Plan provided a point of reference, a large set of aspirational goals, objectives and strategies that no political administration could oppose as it was designed to transform Jamaica into a developed country. The major anchor of the Plan was the need to transform the economy from one in which the focus was on the lower forms of capital— natural endowments, man-made and financial—into one where the higher forms—institutional, knowledge, human and cultural—become the bases of economic activity and systems (Planning Institute of Jamaica 2009). The four national goals that form the basis of the Plan demonstrate the interconnectedness of the nation’s ambitions. Over the medium to long-­ term, the prosperity of the Jamaican economy (Goal 3) is predicated on the empowerment of its population to achieve its fullest potential (Goal 1); the achievement of a secure, cohesive and just society (Goal 2); and the preservation of a healthy natural environment (Goal 4). These goals are further aligned to fifteen national outcomes, which are further distilled into multiple national strategies, actions and indicators to monitor progress. The prioritization process leading to the development of the first medium-term framework identified six priority outcomes: (1) security and safety, (2) a stable macroeconomy, (3) strong economic infrastructure, (4) energy security and efficiency, (5) world-class education and training, and (6) effective governance. Golding and his team, cautiously energized by the 2007 win, entered office anxious to (i) provide the population with jobs; (ii) cut out the corruption that they felt hampered the ability of the country to access and leverage its assets and opportunities to achieving their fullest potential; and (iii) most importantly, bring an end to borrowing on the international capital markets at high interest rates that far exceeded the options available from the region’s multilateral institutions. Given the heat of the political campaign, little did the new administration know that its intention of

11  THE PERFECT STORMS 

267

returning to the multilateral institutions and the preparatory entreaties made to ascertain that this return would be viewed favourably by these entities, made it far easier for Jamaica to transit the multiple crises it would be faced with in the coming three years.

Crisis After Crisis After Crisis There was no honeymoon for the new administration. Buried in his first budget speech in April 2008 as the eighth Prime Minister of Jamaica is a reference to the fact that food prices had increased by an unprecedented 45% over the previous nine-month period certainly over the previous five decades—this occurrence would soon morph into the first of the crises that the administration would have to guide the nation through (Table 11.2). Prices of all the major grains had almost doubled over a twoto three-year period and the experts in this area indicated that the causes were linked to more systemic challenges in the world food system which had been distorted by larger food conglomerates (Van Der Ploeg 2010). Wiggins et al. (2010) categorize the multiple causes of presented the nations of the world with the ‘perfect’ storm in which it is impossible to weight or disentangle each effect. They note that whilst these factors may Table 11.2  Contributing factors and the associated impacts of the 2007 and 2008 global food crisis Contributor

Impact

Rising oil prices

Made alternative energy options relatively less expensive increasing the demand for biofuel sources such as maize from the United States Increased the cost of producing cereals which is an energy intensive process Increased demand for cereal foods

Rising energy prices Increased incomes in wealthy countries Trade restrictions imposed on export of grains Ban on rice exports by major rice exports Weather shocks and trade restrictions

Panic among importing countries leading to wide-scale buying Increase in rice prices during 2008 due to the panic created Wheat prices almost doubled

Source: Developed by authors using information presented in Headey and Fan (2010)

268 

C. CLARKE AND C. NELSON

never occur again simultaneously they warn that climate change will result in higher prices which might become a more common phenomenon as harvests will become more variable without deliberate, dedicated efforts to address these potential fluctuations. Globally, governments of the affected countries scrambled to assess and put plans in place to address their food security. The G-24 prepared an analysis that associated the level of food insecurity was linked to overall reductions in productivity in the agriculture sector (Mittal 2009). Drawing on the findings of the World Development Report of 2008, which focused on agriculture for development, Mittal (2009) pointed out that this decline could be traced back to the World Bank’s deregulation and liberalization drive of the 1990s which required developing countries to terminate government participation in the marketing of agricultural products, as was undertaken  by entities such as Jamaica’s Agricultural Marketing Company. This aligned with the elimination of subsidies on inputs used in agriculture and on final food items, the extension of credit specially designed for the sector and the marginalizing of the various entities that dealt with agricultural commodities in favour of market mechanisms. Rural bank branches were closed as part of financial liberalization, which Mittal (2009) reports, was found to lead to an urban bias in financial entities with rural savings  being used to fund urban-oriented credit needs, based on Chowdhury (2002). Despite their challenges and inefficiencies, the removal of the commodity boards reduced the availability of national oversight of the stock of food  and compromised farmer incomes. Smoothing out of fluctuations in the market and redistributing food from surplus areas to those without, compromised the ability of countries to develop and sustain even the most basic level of food security. The pure market-based approach to the agriculture sector has not yielded any significant results—there has been no rush by the private sector to take up the roles absconded by the government as has happened in tourism or the financial sector; as a result, there has been very little growth or stability and innovation in the sector. What the private sector has done is engaged in the importation of cheap foodstuff upon the removal of agricultural tariffs which was part of the trend in developing countries thereby losing control over the flow of agricultural imports (Mittal 2009). Simultaneously, developing country agricultural sectors have not been able to transition from the production of their colonial produce—there has been no success with restructuring and diversifying their product mix. By 2013, Jamaica would publish its Food and Nutrition Security Policy as a joint work of the

11  THE PERFECT STORMS 

269

Ministry of Agriculture and Fisheries and the Ministry of Health, which noted that the high prices of 2008 were surpassed by the prices prevailing at the point of publicizing the Policy,  forcing the country to consider objectively its heavy dependence on imported food products. Whilst the government, just like other developing country governments was struggling to maintain social stability in the face of these escalating food prices and riots in protest against these increases (CNN 2008), it had to live up to its promises made to the three professional groups that comprise 60% of the public sector. On the road to the electoral win of 2007, Audley Shaw who would be the nation’s Minister of Finance had committed to the teachers to take a serious look at how their salaries compared with the salaries of teachers in private schools and to pay them at 80% of market. This promise stirred the medical fraternity particularly the nurses and indirectly the members of the armed forces to put their respective claims forward to the government. The relevant representative bodies were only too happy to present their claim to the Minister early in his tenure and the teachers were the first out of the blocks. Recognizing that this was not a campaign promise that would be forgotten given to the previous administrative setting of wages and other benefits for these groups under the MOU (see Chap. 8 and Nelson 2019), Shaw quickly assigned the resolution of the matter to his colleague Minister Dwight Nelson—a seasoned, shrewd and effective trade unionist. Mindful of the emergent challenges and the constraints on public finances due to the large debt overhang, Nelson quickly patterned his approach to these issues on the MOU processes earlier in the decade and assembled a group of the relevant representatives across the public sector to begin the discussions and negotiations with the most powerful union in the country—the Jamaica Teachers’ Association (JTA). Despite the enormity of the demands being made by the 20,000-­member-strong JTA, the government could only use the internal processes of the Ministry to properly programme the payment of increases that were to be implemented after the completion of a reclassification exercise in phases. As soon as the deal was inked, the nurses presented their demands and what they lacked in numbers their leader made up for in fire—storming out of negotiations with the Minister after no payments were forthcoming. Minister Shaw pleaded for prudence but the groups held the upper hand in the negotiations leveraging the tightrope that the administration had to juggle regular operations.

270 

C. CLARKE AND C. NELSON

Just when there seemed to be peace on the industrial relations front, another crack emerged in the global landscape that held uncertain outcomes for the Jamaican economy and would require proactive and pragmatic leadership to navigate. Ill-designed incentive mechanisms in the mortgage loan sector prompted mortgage lenders to alter the traditional mortgage payment schedules in order to enable a larger number of persons to qualify based on the early years of repayment for mortgages that would eventually upend their solvency as the delayed portions of premium started to become due plus interest. The financial and economic engineers at the corporate level started repackaging these loans as supposed assets that were then valued and sold multiple times through the US and global financial markets. As attempts were made to liquidate these assets, the subprime nature of these mortgages became apparent and started a domino effect that in turn spread contagion throughout the global financial system and shutdown credit within the economy as balance sheet health became questionable given the inability to put a nonzero valuation of a wide range of assets. Trust and credibility, the main currency of the financial sector, dried up overnight and interbank business came to a halt (Elliott 2011). All the monetary firepower available to the Federal Reserve and other major central banks could not prevent this multi-year race to the bottom in the financial and real estate sectors and despite the implementation of the Economic Stimulus Act and the Housing and Economic Recovery Act of 2008 in February and July, by September 2008 the size of the iceberg below the water level became more and more obvious when both Fannie Mae and Freddie Mac had to be taken over by the US federal government and Lehman Brothers had to declare bankruptcy whilst Merrill Lynch was purchased by the Bank of America. Whilst scholars disagreed regarding the precise reason for the build-up of financial slows in the financial sector during this time, the United States commissioned a deep study of the origins of the crisis. The National Commission on the Causes of the Financial and Economic Crisis in the Unites States presented a lengthy report on the matter coming to multiple conclusions chief of which is that the crisis could have been avoided had those at the helm of the financial institutions and those who regulate them (i) recognized the warning signs that included the unsustainably large housing boom supported by very predatory lending and the steep increase in household mortgage debt not associated with any national change in policy; (ii) interrogated the risks that were presenting themselves in the system; and (iii) acted to contain the spread of the decline throughout the

11  THE PERFECT STORMS 

271

system (The Financial Crisis Inquiry Commission 2011). The gaps in the regulatory framework associated with the deregulation of the sector resulted in blind spots throughout the industry that perhaps contributed to an inability to see the system as a whole and for regulators to respond. The Commission reported the $2.7 billion in lobbying efforts by the sector to enable the reduction of regulatory oversight of the sector in the nine years leading up to the crisis. Where the regulators failed, so too did internal governance mechanisms as the large nature of the transactions and the availability of financial models reduced the exercise of management prudence and judgement in the analysis of these types of assets which was further compromised by incentive structures that rewarded short-­ term gain and did not consider the long-term implications of multi-billion dollar decisions that could cripple the institution and the system at any time. Households and firms were unsustainably leveraged and government regulators were blind and unprepared to intervene given the lack of information that would allow forecasts of the looming problem. The good news was that food prices that had spiked in 2007 were receding (Elliott 2011). Jamaica’s financial sector crisis of 1995 had, a decade earlier, reinforced the structure, strength and oversight of regulators and supervisors of the system, and perhaps overly restrictive rules had been implemented that would have prevented financial institutions in Jamaica from entering into many of the types of transactions that brought down the global financial sector and economies. Nevertheless, Jamaica—a small country with an open economy—was unable to escape the impact of the crisis as the shutdown of financing, closure and temporary management of financial institutions previously thought of as being ‘too big to fail’, large growth in home foreclosures and job losses negatively impacted Jamaica through large reductions in tourism expenditure and numbers which had to be stimulated by heavy discounting and bundling to keep room utilization at a minimum level. Remittances from Jamaicans in the diaspora also declined as they suffered from job losses and/or uncertainty (Grigorian et  al. 2012). As global bauxite and alumina prices plummeted, the sector began to close less profitable mining operations like Jamaica, which created job and income losses which spread to the construction and other allied sectors. As the domestic sector began to shutdown, government revenues from the bauxite levy plummeted from J$5 billion in FY2007–2008 to J$255 million in FY2008–2009 in comparison to the projected J$8.6 billion (Business Gleaner 2011; Grigorian et  al. 2012). This was a major

272 

C. CLARKE AND C. NELSON

blow as UC Rusal, the major player, had been granted a waiver of the levy in the year prior and now was mothballing its plants in Jamaica. Reduced foreign exchange inflows due to reduced demand for Jamaica’s exports, reduced tax flows from both the bauxite levy and payroll taxes combined with the large increases in the public sector wage bill and contingent obligations and the potential for significant increases in unemployment and poverty spelt disaster unless the government was to secure support externally. The pre-existing debt-burdens that compromised fiscal space through the large flows required to service same, inflation fuelled by both higher oil and food prices, legacy public bodies that exerted large pressures on the fiscal accounts, inter alia, combined with the impact of the global financial crisis on domestic economic activity meant the government would require support. Given the authority’s expressed intention to re-engage the World Bank and the Inter-American Development Bank, the only option available for the balance of payments support needed by Jamaica was a return to the International Monetary Fund (IMF) more than a decade after then Minister of Finance and Prime Minister Patterson declared ‘ta-taa’ to the IMF.

Political Crisis and the Return to the IMF During the swirling concerns about the fallout from the global financial crisis in the United States and the preoccupation with the sources that could be accessed by Jamaica to navigate these choppy seas, there was nervous tension about a return to the feared IMF. Despite the perception that some Jamaicans might have held that the IMF was out to control and destroy the economies of developing countries, the IMF had been introspecting to identify the reasons why they were held in such wide disregard as part of their attempt to find renewed relevance in the post-structural adjustment period (see Chap. 4 for discussion). Beyond Jamaica, a wide range of progressive elements in the so called third world was convinced that the IMF was wicked and only served the interests of developed countries. Following the well-publicized breakdown of the relationship between Jamaica and the IMF in the 1970s the Fund sat down with stakeholders at headquarters to deconstruct what had happened to cause such a sour experience with the authorities. Devlin (1981) reports that the failure of the 1970s programme with Jamaica was bruising as it was felt that the country’s problems could indeed have been solved however the IMF could not generate the funds

11  THE PERFECT STORMS 

273

that were required to support the programme especially in the context of the scale of the adjustment and by the time the Fund Staff and the authorities were in agreement with each other, it was time to prepare for a general election and the crisis had, by then, exceeded Jamaica’s capacity to manage and correct. The Fund only aggravated an already tense and polarized political landscape without adding any significant relief. In response, Devlin (1981) suggested that the IMF restructure its internal operation in preparation for the challenges that it would face in the 1980s. He suggested that the entity must have more resources at its disposal as it cannot afford reputationally to be a marginal source of financing and be a lender of last resort. The scope of the recommended programme needs to adjust to facilitate public sector investments if there is no sign of risk taking by the private sector or if this risk taking will take too long to materialize. IMF programmes, must also be more growth oriented whilst seeking to implement adjustment. Finally, the image of the Fund has to be redesigned in a manner that causes countries to engage with the institution far earlier to reduce the scale of the adjustment that its citizens have to participate in. Boyne (2009) indicates that the IMF had indeed refreshed its image— it was not the same IMF of the 1970s. He notes that the IMF itself has reported allowing some 80% of IMF programmes Africa to run larger fiscal deficits and Boyne acknowledges that some of the things recommended by the IMF are things that are growth enhancing or pre-requisites and therefore must be done. Boyne also reports that the IMF has been adopting a stance that priority should be given to expanding the social safety net in order to reduce the impact of the adjustment on the poor. He admonishes leaders that to resist engaging the IMF would be unwise in the context of the crisis and a reformed IMF. Whilst Spencer (2009) remains of the view, despite referencing the perspective presented by Boyne, that it is impossible for persons to think of the IMF with any positive outcomes; the prevailing view in the population is that the IMF is not the villain it was made out to be and, in fact, even in the case of Jamaica, Clarke (2009) indicates that growth under the IMF was five times greater than after we said ‘ta-taa’; therefore, he claims the trepidation that is being transmitted to the population is unjustified and expresses his hope that Jamaica will stay the course with the Fund until we arrive at the destination. On January 15, 2010, Jamaica published its Letter of Intent to enter into a twenty-seven-month Stand-by Arrangement (SBA) for 300% of its quota of US$ 1.3 billion with the IMF against the backdrop of low growth,

274 

C. CLARKE AND C. NELSON

high debt and high debt servicing, which precluded the government from implementing any significant, sustainable counter-cyclical fiscal policies to stem the impact of the global financial and economic crisis that, up to that date, was still rippling across the globe (International Monetary Fund 2010a). When the news of this pending approval was telegraphed to the market, there were reports that the domestic financial markets had become stable (Editorial 2009). Table 11.3 presents the stark reality of the economic decline experienced between the 2008 Article IV Consultation (International Monetary Fund 2008) and the 2010 twenty-seven-month SBA Agreement (International Monetary Fund 2010a, b). Economic growth and the public sector and public body deficits registered significant declines amidst some improvement in inflation given the reversal of the volatile and extraordinarily high global commodity prices. Table 11.4 presents the prior actions and structural benchmarks agreed upon with the Fund over the first year of the agreement as the authorities attempted to stave off continued decline of the economy. The programme, in recognition of the long-standing nature of the problems facing the Jamaican economy since the 1980s although not the responsibility of this administration, was designed to be frontloaded requiring the implementation of the largest and most painful, technically simple items using effective policy levers. The first review of the 2010 SBA was positive in its assessment of the progress under the programme, as the authorities had implemented all agreed targets except the public employment and compensation reform commitment, which both parties agreed would require a more comprehensive programme of work that would need to be properly scoped in order to determine a better timeline and implementation modalities. The Staff noted that the programme had not accounted for the costs associated with the divestment process and the authorities recognized the need to adjust capital spending and rationalize the planned road rehabilitation project with the new targets under the SBA (International Monetary Fund 2010a). The fiscal programme was to be further bolstered through: (i) the strengthening of sanctions for non-compliance with the principles of the Fiscal Responsibility Framework; (ii) explicit prohibition of deferred financing; (iii) ensuring that there is internal consistency between the medium-term fiscal strategy and the annual budget; and (iv) a comprehensive audit of tax incentives that had proliferated across the system. The Jamaica Debt Exchange (JDX) the first of two restructuring exercises, was designed to secure interest savings of 3% of GDP in on fiscal year

Context

Reliance on domestic financial system for government needs plus impact of 1990s financial system debt led to 134% debt to GDP and increased systemic risk

Potential for deteriorated external environment to impact budget—falloff from tourism and bauxite. Possibility of re-pricing of debt

Sharp falloff of reserves

(continued)

Public sector deficit declined to 9.5% in FY2008–2009, expected to reach 12.75% in FY2009–2019 Interest expenses increased by 38% due to depreciation in the exchange rate and increases in the interest rate Public body deficits stood at 3% of GDP due to rising and accumulated losses of Air Jamaica and Clarendon alumina partners

Unregulated investment schemes promising implausibly high returns in excess of 10% per month have proliferated

Real GDP growth −1.6 for FY2008–2009 and −3% for FY2009–2010 Associated with 60% reduction in bauxite exports, 33% reduction in remittances with negative impacts on bauxite exports and the slowdown in tourism Inflation 9% November 2009 reflecting subsiding global commodity prices

Developments

2010 27-month SBA Agreementb

Inflation 18% due to food and fuel prices

Real GDP growth 1% FY2007–2008

2008 Article IVa

Table 11.3  Economic context and developments in Jamaica—2008 and 2010

11  THE PERFECT STORMS 

275

Deterioration of economic prospects and unsustainability of the public debt

Restore macroeconomic stability and create conditions for growth Put the public-debt-to-GDP ratio firmly on a downward trajectory, Entrench fiscal discipline and accountability, Significantly raise real GDP growth rates Ambitious fiscal consolidation to streamline expenditure, effect public sector reform particularly through the divestment of non-core public bodies Development and implementation of a comprehensive debt management strategy to address the debt overhang Reform of the financial system to strengthen the financial system Bring and maintain inflation at single digits whilst maintain exchange rate flexibility Enhanced social safety net to safeguard the poor through increased allocations and broadening of the programme

Issues

Medium-term programme Programme goals

Key pillars

Issue

Source: Developed by authors from information provided in aInternational Monetary Fund (2008) and bInternational Monetary Fund (2010b)

The Staff note the ambitious fiscal stance and Additional suggested that they be further elaborated. Attention measures should continue to be paid to the financial sector

Generating growth—forecasted pick up to 2.75% in 2008. Needed more structural reform and debt reduction to be sustainable which could increase growth to 3.5% Reducing debt—planned balanced budget and a debt-to-GDP ratio of 100% by 2013 Recommended monetary and exchange rate policy in the context of weak external economic amidst heightened financial volatility. Needed control over off-budget expenditures inclusive of the public bodies Can financial risks be contained in Jamaica? This was the subject of technical assistance from the fund with a view to tightening the regulatory framework which revealed a weak framework due to the absence of data and information on external borrowings that could potentially become subject to margin calls in the context of the ongoing global financial crisis

2010 27-month SBA Agreementb

2008 Article IVa

Table 11.3  (continued)

276  C. CLARKE AND C. NELSON

11  THE PERFECT STORMS 

277

Table 11.4  Agreed prior actions and benchmark conditionalities required before enactment of the 2010 twenty-seven-month stand-by with the IMF Measure

Conditionality

Government finances Adopt a tax policy Prior action package yielding around 2% of GDP Public debt management Launch and complete Prior action debt exchange operation for 3% GDP Public entities Reach agreement on Prior action divestment of Air Jamaica by June 2010 Institutional fiscal reform Complete a time Benchmark bound plan to establish a CTMS by end-2010 Pass a fiscal Benchmark responsibility framework and accompanying legislative amendments Design a public Benchmark employment and compensation reform Financial sector reform Review and revise BOJ Benchmark concept paper for omnibus banking law Draft a concept paper Benchmark for unregulated financial organizations Introduce a temporary Benchmark freeze on new licenses for securities dealers whose models are based on repos

Timing

Status

December 2009

Completed (before signing of agreement

January 2010

Completed (before signing of agreement)

January 2010

Completed (before signing of agreement

June 2010

March 2010

Complete (first review)

Dec 2010

Delayed

Mar 2010

Completed (first review)

June 2010

Feb 2010

Completed (first review)

Source: Compiled by authors from International Monetary Fund (2010b)

278 

C. CLARKE AND C. NELSON

and rearrange the maturity profile of the government’s debt instruments that were expected to mature in the next three fiscal years, in a bid to reduce the amount of debt maturing by 65%, whilst preserving the stability of the financial system (Langrin 2013). The debt exchange had to be implemented in the weeks before the Board meeting at which the IMF was to approve the request for the country’s SBA. On analysis of the types of instruments and the holders of the debt, it was clear that debt forgiveness would present a death knell to current and future pensioners, the domestic financial system, the economic programme, not to mention the viability of the government. Both the domestic and external debt was largely held by persons and institutions domiciled in Jamaica. It was therefore in the interests of the holders of the debt, the institutions whose balance sheets these debts were on, the fiscal authorities—with the obligation to honour the debt as required by the Jamaican Constitution—and many generations to come, that there was an orderly restructuring of the debt and its repayment. The Fund Staff provided technical assistance to support this process and the authorities took advantage of the opportunity presented by the exchange to digitize its debt issuance and management processes as well as to train a large number of public sector workers in debt sustainability. Critical to the success of the exchange, also, was the fact that the JDX was a central part of the country’s strategic programme and not merely a desired financial transaction (Langrin 2013). Without the JDX, the government would have no fiscal space to implement its development agenda and private sector activity would continue to be crowded out by the government’s insatiable demand for debt which was causing interest rates to climb (Johnston and Montecino 2011; Schmid 2016). Without the JDX being fully subscribed at 100%, the IMF agreement would most certainly not be approved by the Board, taking with it the much anticipated development and policy based support from the World Bank and the IDB. The government selected the major bondholders as sponsors for the transaction to the private sector in order to ensure that there were no difficulties with participation as bondholders would feel free to openly discuss matters amongst their peers. In addition to the smaller, more technical meetings, the social partnership—which earlier assisted the government in navigating public sector wage negotiations—played a key role in the presentation of the critical importance of the acceptance and to engender full participation of the entire population—public and private sector—whose long-term economic viability was at stake. This idea of social partnership

11  THE PERFECT STORMS 

279

Table 11.5  Programme timelines—agreement and review dates—for the 2010 Stand-by Agreement (SBA) Date

Millions of SDR

Percent of quota

Conditions

Achieved

Feb 4, 2010

414.3

151.5

Yes

May 31, 63.7 2010 Aug 31, 32.0 2010 Nov 30, 31.9 2010 Feb 28, 127.5 2011 May 31, 31.9 2011 Aug 31, 31.9 2011 Nov 30, 31.9 2011 Feb 28, 55.5 2012 Total 820.5

23.3

Approval of arrangement which was contingent on the completion of prior actions (see Table 11.4) First review and end-March 2010 performance criteria Second review and end-June 2010 performance criteria Third review and end-Sept 2010 performance criteria Fourth review and end-Dec 2010 performance criteria Fifth review and end-Mar 2011 performance criteria Sixth review and end-June 2011 performance criteria Seventh review and end-September 2011 performance criteria Eighth review and end Dec 2011 performance criteria

11.7 11.7 46.6 11.7 11.7 11.7 20.3

Yes Yes Yes

300.0

Source: Compiled by Authors from International Monetary Fund (2010a, b, 2011)

or a social contract has been advanced by various stakeholders as Jamaica had experienced success through this mechanism in the form of the Public Sector Memorandum of Understanding (MOU) monitoring committee in the past (Taylor, 2008). At this point, the leadership of the partnership was headed by the Prime Minister and its membership broadened to include every private sector association, a far diverse range of civil society groups, all trade unions and a variety of other stakeholders in order to ensure a wide societal  understanding  and appreciation of the problem, the details and impacts of the transaction as well as the conditionalities associated with the policy and development loans from the IDB and the World Bank (Table 11.5). Minister Shaw and the economic team at the Bank of Jamaica were provided US$950 million of financial firepower in the form of the Financial System Support Fund (FSSF) funded jointly by the IMF, World Bank and IDB in the event that—despite the rigour of the stress testing applied to

280 

C. CLARKE AND C. NELSON

the system to assess its susceptibility to market risks—there was deep and widespread need to support domestic financial institutions with liquidity—but this liquidity would only be available if an institution participated in the JDX and exchanged in excess of 90% of their debt holdings (see Grigorian et  al. (2012) for details on the transaction). The FSSF was viewed as an important ‘carrot’ and was of critical importance to non-bank institutions in the event of a liquidity problem since they were not privy to this type of support from the Bank of Jamaica (Grigorian et al. 2012). Jamaica’s crime problem has largely surrounded the increasing numbers of violent crime—particularly in terms of the number of homicides and the small island with a population of just under three million people is consistently ranked in the top five or six in the world in terms of homicides per capita. Violent crime increased intermittently during the 1980 elections during which more than 800 persons were killed in a series of ­confrontations between supporters of the opposing parties (Arias 2013). The ballooning of violent crimes has been associated with the social and economic impacts as well as  with the quick pace of deregulation and ­liberalization under the Structural Adjustment period of 1980–1999 (see Chaps. 4 and 5 for discussions of this period) (Jaffe 2012). The availability of a large number of unemployed persons and the recent experience with electoral related violence, provided the weaponry, that precipitated the development  of natural leaders who, on  becoming  gang related neighbourhood leaders, would become associated with criminal organizations. Electoral reforms to improve the integrity of the ballot, the deployment of international observers during elections and reforms to the police service, played important roles in restructuring the format of criminal organizations after the violent 1993 elections. The result of these reforms was a reduction in the benefit accruing to the criminal gangs affiliated with political parties from political parties themselves, leading to a further drifting of the criminal organizations away from the political environment. With the emergence of the ‘drug for guns’ trade and the expansion of transnational criminal activity in the Latin America and Caribbean region, enabled a further separation and the independence of these groups from the political parties and, therefore, further enhanced their networking and entrenchment within criminal organizations as these networking opportunities provided access to streams of income along with access to weapons (Arias 2013). In August 2009, a request was transmitted by the US government for the extradition of an alleged criminal mastermind who was said to be the head of an international criminal organization, a local holder of power in a strong political garrison and a construction contractor (Commission of

11  THE PERFECT STORMS 

281

Enquiry into the Extradition Request for Christopher Coke 2011). For the request to be granted, an operation would be jointly organized between the Jamaican justice system and security forces to grant, secure and support the location, retrieval and delivery of the named Mr. Coke. This matter mushroomed into a political crisis, turning on the relevance of questions regarding the constitutionality of the request from the United States and the breaches it could pose to the laws of Jamaica. The delay in this matter extended for months and popular opinion was that this was an attempt to protect the ruling party’s interests and not a substantive objection to the request. This matter consumed the political capital that the administration had built up in early 2010 with the success of  Jamaica’s return to the IMF and the ‘take up’ of the debt exchange. The non-­ government members of the Social Partnership, a multi-partite structure that was a source of support, credibility and which enabled the building of well-needed social capital, withdrew from the Partnership when Prime Minister Golding on May 11, 2010 finally confessed to having knowledge of the engagement of the US law firm, Manatt, Phelps and Phillips. This occurred after months of denying knowledge of  engagement and the claiming to have acted as party leader, whilst the question was being asked of him in his capacity as Prime Minister (Luton 2010). The optics for the Prime Minister significantly reduced the standing of the administration, as Mr. Coke was based in the Prime Minister’s constituency. An incursion in to the constituency of Tivoli Gardens was executed on May 24, 2010 as the Prime Minister had instructed the Minister of Justice to sign the extradition order. These efforts failed, as Mr. Coke was not in Tivoli Gardens, nevertheless, government reports on the intervention indicate that the operation resulted in seventy-three casualties. A month later, Mr. Coke was intercepted, supposedly on his way to the US Embassy to turn himself in there as against to local authorities. Jamaican history recalls the experience of Lester Lloyd Coke, his father, dying in jail under suspected circumstances also, whilst awaiting extradiction, thereby his reluctance to being put in a Jamaican jail. Subsequent to calling of a state of emergency in May 2010 and the joint military and police incursion into Tivoli which resulted in several lives being lost, the Prime Minister was forced to dispatch the Public Defender and the generally respected Bishop Herro Blair to assess the state of affairs in Tivoli in response to allegations of misconduct and murder  in the aftermath. The calls for accountability were unrelenting, as were those calling for the establishment of a Commission of Enquiry, which was established and had its first meeting on December 6, 2010 (Commission of Enquiry into the Extradition Request for Christopher Coke 2011).

282 

C. CLARKE AND C. NELSON

The risks associated with the extradition process, had been  risks that had been highlighted in the review of the March quarter which were ultimately  realized. Despite this, the review of the June quarter indicated resilience to the events that had  unfolded in West Kingston that were driven by the extensive targeted efforts of the tourism players to emphasize the localization of the problem to Kingston—worlds away from the tourism resorts and attractions. Programme slippage however, relating to the missed CTMS benchmark was also recorded (International Monetary Fund 2010a) including three critical fiscal risks identified as relating to public sector salary disputes, absence of costing of the public sector rationalization plan and the need for a strategy to scale back the existing range of tax incentives. Nevertheless, the Fund indicated a willingness to consider flexibility in the fiscal targets. The third and what would be the final, of eight scheduled reviews of the 2010 SBA for the September quarter, ushered in the negative news. GDP had declined by 0.5% and Tropical Storm Nicole had caused damage to the tune of 1.7% of GDP (International Monetary Fund 2011). More importantly—two (2) structural benchmarks relating to debt were not met and the authorities were forced to request a relaxation of the fiscal targets to the tune of 0.2% of GDP. Spending and reform slippages were looming due to weaknesses in expenditure management and capacity issues, while the government attempted to quell the fears through the collection and collation of expenditure commitments on a monthly basis and the promulgation of new regulations to improve accountability. Although the authorities presented immediate measures to stem the problem, inclusive of: (1) the postponement of the Palisadoes project; (2) reductions in travel, training and advertising; (3) a 60% reduction in non-­ humanitarian discretionary tax waivers and sundry tax measures; the Fund Staff was not convinced. The Review noted the ‘one-off’ and low quality nature of these efforts and reiterated the need to properly design, then rapidly and robustly implement structural reforms to secure longer terms savings and efficiencies. The authorities agreed to the need to tighten the processes surrounding public investment and intensify efforts to divest Clarendon Aluminium Partners. A wage freeze was announced through to FY2011–2012 whilst facilitating back payments. The Fund Staff expressed the view that the slippages represent wasted social and political capital after the incredible feat accomplished in the outset, by the government in returning to the Fund, resetting the debt profile and interest payment, as well as  increasing coherence and cohesiveness in government.

11  THE PERFECT STORMS 

283

Conclusions Bruce Golding defied many odds to become Prime Minister of Jamaica and within four years became the first sitting Prime Minister to resign after a single term in office (The Jamaica Observer 2011). The man who could not be prevented from becoming leader of the JLP is thought to have painted himself out of office, ironically, through the very channel he had absolved to correct in the Jamaican landscape—the conduct of public officials and, perhaps, the improper use of political power for party gains. Golding was resolute when he submitted his resignation to the party, given the damage caused to the viability of the administration due to the effect of the crisis on the party, which  was irreparable with him at the helm. Despite the handling of the double crises by the administration that he led, the party was no longer viable with him as leader and the nation was still in disbelief about his actions, despite their overall effectiveness of reducing the country’s murder rate by 40% albeit in the context of a joint police and  military intervention which left 73 fatalities (The Economist 2011). The country emerged from these storms without descending into a full fledged  crisis, emerging from both with low inflation, a stable exchange rate, healthy net international reserves and incremental stability in macroeconomic indicators, a few years into the global economic and financial crisis. A key platform promise—jobs, jobs, jobs—however could not be delivered on, due to the uncertainties associated with the crisis, nevertheless attempts were made to circumvent this by the administration (Chaplin 2011). According to The Economist (2011)  ‘Jamaica’s most successful leader in decades’, having tamed the debt monster, providing fiscal space, the scarcest commodity until then; maintaining growth in tourist numbers in partnership with his affable Minister of Tourism; and the only leader with the gumption to return to the IMF amidst a turbulent world economy triggered intro recession by the avoidable financial crisis (The Financial Crisis Inquiry Commission 2011)—had no option but to resign as Prime Minister and appoint his own successor. The crisis reinforced the need for wide and deep powers and oversight for regulators inclusive of data provision and investment decisions (Chen et al. 2019). The IMF returned with a US$1.3-billion twenty-seven-­month SBA to support the authorities in coping with the effects of the financial crisis on the real economy, by forcing a focus on the long-­standing structural impediments, that the crisis presented an opportune time to correct. The authorities were commended for their efforts and achievements in

284 

C. CLARKE AND C. NELSON

categorically restructuring the debt—a major stranglehold placed on the economy and the fiscal ability to address the ever-expanding social needs of the population. Despite a glitch in the interpretation of the JDX as being a ‘distressed’ exchange by Fitch and Standard & Poor’s—an error which was quickly corrected after the IMF’s board approved the SBA to ratings that exceeded those pre-JDX—there was widespread acknowledgement of the success of the programme and the loosening of the long-­standing constraints on the government’s ability to implement programmes and policies that can enhance the productivity and scope of the private sector. This, however, would not fully solve the problem facing the country in relation to the debt. Within a year-and-a-half, despite the significance and scale of the efforts in 2010 which yielded a 99.2% participation rate, lengthened debt maturities and saved amortization costs of J$300 billion, the debt-toGDP ratio started to approach 140% again (Grigorian et  al. 2012; Birchwood and Goto 2011). Political distractions have thus far overshadowed the national journey to economic development and growth. Could it be that Jamaica’s relationship with the IMF since Independence was nothing but the residual of its struggle between two political parties an emergent middle and upper classes eager to firmly establish themselves in society; new tertiary graduates who had been heavily exposed if not indoctrinated in these ideas of socialism, communism, self-governance and self-reliance and the poor masses who were not adequately empowered in the broadest ways possible that would enable them to be immune to the political hustings and allure of everyone sharing with each other to get something out of this life? Alignment to an ideology that takes from the rich to make the poor feel better was the easiest route for the disenfranchised. The lofty but disillusioned ‘commanding heights’ philosophy was also another alluring slogan that sounded enticing but was almost impossible to implement on a wide scale and sustained basis given (a) the embryonic nature of the domestic and international financial sector a dozen years after political independence and (b) the extremely concentrated economy in agriculture and the public sector, so that agriculture at the time, was the ‘go-to’ sector, so it continued to employ the majority of the available labour force. The issue was the very low level of investment and therefore returns to investment in the form of earnings and the potential to create wealth for the average worker in agriculture, in contrast to the larger farms and aggregators with access to international markets. Without substantial real resources from external markets on extremely generous concessionary bases, it would be

11  THE PERFECT STORMS 

285

impossible for subsistence farmers to transition to controlling the so-called commanding heights. This language, though emotionally appealing and aspirational on the surface, was at odds with the capacity of the domestic economy to enable and sustain such transformation. Without significant government, corporate or other support in terms of real resources or the ingredients for innovation, expansion, management, packaging and processing expertise, the export of basic commodities and produce was doomed, given that other such producers received significant support. Foreign owners of capital were impossible to attract and retain based on the vitriol and other forms of hostility towards capitalists furthering difficulties to even attract domestic investors at the time. When you read through the digital news media archives through to the 1990s, it is abundantly clear that Jamaican thought makers and opinion writers were well aware of the prescriptions of the IMF. Writers were sharp in pointing out dissonance between the political rhetoric and the information that the government itself promulgated previously. Over the three decades since the country actively sought and received various forms of support and subsequently treated same with a high level of disdain in several cases, there was clearly an important role for the Fund in the case of Jamaica. The almost prescriptive nature of the Fund’s programmes was reflective of the basic economic equations and principles which if pragmatically assessed, would likely have led similar external international, financial and economic institutions to make the same recommendations. Whilst several academics and the policy directorate could and did correctly identify the likely low success of the outcomes of these recommendations and the apparent repetition of the failures over the past three  years, these experts were unable to successfully draft and codify a credible public policy alternative, which by definition would not only be technically correct but would also have passed the people’s test and therefore pass the political test and be implementable. Whilst there might have very well been various permutations of alternatives being developed and presented at various levels and to various entities in government it is not very evident from the records accessed that these proposals were developed to the point where they were accepted as being politically viable policy proposals. The embryonic nature of the society and economy and the very low levels of development preceding the well intentioned though eventually unsustainable bauxite-driven, fiscal expansionary programmes (which when thwarted resulted in heightened

286 

C. CLARKE AND C. NELSON

political vitriol and scare tactics towards capital) meant that the production cycle needed to drive robust fiscal inflows and support social and capital expenditures, without which, developmental efforts would be further thwarted. In hindsight, beyond these criticisms, these minds could have served to develop positions that would enable and enhance as much as possible, social and other protection mechanisms of vulnerable groups and engagement of the private sector, whilst encouraging their involvement in building the social fabric, social capital and institutions required to galvanize political independence and convert it into individual advancement, community development and national development. Growth as far as the Fund was concerned was fully dependent on the development of competitive markets at both the national and global levels. Trade, therefore, had to be uninhibited and therefore the GATT was critical in enabling trade and thereby enabling the clearing of markets. The short-term nature of IMF interventions in any country cannot be over-emphasized. In terms of the interventions, the IMF did not see itself as a long-term partner. Regardless, the prescriptions of the Fund ought not to contravene the possibilities of national prosperity. The Fund’s goal was competitive markets, no state intervention and supporting private enterprise. The Fund vies budget deficits as an indicator of negative government operations that they then have to hold the government accountable for, to correct the issues in order to return to a growth path. In addition to these structural issues, there has been a continuous struggle with natural hazards such as plant and animal diseases, variations in weather conditions, coupled with the marketing and distribution challenges that have combined, to continually threaten the economic viability of many small farming operations. The impact whenever these risks materialized and the structural deficiencies of the sector, reduced the extent to which wealth could be created or sustained and therefore the likelihood of continued investments and the application of technology in the operations of the sector. Government intervention was continually required to support recovery resulting in fiscal slippages. Ultimately, although social indicators would have improved significantly since Independence, the economic fortunes of the country had not, up to this point, been resilient enough to support sustained and widespread improvement in the standard of living for the majority of Jamaicans. Jamaica’s development has been jeopardized by the nexus between poverty levels, high and rising violent crimes, inefficiency of the bureaucracy,

11  THE PERFECT STORMS 

287

low productivity levels and the ineffectiveness in the education system which reflects the fact that only 30% of the population has any form of education or training certificate which combined to make the economy uncompetitive. These issues have, over time, become intertwined with the political economy as the five-year electoral cycle had shortened the timeframe within which national planning and the implementation of projects and programmes nationally was organized. Though major progress had been made in the area of debt restructuring, public body reforms in the context of a wider public sector reform and fiscal responsibility had stymied as the administration appeared to have run out of steam and had disengaged from the scheduled reviews prematurely. Would Jamaica navigate the storms presented by the various crises it faced? Would there be a return to debt-to-GDP rates of 140% or would it even get worse? How would these outcomes be impacted by the likely change in the political administration? Would a PNP government return to its deficit financing approach if returned to office, and if so, how would the financial markets respond? To what extent would there be continuity or disruptions? Will it still be possible to make Jamaica the place of choice to live, work, raise families and do business?

Bibliography Arias, E. D. (2013). Getting smart and scaling up: The impact of organised crime on governance in developing countries a desk study of Jamaica. New York: New York University. Birchwood, A., & Goto, M. (2011). Issues in monetary and fiscal policy in small developing states (1st ed.). London: Commonwealth Secretariat. Boyne, I. (2009, June 21). Not the same IMF. The Jamaica Gleaner. Boyne, I. (2010, October 24). Seaga on Golding, Manley …. and Eddie. The Jamaica Gleaner. Business Gleaner. (2011, March 25). Rusal, Jamaica stand-off. The Jamaica Gleaner. Caribbean Policy Research Institute (CaPRI). (2007). CaPRI’s analysis of political pledges and promises: A summary. Kingston: CaPRI. Chaplin, K. (2011, October 4). Golding’s resignation and successor. The Jamaica Observer. Chen, W., Mrkaic, M., & Nabar, M., 2019. The global economic recovery 10 years after the 2008 financial crisis. Washington, DC: International Monetary Fund Working paper 19/83. Chowdhury, A. (2002). Politics, society and financial sector reform in Bangladesh. International Journal of Social Economics. 29(12): 963–988. DOI: 10.1108/03068290210447003

288 

C. CLARKE AND C. NELSON

Clarke, C. (2009, July 5). The road to recovery. The Jamaica Gleaner. CNN. (2008, April 4). Riots, instability spread as food prices skyrocket. CNN World. Commission of Enquiry into the Extradition Request for Christopher Coke. (2011). Report of the Commission of Enquiry into the extradition request for Christopher coke. Kingston: Commission of Enquiry into the Extradition Request for Christopher Coke. Devlin, R. (1981). The IMF: Physician or mortician? Washington, DC: CEPAL. Editorial. (2009, August 11). Life after Standard and Poor’s. The Jamaica Gleaner. Electoral Office of Jamaica. (2002). General elections 2002. Kingston: Electoral Office of Jamaica. Electoral Office of Jamaica. (2007). General elections 2007. Kingston: Electoral Office of Jamaica. Elliott, L. (2011, August 7). Global financial crisis: Five key stages 2007–2011. The Guardian. Grigorian, D., Alleyne, T., & Guerson, 2012. Jamaica Debt Exchange, Washington, DC: International Monetary Fund Working Paper 12/244. Headey, D., & Fan, S. (2010). Reflections on the global food crisis. How did it happen? How has it hurt? And how can we prevent the next one?, Washington, DC: International food policy research institute (Research monograph 165). Henry, B. (2002, October 23). Golding’s re-entry approved. The Jamaica Gleaner. International Monetary Fund. (2008). Staff report for 2008 article IV consultation. Washington, DC: International Monetary Fund. International Monetary Fund. (2010a). Jamaica: 2010 second review of the stand-by agreement: Staff report. Washington, DC: International Monetary Fund. International Monetary Fund. (2010b). Jamaica: Letter of intent, Memorandum of economic and financial policies and technical memorandum of understanding. Washington, DC: International Monetary Fund. International Monetary Fund. (2011). Jamaica: Third review under the stand-by arrangement staff report. Washington, DC: International Monetary Fund. Jaffe, R. (2012). Criminal dons and extralegal security privatization in downtown Kingston, Jamaica. Singapore Journal of Tropical Geography, 33, 184–197. Jamaica Information Service. (2020). Jamaica Information Service. [Online]. Available at: www.jis.gov.jm/profiles/orrette-bruce-golding. Accessed 30 Mar 2020. Johnston, J., & Montecino, J. (2011). Jamaica: Macroeconomic policy, debt and the IMF. Washington, DC: Center for Economic and Policy Research. Langrin, B. (2013). Policy lessons from postmortems of Jamaica’s two recent debt exchanges (very preliminary). Kingston: Bank of Jamaica Working Paper. Luton, D. (2010, May 12). Flip-flop: Golding admits sanctioning contract with Manatt. The Jamaica Gleaner.

11  THE PERFECT STORMS 

289

Mittal, A. (2009). The 2008 Food Price Crisis: Rethinking food security policies. Geneva: United Nations conference on trade and development working paper 56. Nelson, C. (2019). Social partnership and governance under crises (1st ed.). Hershey: IGI Global. Planning Institute of Jamaica. (2009). Vision 2030 Jamaica National Development Plan. Kingston: Planning Institute of Jamaica. Schmid, J. P. (2016). Addressing debt overhang: Experiences from two debt operations in Jamaica. Washington, DC: Inter-American Development Bank policy brief IDB-PB-259. Spencer, J. (2009, June 24). Will an IMF loan help Jamaica’s economy. The Jamaica Gleaner. Taylor, O. (2008, November 30). Reality cheque. The Jamaica Gleaner. The Economist. (2011, October 1). Jamaica’s prime minister Golding goes: The political price of an extradition. The Economist. The Financial Crisis Inquiry Commission. (2011). The financial crisis inquiry report. Final report of the National Commission on the causes of the financial and economic crisis in the United States (1st ed.). Washington, DC: The Financial Crisis Inquiry Commission. The Jamaica Observer. (2011, October 02). Bruce Golding  – A man of many firsts. The Jamaica Observer. Thompson, K. (2007, September 4). The making of Jamaica’s eighth prime minister. The Jamaica Gleaner. Van Der Ploeg, J. D. (2010). The food crisis, industrialised farming and the imperial regime. Journal of Agrarian Change, 10, 98–106. Wiggins, S., Keats, S., & Compton, J. (2010). What caused the food price spike of 2007/08? Lessons for world cereals markets. London: UKAID.

Index1

A Abolition slavery, 20 slave trade, 27 See also Abolitionists, England Abolitionists, 27 Accountable government, 286 political, xii regulations, 282 Actant, vii, x, 1–5, 8, 9, 19, 126, 249–250 Actor, vii–ix, xi, xii, 1–5, 7–9, 34, 62–66, 105, 115, 117, 126, 127, 170, 240, 241, 245, 246, 249, 250, 257 Actor network, vii–x, xii, 1–5, 8–11, 16, 19, 65, 85, 87, 95, 116, 117, 126, 127, 239–242, 249–250 Actor network relations, 116 macro social actor, viii, 4, 16, 250 See also Actor network theory (ANT); Relations of power

Actor Network Theory (ANT), vii, 2–4, 8, 9, 116, 126, 241, 242, 249, 250 See also Actant; Actor; Actor network; Circularity; Jamaica actor network; Sociology of translation Adams, Sir Grantley Barbados, 76, 77 See also Federation Adjustment programmes, 171, 178, 243, 252 structural, 96, 101, 103, 109, 111, 113, 141, 171, 172, 175, 178–180, 243, 244, 252, 253, 280 Administration, 38, 86, 126–128, 133–135, 137–140, 142, 156, 157, 159, 161–164, 167–169, 175–178, 181, 182, 189, 190, 195, 197, 199, 206, 207, 211, 228, 249, 266, 267, 269, 274, 281, 283, 287

 Note: Page numbers followed by ‘n’ refer to notes.

1

© The Author(s) 2020 C. Clarke, C. Nelson, Contextualizing Jamaica’s Relationship with the IMF, https://doi.org/10.1007/978-3-030-44663-5

291

292 

INDEX

Administrative Reform Programme reform, 58, 186 See also Civil service; Reform; World Bank Adult literacy, 46, 47, 51, 52, 57, 68, 83, 84, 129, 132, 174, 197, 249, 282, 287 Africans, 15, 26, 106, 110 Aggregators, 284 Agreement benchmark, 274 conditionality, 138 Agricultural central planning unit, 73 development, 73, 83 exports, 83, 170, 180 See also Plan Agricultural grooming, 46, 47, 51, 52, 57, 68, 83, 84, 129, 132, 174, 197, 249, 282, 287 Agricultural Marketing Company, 268 Agricultural produce bananas, 28, 33, 83, 167 coconut, 28 coffee, 28 logwood, 28 molasses, 28 rum, 28 sugar, 28, 33, 83, 167 See also Export; Prices; Tobacco Agricultural surveys conservation, 58 credit, 58 financial state, 58 See also Indebtedness; Soil erosion Agriculture, 33, 37, 51, 56–58, 60, 68, 73, 74, 82, 83, 124, 125, 128, 129, 133, 136, 144, 171, 175, 182, 183, 186, 191, 200, 211, 212, 222, 268, 284 Agriculture programme, see Agrarian reform AGRO 21, 179, 180

All-Age schools, 174, 186 Alternative, 19, 80, 139, 142, 159, 161, 164, 168, 182, 183, 285 Alumina, 70, 71, 81, 123, 131, 150, 151, 175, 177, 182, 271 Aluminium, 69, 70, 85 Aluminium Company of Canada (ALCAN), see Canada; Foreign Aluminum Company of America (ALCOA), 69, 70, 85 bauxite mining, 71 See also Aluminium Company of Canada (ALCAN); Aluminum Company of America (ALCOA); Bauxite Amendment Agreement, 98, 105 Articles, 95, 105, 108 US Wall Street Complex, 105 See also International Monetary Fund (IMF); Members; Policies; Staff Anglo governance, see Civil service; Public sector Animosity, 22, 39 Anti-crime, 227 Apprenticeship Programme, 18 Emancipation Act, 18 See also Transition Arawak indigenous, 15 natives, 15 See also Spanish; Tainos Article IV, 10, 98, 177, 182, 200, 203, 205, 208, 212, 217–242 International Monetary Fund (IMF), 98, 217–242 See also Countries; Programmes Articles amendment, 98, 105, 108 International Monetary Fund (IMF), 98, 104, 105 See also Fund, agreement

 INDEX 

Asian, 106, 107 Assembly, 17, 24, 170 Authorized dealers, 199 Authorized institutions Financial Sector Adjustment Company Limited (FINSAC), 205 licensed institution, 205 See also Depositors; Pension funds B Balance of payments (BOP), 94, 95, 98, 103, 104, 106, 108–110, 128, 129, 174–175, 181, 182, 218, 233, 273 support, xi, 111, 272 Bananas costs, 59 Panama disease, 59 research, 58, 59 spraying, 59 Bank of Jamaica (BOJ) interest rate, 181, 200 liquidity, 200, 208 See also Financial System Support Fund (FSSF) Bankruptcy law, 107 Banks, 100, 101, 106, 168, 171, 173, 174, 181, 186, 190, 196, 199–202, 210 Bank viability models repayment, 201 See also Rates of return Baptist church, 26 missionaries, 17 Underhill, Dr. E.B., 21 Base money, 221, 233, 238 Battle Ocho Rios, 15 Rio Nuevo colony, 15

293

Spanish, English, 15 Bauxite, 17, 23, 57, 73, 74, 77, 81, 84, 102, 129, 131, 140, 155, 160, 172, 174, 183, 197, 199–201, 228, 237, 240, 272, 274, 282 Aluminium Company of Canada (ALCAN), 69, 70, 85, 130, 131 Aluminum Company of America (ALCOA), 69, 70, 85 company, 71, 74, 127, 130, 135, 137, 138, 152 foreign direct investment, 85, 86, 100, 126, 127 Kaiser bauxite companies, 70, 85 mining, 71 multinational organization, 70 refining bauxite companies, 70, 71 Reynolds Jamaica, 69–71, 85 See also Infrastructure, development; Raw materials Benchmark, 1, 111, 112, 218, 274, 282 programme, 240, 277, 282 Bilateral, 99, 108, 131, 132, 135, 168, 191 Bitter medicine, 188 Black boxed, 2, 4, 8, 9, 117, 241, 249, 250 Black markets, 137, 150, 175 Blacks, 15, 16, 18, 22, 24–27, 29, 67, 137, 150, 175 Blair, Bishop Herro Public Defender, 281 Tivoli, 281 West Kingston, 282 See also Enquiry; Extradition Blaise Financial Entities, see Depositors Bogle, Paul, 22 Morant Bay, 22 See also Rebellion

294 

INDEX

Borrowing, 81, 94, 98, 112, 140, 189, 198, 199, 203, 205, 207, 212, 234, 244, 264, 266 International Monetary Fund (IMF) (see Fund) Borrowing relationship facility (see International Monetary Fund (IMF)) programmes, 112 Breakdown, 22, 272 Bretton Woods System, 91, 92, 116 of monetary management, 92, 93, 129 See also Fund; Keynes, John Maynard; White, Harry Dexter Britain, 20, 32–34, 40, 61, 67, 68, 75, 76, 79, 85, 96 British Commonwealth colonies, 62 independence, 62, 76 See also Caribbean British government Commission, 40 See also Gladstone, Premier British Parliament abolitionist movement, 27 England, 27, 33, 38, 61 See also Quaker British West Indian colonies, 56, 75 United Kingdom, 56 See also Marketings; West Indian colonies Buccaneers, see Britain Budget, x, 10, 68, 72, 73, 82, 83, 107, 125, 127, 129, 135, 140, 141, 154, 156, 160–163, 169, 173, 183, 186, 188, 190, 205, 209, 217, 221, 228, 231, 232, 234, 237–239, 243, 246, 247, 249, 267, 274, 278, 286

Budget presentations Jamaican economy, 125 plan, 127 See also Economic, growth Bureaucracy productivity, 256, 286 public sector, 256 Bureaucrats senior, 143 Bustamante, Alexander, 67, 76, 78, 79, 84, 183, 252 political party (see Jamaica) Bustamante Industrial Trade Union (BITU) labour, 30 wages, 30 See also Working conditions C Cabinet Office, 249 Callon, Michel, 2 actor network, 2 Camdessus, Michel, 97 International Monetary Fund, 97 See also Fund Campaign, 17, 46, 56, 125, 127, 138, 161, 162, 168, 177, 264, 266, 269 Canada, 69, 70, 76, 85, 94, 130, 138, 151 bauxite, 130, 138 See also Bauxite, company Capital, 21, 25, 38, 40, 69, 70, 74, 81, 84–87, 93, 96, 101, 103–109, 133, 136–139, 146, 160, 161, 163, 164, 167–169, 171, 175, 186, 187, 189, 198–203, 205, 207, 208, 218, 221, 228, 232, 237, 238, 245, 252, 266, 274, 281, 282, 285, 286

 INDEX 

Capital expenditures, 160, 186, 187, 286 Capital flows, 106 Capital inflows Asian (see Countries) crisis, 101 economies, 108, 207 Capital markets, 81, 93, 103, 104, 108, 137, 168, 189, 218, 246, 266 Capitalism, see Development Caribbean, see Development; West Indies Federation Caribbean Cement Company cement, 68 Caribbean Community (CARICOM), 17, 23, 57, 73, 74, 77, 81, 84, 102, 129, 131, 140, 155, 160, 168, 170, 172, 174, 179, 183, 197, 199–201, 228, 237, 240, 258, 272, 274, 282 Carter administration United States, 139, 146 CBI programme, 170, 179 Freezone (see Assembly; women) Central bank, 100, 128, 136, 186, 270 Century Financial Entities, see Depositors Churches Anglican, 17 Baptist, 17, 26 Methodist, 17 Presbyterian, 17 Quakers, (see Missionaries) Circularity, 1–5, 8, 9, 126, 249–250 Civil service, 52, 72, 83, 128, 129, 178, 186, 200, 243, 255, 256 Clarendon, 15 Class, viii, 16, 17, 20–23, 25, 26, 30, 32, 47, 54–55, 66, 67, 81, 87, 124, 134, 140, 143, 162, 170,

295

178, 181, 195, 207, 245, 252, 253, 255, 279, 284 freeholders, 17 freed slaves, 21 nationhood, 30 peasants, 66 sovereignty, 30 See also Democracy; Freedom; Labourers; Race Climate change, 268 Cockpit Country, 15 Maroon settlement, 15 See also Clarendon; Trelawny Coconut, 28, 57, 68 Coffee, 28 Coke, Christopher, 281 criminal, 280 extradition, 281 See also Crisis; Social capital; Violent Cold War The Soviet Union, 139 USA, 100, 139 See also Geopolitical; Strategic framework Collapse, 28, 32, 66, 79, 103, 109, 199, 209 Colonial Development and Welfare Act, 52, 67, 72 legislation, 52 See also Training Colonial Empire Marketing Board cassava, 56 exports, 56 guaranteed prices, 56 milk, 56 See also Limes; Sea Island Cotton; Sugar Colonial Office, 150 British, 23, 24, 40, 66, 72 See also Blacks; Coloureds; Race Colonies, 16, 20, 21, 24, 40, 52, 53, 56, 61, 65–67, 75–77, 186

296 

INDEX

Coloureds, 22, 24 Columbus, Christopher, see Caribbean; Discovery; Santiago Commercial, 60, 69, 92, 108 Commercial bank financial services, 181 interest rates, 181 risk, 201 See also Capital Commission on Central America United States, 178 Communications, 2, 3, 60, 61, 68, 74, 78, 257 Communism, 100, 137, 163, 284 Compensation reform commitment, 274 Competition, 20, 70, 85, 104, 172, 180, 203, 210 Competitive, x, 129, 170, 172, 286 Condensed milk, 68, 129, 130 Conditionalities benchmark, 111, 112, 277 performance criteria, 111, 112 structural, 103, 111, 178, 180 structural reforms, 109, 111 See also Fund; Structural adjustment; Surveillance; Underdevelopment Conflicts class, 16 freedmen, 16 slave, 16 See also Racial; Unrest Confrontations, 280 Consensus, 173, 188, 237, 245, 246, 255 Constitution, 22–24, 30, 61, 67, 72, 75, 78–80, 265, 278 Construction societies, 201 Consultations, 78, 92, 100, 102, 109, 116, 203, 237, 241, 245, 256 country, 109

See also International Monetary Fund (IMF); Union Consumer, 60, 63, 68–70, 81, 86, 137, 159, 168, 188, 201 Consumer Price Index (CPI), 227, 238 Consumption, vii, x, 2, 5–8, 10, 11, 91, 135, 141, 144, 148, 153, 156–158, 160, 239, 240, 247, 249, 251 Contagion Asian, 106, 107 capital flows, 106 IMF, 106 risks, 98 See also Crisis; South East Asia Contracts, see Employment Contradicted, 163 Convergence, 2, 4, 182, 250 Corporate, 29, 68, 72, 82–84, 112, 126, 131, 133, 161, 172, 191, 197, 202, 207, 248, 270, 274, 282, 285 Corporate imperialism, 84 multinational corporations (MNCs), 84 See also Agriculture; Manufacturing; Tourism Corruption, 137, 244, 264–266 Cost Savings Committee, 248 Countries, xi, xii, 1, 11, 22, 24, 29, 33, 53, 56, 62, 64, 72, 75, 81, 83, 85, 86, 93–117, 124, 126–128, 130, 132, 133, 135–142, 149, 152, 154, 156–159, 161–164, 167–171, 173, 174, 176, 179–182, 184, 185, 187–189, 196, 198, 209–213, 233, 234, 239, 244, 264, 266, 268, 269, 271–273, 278, 283–286 developed, 161, 266, 272

 INDEX 

International Monetary Fund (IMF), 103 low-income, 97, 98, 110, 111 middle income, 11, 110 See also Borrowing; Surveillance; World Bank Credit ratings, 135 Credit unions, 212, 213 Crime homicides, 280 killed, 280 murders, 281, 283 See also Confrontations; Political parties; Violence Criminal, 280 Crisis, viii–xii, 29, 64, 93, 94, 97, 98, 101, 103, 106–108, 113, 129, 132, 136, 137, 147, 153, 160, 176, 199, 202–204, 207, 209–213, 232, 241, 243–258, 267–283, 287 Critical Discourse Analysis (CDA), 5–8, 10, 126, 239, 249–251 discourse practice, vii, 6 Fairclough, Norman, 6, 10, 239, 249–251 Crop research, 180 Cross training, 249 Crown Colony law, 23, 24 planter class, 21 punishment, 23 See also Governor Cuba, 20, 29, 33, 124, 134, 135, 139, 141, 157, 161, 163, 168, 169, 185, 186, 195, 284 Currency devaluation, 157 Current account deficit, 107, 175, 176, 206, 209, 228, 231–233 surplus, 206 See also Capital flows; Countries; Policy Customs Union, 77, 78

297

D de Serras, Juan, 15 leader, 15 See also Maroon Debt, 282 International Monetary Fund (IMF), 99, 101, 106, 212, 239, 274, 278, 281 risk, 99, 109 See also Countries; Fund; Policy; Unsustainable Debt exchange, 212, 278, 281 Debt maturing, 278 Debt servicing, 186, 205, 243, 274 See also Financial institutions Debt trap, 227, 228 Decision making, viii, xi, xii, 1, 24, 95–97, 111, 116, 141, 241, 256 Decline, 28, 33, 81, 106, 125, 138, 148, 156, 158, 171, 175, 176, 178, 181, 182, 208, 217, 218, 222, 228, 237, 243, 251, 268, 270, 274 Deficiencies, viii, 28, 109, 258, 286 Demand, 16, 18, 26, 28, 29, 32, 34, 40, 53, 57, 61, 69, 73, 81, 82, 85, 86, 97, 106, 108, 110, 113, 128, 139, 142, 167, 176, 178, 179, 185, 203, 208, 209, 212, 213, 237, 243, 264, 269, 272, 278 Demerara Bauxite Company (Demba), 130 ALCAN, 130 Guyana, 130 See also Bauxite Democracy, 30, 76, 137, 156, 161, 178, 179, 264 Democratic, 30, 124, 134, 135, 139, 141, 157, 161, 163, 167, 168, 185, 186, 195, 264, 284 Democratic Labour Party (DLP) regional political party, 76 See also Federation

298 

INDEX

Democratic socialism, 124, 128, 135, 140, 156, 195, 272 Manley, Michael, 185, 195 Peoples’ National Party (PNP) administration, 126, 159, 162, 168, 173, 190, 287 See also Communism; Non-Aligned Movement (NAM); Socialism Dependence, 96, 124, 140, 156, 177, 209, 243, 244, 269 Depositors, 203–205, 209, 212 Deregulation, x, 102, 171, 172, 185, 190, 197, 198, 200, 201, 211, 264, 268, 271, 280 Deterioration, 23, 140, 178, 207, 208, 227, 228, 264 Devaluations, 93, 141, 154, 155, 157, 171, 175, 182, 188, 190 Devalue deficit, 182, 187 Jamaican dollar, 154, 157, 187 See also Dollar Developing countries, 53, 86, 97, 98, 100, 102, 103, 105, 106, 108–111, 113, 115, 132, 133, 135, 137, 138, 159, 164, 167, 210, 251, 268, 272 advice, 100 loans, 100 neoliberalism, 102 programmes, 111, 167 See also Liberalization; Structural Development, vii, viii, 1, 27, 38, 66, 91, 126, 170, 199, 217, 243, 264 agenda, 278 budget, 68, 83, 160, 243 capability, 114, 251 freedom, 114 plan, 83, 191, 266 politics, 1, 134, 252 Development agenda, see Vision 2030 Diaspora, 271

Dimensions of discourse, 6 Diplomatic ties, 169 Directorate, 143, 285 Discourse, vii–xi, 1, 2, 5–11, 19, 21, 25, 26, 30, 65, 75, 91, 95, 116, 117, 125–127, 134, 239–242, 246, 249–256, 285 Discovery, 15, 38–42, 69, 86 Discursive, vii, x, 2, 5–8, 10, 11, 91, 116, 239–241, 247, 249, 251 Disparate, 201 Distribution, vii, x, 2, 5–8, 10, 11, 22, 51, 81, 85, 86, 91, 124, 239, 240, 247, 249, 251, 286 Divergence, ix, 2, 4 Divestment, 196, 205, 274 Divestment Committee, 172 Dogmatic neoliberal, 102 See also Liberalization Dollar crisis, 108 currency, 92–94, 96 interest rate, 190 loan, 107 peg, 93 petrodollars, 100 reserves, 94, 108 United States, 70, 71, 83, 92–94, 96, 101, 107, 129, 131, 187 Domestic economy foreign capital, 74 revenue, 74 See also Agriculture; Communications; Infrastructure Domestic financial markets, 104, 274 Domestic regulations, 199, 202 Dominance, 16, 18, 19, 31, 96, 134, 136, 198, 238, 251 Donors, 138 IMF, 116

 INDEX 

See also British government; Decision making; Member governments; Social conditions; Unemployment Drug Caribbean, 280 guns, 280 transnational, 280 weapons, 280 See also Political parties E Eagle Financial Group, see Depositors Economic agriculture, 74, 136 growth, xii, 33, 71, 81, 83, 95, 97, 102, 104, 114, 117, 124, 125, 127, 132, 153, 170, 175, 181, 182, 184, 185, 196, 208, 209, 212, 213, 217, 222, 227, 239, 244, 247, 274 performance, xi, 86, 163, 177, 181, 236, 237 politics, viii, ix, xi, 1, 11, 32, 65, 67, 77, 87, 96, 97, 116, 117, 240, 243, 244, 287 programme (see Budget; Debt; Fiscal; Macroeconomic) rural, 39, 82 urban, 25, 32, 38, 39, 64, 82 See also Decline; Growth; Labour; Poverty Economic Stimulus Act, 270 Economies, 19, 66, 77, 95, 98–103, 105, 106, 108, 110, 210, 233, 234, 271, 272 Edible products, 68 Education early childhood, 174, 265 primary schools, 174 teachers, 84, 132 See also All-Age schools; Textbooks

299

Election, 17, 23, 61, 67, 76, 78, 82, 87, 123, 127, 135, 158, 161, 168, 169, 177, 179, 182, 185, 187, 189, 195, 197, 200, 208, 228, 237, 263–266, 273, 280 political party, 280 See also Jamaica; Victory Electoral cycle planning, 287 Electoral reforms integrity, 280 observers, 280 political parties, 280 See also Criminal; Politics Emergency Production Plan, 141–155, 168 Emigration land ownership, 169 unemployment, 29 See also Cuba; Latin America; Panama; United States (US, USA) Employment, 127, 159, 248, 279 Empowerment, 37, 63, 87, 257, 266 England, 15, 17, 27, 40, 63, 71, 80 Englishmen, see Services Enhanced HIPC Poverty Reduction, 114 See also Low-income; World Bank Enhanced Structural Adjustment Facility (ESAF) programmes, 110 World Bank, 110 See also Government; Poverty, reduction; Policies Enquiry, 58, 281 Enrollment, 3, 9, 123 European Union (EU), 32, 179, 188 Exchange, 92, 94, 95, 104, 139, 164, 184, 199, 228, 233, 240, 245, 249, 278, 284

300 

INDEX

Exchange rate, 92, 93, 95, 96, 99, 102, 108, 139, 181, 184, 185, 190, 191, 196, 197, 201–203, 207–209, 211, 218, 221, 227, 228, 232, 234, 237, 283 dual, 141, 142, 156 policy, 231, 239 Expansion budget agriculture, 83 unemployment, 83 See also Industry; Production; Tourism Expatriation, 68, 72, 126, 127 Expenditure, See Rebuilding; Retooling Export, 28, 32, 53, 56, 59, 60, 124, 128, 133, 136, 138, 140, 142, 156, 160, 167, 169–173, 178–180, 182, 191, 212, 238, 272, 285 Export-oriented, 169, 170, 191 Expropriation, 130, 131 Ex-slaves blacks, 18 freed persons, 16–18, 32, 37, 63, 86 See also Election; Politics Extended fund facility (EFF) arrangements, 109 conditionalities, 109, 152 instruments, 109 See also International Monetary Fund (IMF); Instruments; Loans External deficits, 177 Extradition, 280–282 criminal, 280 garrison, 280 power, 280 See also Drug; United States Government

F Factories, 56, 86, 132, 170–172, 174, 183 Fairclough, Norman, see Critical Discourse Analysis (CDA); Discourse Fait accompli, 163 Fannie Mae, 270 Farmers agriculture, 73, 133 production, 59, 133, 144, 180 Federal Reserve, 100, 270 Federation, 39, 61, 75–79, 87 uncompetitive, 63, 65, 76 Federation of Civil Service Associations of the Caribbean, 75 Financial, 24, 40, 58, 60, 66, 68, 71–73, 92, 94–96, 98–108, 110, 112–114, 132, 135, 137, 139, 140, 143, 157, 159, 161, 163, 169, 170, 178, 181, 190, 199–203, 207–213, 217, 221, 228, 231, 239, 244, 248, 266, 268, 270, 271, 274, 278, 279, 285, 287 Financial conglomerates, 201 Financial crisis IMF, 106 surveillance, 100 See also Asian; Debt; Mexican; Policies Financial institutions, 102, 135, 199–201, 203, 209, 210, 212, 213, 221, 232, 270, 271, 280 Financial regulation, 201 Financial Secretary budget, 72 designation finance, 72 officer, 72 See also Colonial Office; Financing

 INDEX 

Financial sector banks, 100 crisis (see Liberalization) insurance companies, 201 See also Capital inflows; Regulations Financial Sector Adjustment Company Limited (FINSAC) crisis, 211 intervention, 203, 205 See also Depositors; Divestment Financial System Support Fund (FSSF), see Inter-American Development Bank (IDB); International Monetary Fund (IMF); World Bank Financing, 72, 73, 95, 100, 110, 111, 130, 137, 138, 140, 146, 158, 172, 173, 181, 184, 228, 271, 273, 274, 287 Fiscal, 282 discipline, 93, 102, 198, 233, 234 IMF, 99, 107, 273 responsibility, 207 year, 160, 182, 186, 187, 218, 222, 227, 228, 274, 278 See also Fund; Policies Fiscal Responsibility Framework, 274 Flexibility, 110, 218, 227, 282 Float dollar, 195, 197 foreign exchange, 196 See also Currency devaluation Floating rate US dollar, 93 Food and Nutrition Security Policy, 268 Food security, 33, 268 Foodstuff, 53, 56–59, 268 Forecast, 106, 271 Foreign, 29, 68–70, 72–74, 81, 83–85, 87, 92–94, 96, 102, 107, 126, 130, 131, 133, 134, 136,

301

138, 141, 147, 159, 162, 169, 170, 180, 185, 186, 189, 191, 199, 200, 210, 212, 246, 251 Foreign enterprises, 131 Foreign exchange earnings, 127, 136, 138, 170, 173, 177, 231 market, 186, 187, 199, 200, 203, 218, 231, 232 reserves, 147 Foreign owners capital, 86, 285 See also Land ownership Fragility, 202, 231 Freedom, 17–19, 21, 26, 30, 31, 65, 76, 78, 79, 114, 125 legislation, 65 Free market, 101, 102, 172, 173 Free village Baptist, 17 Buxton, 17 Clarksonville, 17 freed slaves, 17 Quaker, 16 Sligoville, 17 Sturge Town, 17 Freed person, 16–18, 32, 37, 63, 67, 86 Frontloaded, 212, 274 Fund, ix, xi, 11, 73, 81, 83, 93–98, 100, 101, 103–111, 113, 115, 116, 123, 134–140, 142, 151, 154, 156–159, 161–164, 168, 169, 172, 173, 177, 178, 181, 182, 184, 187–191, 195, 198, 200, 201, 203, 205–208, 212, 218, 231–234, 237, 239, 272–274, 278, 282, 285, 286 agreement, 158, 164 International Monetary Fund (IMF), vii, 1, 83, 91–117, 123, 135, 195, 228, 244, 272

302 

INDEX

Fund (cont.) See also Balance of payments (BOP); Bretton Woods system; Programmes; Structural surveillance; Trade restrictiveness index G Garment, 170 Garment manufacturing, 170, 183 Garvey, Marcus, 26 See also Racist ideology General Agreement on Tariffs and Trade (GATT), 92, 286 Geopolitical, viii, ix, 32, 85, 97, 136, 167, 184, 244 Gilbert hurricane, ix Girls’ Practical Training Center readers, 46 schools, 46 Gladstone, Premier, 24 Global competition industry, 66 trade, 66 Global economy financial system, 99 International Monetary Fund (IMF), 92, 98 trade flows, 99 See also International Monetary Fund (IMF); Surveillance Global financial crisis, xi, 272 Global financial system, 270 Global governance, 91, 256 Globalization International Monetary Fund (IMF), 104 markets, 104 supervision, 104 See also Financial; Liberalization

Global politics empires, 66 See also Britain; United States (US, USA); War Gold convertibility, 93 Golding, Bruce, 263–265, 281, 283 See also Jamaica Labour Party Gordon, George William, 22 Morant Bay, 22 See also Bogle, Paul Governance colonies, 66 governor, 72–73 Government revenues, 74, 136, 271 Governments, 96, 115 revenues, 74, 136, 271 Governor, 17, 21, 23, 24, 27, 28, 60, 61, 72, 80, 189 British, 24 Colonial office, 23 Governor General, 76, 80 Queen's representative, 80 See also Britain Grenada invasion, see Caribbean; United States (US, USA) Growth, ix, xi, 28, 32, 33, 53, 69, 71, 72, 74, 77, 81, 85, 87, 92, 95, 97, 100–102, 104, 106–110, 114, 116, 117, 124–127, 129, 132, 137, 150, 153, 168–170, 173, 175, 176, 178, 179, 181, 182, 184, 185, 190, 196–199, 202, 203, 207–209, 212, 213, 217, 218, 221, 222, 227, 228, 231–234, 237–239, 256, 268, 271, 273, 274, 283, 284, 286 H Heads of Agreement for Civil Servants, 247

 INDEX 

Health, 27, 33, 40, 43, 47–52, 72, 73, 83, 86, 113, 171, 174, 178, 183, 186, 187, 191, 197, 208, 270 malnutrition, 39 milk, 47 See also Medical devices; Public health HEART Trust/NTA, 174 Heavily Indebted Poor Countries Initiative (HIPC) poverty reduction, 114 See also World Bank Heterogeneous, 2, 115 networks, 116 Hierarchical, 19, 66, 80, 253, 254 Hope Agricultural School, 58 Hostility, 22, 68, 152, 285 Household expenditure survey, 227, 238 Household mortgage debt, 270 Housing sanitation, 51 sewage, 183 stock, 39, 52, 63, 171 water, 51 Housing Allowance Loans, 183 Housing and Economic Recovery Act, 270 Human resource development, 191 I Ideology, 80 market, 19 neoliberalism, 116 socialism, 123 IMF Agreement, 5, 8, 9, 98, 161, 168, 170–171, 173, 198, 212, 278 IMF executive board, 115 International Monetary Fund, 115 See also IMF Staff IMF staff

303

country, 104 Managing Directors, 97 programmes, 116 See also Conditionalities; Policies, crisis Immigration, 17, 33, 71 Immutable mobiles, 4 Imperial College of Tropical Agriculture breeding, 58 funded, 58 research, 58 See also Hope Agricultural School Imperialism, 134, 157, 159 Importation China, 39 India, 39 Middle East, 39 skilled workers, 40 See also Animosity; Competition; Racial tension Incentives, see Corporate; Private sector Incentive structures, 271 Income, 82, 83, 125, 176 agriculture, 37, 57 land, 23 losses, 271 markets, 108, 178 wages, 139 See also Rural; Social infrastructure; Urban Incursion extradiction, 281 Public Defender, 281 See also Coke, Christopher, 'Dudus’ Indebtedness, 58, 232 Indentured servants, 15, 38 Independence, viii, x, 1, 30, 32, 34, 40, 62, 63, 100, 123, 125, 128, 154, 162, 191, 195–213, 252, 253, 280, 284, 286 Jamaica, 65–87 See also Federation; Secede

304 

INDEX

Independence Plan, 81, 82 economic development, 82 See also Budget presentations; Plan; Policies Independence Project Jamaica, 63 nationalism, 81 See also National development Industrial development infrastructure, 73 roads, 73 water supply, 73 See also Movement; Transportation Industrial relations, see Social partnerships; Trade union Industry furniture, 174 garment, 170, 183 global prices, 53 manufacturing, 77, 172 primary products, 53 See also Agriculture; Bananas; Bauxite; Coconut; Coffee; Labour force; Sugar Infrastructure, 25, 27, 32, 37–40, 52, 63, 71, 81, 84, 112, 124, 126, 130, 171, 197, 198, 210 development, 71, 130 See also Development; Health; Social; Transportation Innovation, 91, 104, 180, 268, 285 Inscriptions, see Actor network theory (ANT) Insolvency ownership, 203 weak, 211 See also Crisis; Financial institutions Instruments, 95, 101, 109, 110, 112, 128, 129, 201, 246, 252, 257, 278 Insurance, 51, 131–133, 199–204, 212 See also Crisis, Risk losses

Inter-American Development Bank (IDB), 131, 168, 272, 279, 280 Interessement, 3, 9 Interest rate IMF, 107 See also Growth; Recession; Unilateral Internal reserves, 201 International SDR, 94 US Dollar, 94, 96 International Bank for Reconstruction and Development, 92 Bretton Woods, 92 See also World Bank International capital markets, 108, 137, 168, 189, 266 International Labour Organization (ILO), 245, 253 International minimum standards, 221 International Monetary Fund (IMF), 1, 91–117, 123–164, 167, 195, 196, 217–242, 244, 272–282 international financial institution (IFI), ix, 114 International Monetary Fund (IMF) programmes, 11, 115, 142, 158, 160, 174, 183, 189, 273 International recession, 179 International Sugar Agreement, 53 Intervention government, 136, 138, 286 IMF, xi, 11, 286 Introspecting, 272 Investments, 32, 37, 38, 40, 63, 69, 71, 72, 74, 82, 85, 87, 93, 100, 103, 126, 131, 133, 136, 138, 141, 150, 153, 169, 171, 173–175, 178, 182, 183, 186, 200–202, 211, 233, 273, 282–284, 286

 INDEX 

Island and Hotel Incentives Act legislation, 72 tourism, 72 See also Development J Jamaica, viii, ix, 1, 5, 15–34, 38, 65–87, 100, 123–164, 167, 195–213, 217, 243, 244, 263, 264 country, vii, 1, 15, 38, 65, 123, 140, 167, 168, 197, 217, 233, 243, 264, 266, 271, 272 development, vii, ix, xi, xii, 1, 64, 68, 85, 126, 171, 181, 238, 252, 256, 286 independence, x, 1, 32, 40, 63, 65–87, 123, 125, 195–213, 284 political parties, 63, 77, 79, 80, 252, 253, 284 Jamaica actor network, ix, 1–5, 8, 9, 241, 249–250 Jamaica Confederation of Trade Unions (JCTU), see Trade union Jamaica Exporters Association, 185 private sector, 185 See also Corporate; Industry Jamaica Hotel and Tourist Association accommodation, 72 hotels, 72 incentives, 72 tourism, 72 See also Expatriation; Legislation Jamaica Hotels Law, 71 international airlines, 72 tourism, 71 See also Hotel Aid Law Jamaica Labour Party (JLP) Bustamante Industrial Trade Union (BITU), 79

305

political party, 252 See also Bustamante, Alexander; Trade union Jamaican actor network (JAN), 9, 240, 241 Jamaican Assembly, 18 Jamaica Teachers’ Association (JTA), 269 JAN, see Jamaican actor network K Keynes, John Maynard, 91, 92, 95 Bretton Woods, 91, 92 Kissinger, Henry, 178 L Labour, xi, 16–18, 20, 21, 26, 27, 29, 30, 33, 51, 54–56, 67, 68, 74, 76, 79, 81, 86, 128, 134, 140, 141, 174, 183, 186, 195, 231, 233, 245, 251–253, 255, 256, 265, 279, 284 Labour force, 16, 17, 33, 42, 53, 174, 251, 256, 284 Labour market, 231, 233, 252, 253, 265 Labour movement, 63, 246, 256 Labourers, 20, 21, 30 Land agrarian struture, 28 economic downturn, 28 See also Distribution; Programmes; Policies Land displacement Atlantic Food Company, 29 company, 29 landholdings, 29 United Fruit Company, 29 Land ownership, 58, 67 Land settlement, see Schemes

306 

INDEX

Land tenure agriculture, 28 housing development, 81 Landownership, 16 Language, see Discourse Larosiere, Jacques de, 97 International Monetary Fund (IMF), 97 See also Fund Latin America, 29, 96, 100–103, 106, 113, 280 Latin American crisis, 101, 106 debt, 101, 106 International Monetary Fund (IMF), 101 See also Programmes; Structural Latour, Bruno actors, 2, 4, 250 Law, John, 2–4, 240, 241, 249, 250 actor network, 2 Laws Bastard Act, 135 Copyright Law, 135 Equal Pay Act, 135 Land Laws, 135 Layoffs, 173, 178, 249 Leadership national, 237, 264 political, 27, 30 trade union, 26, 67 West Indies Federation, 77 See also Election; Referendum Legislative, 52, 76, 80, 167, 205, 221 Legislative Council government, 24, 72 whites, 24 See also Blacks; Coloureds Lehman Brothers, 270 Lender of last resort, see Balance of payments (BOP); International Monetary Fund (IMF) Lending rates, 200, 208

Liabilities assets, 202 maturities, 202 mismatch, 202, 203 See also Investments; Loans; Repayment Liberalization, 103, 202, 204, 209, 210, 212, 213, 271 competitiveness, 102, 133, 209, 218, 221, 228, 231 interest rates, 102, 201 market, 102, 104, 253 privatization, 102 trade liberalization, 92, 102, 221, 251 See also Competitive; Financial Life insurance policies, 200 Limes, 56 Liquidity crisis criticism, 106 fiscal austerity, 107 South Korea, 106 See also International Monetary Fund (IMF) programmes; South East Asia Living conditions capital, 86 extraction, 86 poverty, 86 wealth, 86 See also Foreign owners Loans conditionality, 111, 112 imposed; burden (see International Monetary Fund (IMF); Structural adjustment) Low-income, 176, 177, 187 M Macro social actor, viii, 4, 16, 91, 116, 250 Macroeconomic equilibrium, 203

 INDEX 

liberalization, 203 See also Crisis; Fiscal Macroeconomic management, 248 Magistrates planters, 16 stipendiary, 16 Management, x, 70, 92, 105, 106, 116, 117, 133, 134, 183, 186, 203, 205–207, 210, 211, 218, 240, 244, 245, 248, 252, 253, 255, 257, 271, 278, 285 Managing Directors Camdessus, Michel, 97 International Monetary Fund (IMF), 97 Larosière, Jacques de, 97 Witteveen, H. Johannes, 97 Manifestos, 185, 265 Manley, Michael National Workers' Union, 125 People's National Party, 125 See also Opposition; Prime Minister of Jamaica; Trade union Manufactured, 179 Manufacturing, 33, 68, 72, 77, 83, 84, 139, 142, 145, 170, 172, 175, 179, 182, 211, 212 Market determined rates, see Financial sector; Macroeconomics Market failure, 113, 202 Market forces, 188 See also Neoliberalism Market price, 17, 23, 57, 73, 74, 77, 81, 84, 85, 102, 129, 131, 140, 155, 160, 170, 174, 183, 197, 199–201, 228, 237, 240, 272, 274, 282 Marketings, 56, 58, 59, 68, 82, 180, 268, 286 Markets, ix, 19, 20, 37, 39, 53, 66, 71, 74, 81, 85, 93, 95–97, 99–105, 108, 110, 114, 132, 137, 144, 150, 171–173, 175,

307

176, 178–181, 184, 186–188, 199, 200, 202, 203, 212, 217, 218, 228, 231–234, 247, 265, 268–270, 274, 280, 284, 286, 287 Marley, Bob, 123 Marley, Robert Lester, 187 Maroon African slaves leaders, 15 black militia, 15 Masses, see People of Jamaica; Proleteriat Matriculation, 188 Maturity profile, 278 Media newspaper, 11 Medical fraternity, 269 Medical services, 47, 51 Medical training, 47, 51 Member governments, 96, 115 Members, 16, 18, 23, 24, 61, 62, 76, 77, 80, 83, 92, 94–99, 101, 103, 104, 109, 110, 114–116, 131, 162, 196, 213, 255, 264, 269, 281 Memorandum of Understanding (MoU), x, xi, 232, 246–258, 269 Monitoring Committee, 256, 258, 279 public sector, x, 243–258, 269 restraint, 247, 257, 269 See also Social partnership Mercantilism, 20 Merchandise, 178 Merchant banks, 201, 204, 212 Merrill Lynch, 270 Mexican, 101–103 Mexico, 96, 100, 101, 105, 106 crisis, 96, 106 fund, 96, 100, 101, 105, 106 structural, 101 See also Banks; Debt; International Monetary Fund (IMF)

308 

INDEX

Military intervention, 283 Minimal, 20, 66, 92, 98, 110, 137 Minimum wage, 132, 160, 161 Mismanagement, 161 Missionaries Anglican, 17 Baptist, 17 Presbyterian, 17 Quakers, 17 Mixed farming knowledge transfer, 57 single crop, 57 See also Demand; Farmers; Foodstuff Mobilization, 3, 8, 9, 17, 34 Model, government knows best, 80, 254 Moments Actor Network Theory, 3 dimensions of meaning, 6 Monetary, 92, 93, 95–97, 99, 108, 112, 116, 117, 186, 187, 200, 208, 209, 218, 227, 231–233, 238–240, 270 country, xi, 83, 103, 117, 140, 174, 186, 188, 189, 198 International Monetary Fund, vii– xii, 1, 5, 8–11, 83, 86, 91–117, 123–164, 168, 170, 171, 173, 174, 177–182, 185–191, 195–198, 201, 203, 205–209, 212, 213, 244, 272–286 See also Fund Monitoring Committee, 256, 258, 279 Moral hazard, 116, 202, 208, 212 Morant Bay Gordon, George William, 22 Bogle, Paul, 22 See also Rebellion Mortgage loan sector, 270 Movement, 17, 26, 27, 31, 33–34, 63, 70, 73, 75, 79, 81, 92, 104, 105,

107, 115, 124, 128, 134, 136, 159, 184, 231, 252, 253, 255 Moyne Commission development, 38, 46, 47, 51, 56, 57, 62–64 infrastructure, 37–40, 52, 63 See also Immigration; Poverty; Unrest Multilateral International Monetary Fund, ix, 10, 11, 132 surveillance, 99, 108 See also Bilateral; Countries; Fund Multilateral institutions, 265–267 Multilateralism autarky, 95 Multinational corporations (MNCs) bauxite, 69, 84 See also Bauxite; Mining; Refining Mutual coincidence of need, xi, 258 N National Bauxite Commission, 127 National Commercial Bank, 172, 199 National Commission on the Causes of the Financial and Economic Crisis in the Unites States, 270 National development, 191, 286 National independence agitation, 79 support, 34 See also Colonial mobilisation National Insurance Scheme (NIS), 84, 132, 161 Nationalization private, 136, 150 National Outcomes, see Vision 2030 Natural disasters, 227, 239, 244 Natural endowments, 266 Network relations, 3, 4, 116, 249, 250, 256

 INDEX 

New Public Management, 255 Newly emerging independent states, 66 See also Post-colonial states Non-Aligned Movement (NAM), 124, 128, 135, 136, 139, 140, 149, 156, 195, 272 See also Cold War Non-traditional, 28, 136, 149, 170, 171, 173, 179, 180, 183 Norman Washington Manley, 79 Jamaica, 79 See also Political party Nursing, 47 O Office of the Services Commission, 248 Official interbank rate, 200 dollar (see Financial sector) Oil, 68, 100, 108, 124, 128, 129, 132, 153, 167, 175, 177, 183, 191, 197, 234, 272 Old Representative System government (see Crown Colony regime) legislation, 23 Open markets, 178, 180, 181, 183, 208, 232, 233 Opinion writers, 285 Opportunities, 16, 17, 24, 25, 28, 31, 39, 61, 70, 72, 81, 84, 123, 129, 136, 137, 146, 178, 187, 197, 200, 203, 239, 256, 264, 266, 278, 280 Opposition, 56, 78, 82, 87, 125, 134, 139, 159–161, 195, 263, 266 Orderly liberalization Washington Consensus, 102 See also Countries; Policies; Programmes

309

Overseas, 34, 82, 179, 180 Overseas Private Investment Corporation (OPIC), 131 alumina, 131 US, 131 See also Bauxite Oversight, 60, 213, 268, 271, 283 P Palisadoes project expenditure, 282 weaknesses, 282 See also Management; Slippages Panama, 33 Parish council, 182, 187 Parliament, 38, 40, 58, 62, 80, 263–265 Party, 8, 67, 76, 78–80, 84, 85, 87, 93, 113, 123, 131, 134, 137, 158, 162, 163, 168, 169, 173, 185, 187, 195, 197, 202, 213, 237, 245–247, 252, 263–266, 274, 280, 281, 283 Pension funds, 205 People of Jamaica, 22, 23, 25, 26, 28, 62, 87, 125, 134, 139, 156, 181, 185, 188, 284 People’s Cooperative Banks, 179 People’s National Party (PNP) Prime Minister of Jamaica, 123, 267, 283 See also Prime Minister of Jamaica Plan development, 83, 191, 266 See also Budget presentations; Fiscal; Income Planning Institute of Jamaica, 266 Plantations planters, 16–19, 21–24, 32, 66 slaves, 16, 19, 253 See also Bananas; Estate; Sugar

310 

INDEX

Polarised, 273 Polarization, see Ideology; Party Policies, viii–xi, 11, 17, 20, 28, 38–40, 47, 51, 59, 61, 70, 72, 77, 78, 85, 87, 94–96, 98–115, 127–133, 135, 136, 138–142, 154, 156, 158, 161, 163, 168–174, 176–187, 189, 190, 195–213, 217, 218, 222, 227, 228, 231–234, 237–240, 243–246, 248, 249, 252, 253, 256, 257, 265, 266, 270, 274, 278, 279, 284, 285 crisis, 245 See also Conditionalities Political, viii, ix, xi, xii, 1, 5, 7, 9, 11, 16–18, 20, 21, 23–30, 32, 39, 60, 61, 64–67, 72, 73, 75–77, 79, 80, 86, 87, 96, 97, 111, 113, 114, 116, 117, 125, 127, 134, 136–140, 143, 149, 158, 159, 162, 164, 168, 173, 174, 188, 191, 209, 240, 243, 244, 253, 254, 266, 272–282, 284–287 Political parties, 27, 30, 77, 79, 80, 87, 252, 253, 280, 284 Political party, 27, 30, 63, 77, 136, 280, 284 Political platform, 163, 266 Politics, 16, 18, 31, 78, 97, 115, 135, 244 Population dynamics, 53 expansion, 53, 126 export, 56 growth, 33, 53, 71 See also Local production; Markets Positioning, ix, 77, 126 Post-colonial powers, 87 Post-colonial states, xii Post-Independence, 124, 138, 167, 210

Poverty, 26, 28, 32, 57, 64, 67, 107, 110, 113–115, 141, 208, 212, 221, 272, 286 alleviation, 114 Poverty Reduction Strategy Papers World Bank, 114 See also Poverty, alleviation; Poverty; Reduction Power relations, 2, 6, 7, 16, 19, 20, 65–67, 126, 239, 251, 257 social practice, 6, 7, 19, 239 Pragmatic, 140, 163, 169, 253, 270 Premier, see Prime Minister of Jamaica Premiums, 59, 200, 204, 270 Prescribed, 40, 104, 107, 112, 116, 127, 184, 241 Prescriptions, 40, 99, 102, 103, 113, 137, 142, 162, 173, 181, 189, 250, 285, 286 Pressures, 24, 29, 39, 73, 93, 128, 130, 134, 138–140, 156, 160, 179, 181, 208, 232, 238, 245, 246, 255, 257, 272 Prices agriculture, 82, 234 banana, 59, 83, 167 export, 133, 167, 180, 238 policy, 128 sugar, 83, 167 See also Economic, growth Primary school curriculum, 46, 47, 51, 52, 57, 68, 83, 84, 129, 132, 174, 197, 249, 282, 287 Prime Minister of Jamaica, 78, 79, 123, 267, 283 Private sector, 27, 38, 68, 72, 82–84, 103, 129, 133, 134, 136, 137, 139, 140, 145, 160, 161, 163, 169, 172–175, 177, 179, 185, 186, 190, 191, 195–198, 202, 203, 205, 207, 208, 211, 247–249, 264, 268, 270, 273, 274, 278, 279, 282, 284, 286

 INDEX 

Private Sector Organisation of Jamaica (PSOJ), 137, 171 See also Corporate; Financial Privatisation, 101, 102, 169, 172, 189, 199 Privatised entities, 200 Privy Council, 23, 80 Problematization, 3, 9 Production, vii, x, 2, 5–8, 10, 11, 20, 25, 28, 33, 37, 40, 46, 51–53, 56, 57, 59, 63, 68–70, 74, 80, 82, 83, 86, 91, 128, 129, 132, 133, 135, 136, 141, 142, 144, 150, 169, 171, 176, 179, 180, 183, 185–187, 191, 196, 227, 231, 238–240, 247, 249, 251, 253, 268, 286 Production Budget agriculture, 83 industry, 83 See also Budget presentations, International Monetary Fund (IMF) Productive capacity, 66, 71, 141, 142, 161, 171 Profitability colonies, 66 economies, 78 See also Agricultural exports; Crop research, Sugar Programmes, ix, xii, 11, 18, 26, 28, 39, 42, 46, 63, 82, 83, 103, 106, 109–113, 115–117, 125, 126, 128–130, 132, 135, 136, 139, 140, 142, 151, 154–156, 158, 160–163, 167, 169–175, 177, 178, 181–190, 195, 197, 200, 201, 207, 217, 218, 221, 234, 238, 243, 252, 269, 272–274, 278, 279, 282, 284, 285, 287 Proleteriat, 22, 25, 26, 28, 134

311

Propaganda, 3, 160, 168 Property holders, 16 Prudent management, 213 Prudential, 108, 199, 201, 218, 221, 228, 233, 239 Public debt to GDP, x, 213, 232, 233 Public enterprises, 172, 177 Public health, 27, 47, 51, 68, 187 Public officials conduct, 283 political, 283 regulations, 283 See also Power relations Public sector, x, 40, 42, 79–80, 100, 160, 173, 174, 177, 183, 184, 187, 197–199, 203, 204, 208, 209, 212, 213, 217, 218, 221, 246–249, 253–257, 264, 269, 272–274, 278, 282, 284, 287 Westminster model, 254 See also British, Civil Service, Parliament Public sector debt, 217, 218, 221, 222, 227, 231 Public Sector Development, 247, 249 Public Sector Investment Programme, 174 Public Sector Memorandum of Understanding, x, 243–258 Public spending bauxite revenues, 74 government contribution, 74 recurrent revenue, 74 See also Fiscal, savings; Shortfall Public transportation, 175, 265 Public utility, see Crisis Q Quaker, 16, 17 Quid pro quo, 128, 247

312 

INDEX

R Race, 25, 29–31, 69, 143, 270 Racial, viii, 16, 25, 29, 30 Racial tension, 39 Racist ideology, 26 Rates of return, 201 Raw materials, 33, 40, 70, 100, 139, 170, 174 Reagan administration, 101, 176 Real Effective Exchange Rate (REER), 218, 232 Rebellion, viii, 18, 19, 21–24, 26, 27, 31 Rebuilding, x, 24, 63, 68, 73, 74, 81, 101, 128, 141, 142, 155, 158, 160, 174–176, 181, 198, 218, 228, 233, 239, 246–248, 251, 265, 271, 282 Recession, ix, 101, 107, 129, 175, 283 Recurrent expenditures ·, 228, 246 Referendum, 78 Jamaica, 78 Refining, 69–71 Reform, x, 24, 25, 39, 58, 83, 100–102, 108, 109, 111, 115, 127, 129, 130, 138, 139, 142, 147, 171, 172, 175, 177, 179, 180, 183, 188, 189, 197, 199, 207, 209, 210, 217, 221, 222, 227, 228, 231, 232, 234, 238–240, 243, 256, 264, 265, 273, 274, 280, 282, 287 Refreshed, see International Monetary Fund (IMF) Reggae, see Marley, Bob Regime Change, 126–128 Regulations, 100, 104, 199, 200, 211, 237 Regulators, 211, 271, 283 Regulatory framework, 203, 205, 231, 233, 271 Regulatory oversight, 271

Regulatory regime ·, 211 Relations of power, 2, 6, 7, 16, 19, 20, 65–67, 126, 239, 251, 257 Relocate, 212 Remittances, 271 Rent, 16, 17, 20, 171 Repatriated expatriates, 68 foreign, 68 profits, 68, 162 See also Overseas; Returns Repayment, 69, 93, 106, 109, 112, 145, 197, 201, 206, 270, 278 Representation, 6–8, 10, 19, 23–29, 61, 62, 65, 78, 91, 115, 117, 126, 127, 191, 203, 211, 239–241, 246, 250, 253 Reserves, 147 capital flight, 203 (see also Foreign exchange reserves) market failure, 202 Restraint, 173, 208, 218, 221, 247, 248, 257 Restructure, 203, 231, 273 Retooling, x, 24, 63, 68, 73, 74, 81, 101, 128, 141, 142, 155, 158, 174–176, 181, 198, 218, 228, 233, 239, 246–248, 251, 265, 271, 282 Retrenchment, 231, 247, 249 Returns, ix, x, 25, 68, 85, 86, 101, 107, 113, 127, 133, 137–140, 147, 156, 157, 160, 162, 163, 168, 182, 195, 202, 209, 211, 251, 264, 267, 272–284, 286, 287 Revenue projections, 208 Reynolds Jamaica bauxite, 71 land, 71 mining, 71, 85 processing, 70, 85

 INDEX 

Rhetoric, 26, 78, 134, 137–140, 158, 161, 163, 167, 195, 285 Risks, xi, 98, 99, 106, 108, 109, 113, 143, 201–203, 211, 218, 221, 227, 232–234, 237, 238, 252, 258, 270, 273, 280, 282, 286 financial, 98, 99, 201, 202, 221, 237 instability, 109 macroeconomic, 109 See also Collapse; Debt Road Construction and Maintenance Programme, 84 Rule of law, 16 British empire, 16 See also Landownership Rural, 25, 32, 38, 39, 51, 64, 71, 76, 82–84, 130, 132, 180, 183, 221, 268 S Santiago, 15 Scare tactics, 286 Schemes, 17, 28, 29, 47, 51, 52, 60, 73, 84, 187 Sea Island Cotton, 56 Seaga, Edward Jamaica, 160, 168, 169, 173–176, 181, 182, 200, 202, 203, 211, 263, 264 Labour Party, 63, 67, 79, 82, 85, 87, 124, 168, 173, 179, 181, 182, 185, 187, 252, 263–265, 283 See also Prime Minister of Jamaica Secede, 78 Second World War British, 40 See also Colonies Secondary school building, 174 repair, 174, 183

313

Sectoral plans, 133 Securities market dealers, 228 Security forces police, 17, 124, 135, 265, 280 protest, 22 strikes, 22 See also Blacks; Coloureds; Garvey, Marcus; Rhetoric Sequencing liberalization, 104 regulation (see Washington Consensus) standardization, 104 Sequestered accommodation, 17, 20 planters, 17 See also Accommodation; Plantation, planters; Rent; Strikes; Unrest; Wages Services banking, 84 financial, 181 Shocks, 100, 108, 124, 128, 133, 167, 175, 211, 222, 227, 231–234, 237–239, 244 Shortfall, 74, 102, 191, 234, 237 Shuffled, 196 Cabinet, 196, 197 Signifying actors, 5 Simpson Miller, Portia, 191 Slave, 15–21, 27, 65, 253 See also Africans; Blacks Slippages, 129, 195, 200–202, 209, 211, 222, 227, 232, 237, 282, 286 Small businesses development, 181 Small farmers bananas, 28, 180 coffee, 28 rural, 82 See also Poverty; Production Smallholders, 16, 29, 60

314 

INDEX

Smithsonian Agreement dollar gold convertibility, 93 G-10, 94 See also Bretton Woods System Soap, 68 Soap and Edible Products (SEPROD) Limited, 68, 129 manufacturing, 68 See also Condensed milk; Edible products; Oil; Soap Social indicators, 189, 286 infrastructure, 32, 63, 174 poverty, 67, 114, 141 Social capital, 244, 258, 281, 286 Social conditions, 7, 124, 125, 127, 138, 173 Social construction, 6–8, 10, 19, 65, 91, 117, 126, 127, 239–241, 250, 253 Social context, 5, 250 Social dialogue, 245, 246, 255, 256 Social discourse stagnant, 125 sufferation, 125 See also Masses; Social; Unemployment Social infrastructure, 32, 63, 174 Social ordering, 4, 115, 250 translation, 4, 250 Social Partnerships, x, xi, 245, 247, 252, 253, 256, 258, 270, 278, 281 Social practices, see Discourse; Representation; Social construction Social reforms, 127, 130, 138 Social sector education, 33 health, 33 infrastructure, 33 See also Agriculture; Food security; Production

Social services education, 39, 68, 73, 74 health, 68, 73 health care, 39, 187 infrastructure (see Gender; Poverty; Women) youth (see Housing; Infrastructure; Transport) Socialism, see Cuba, Democratic Society, 6, 10, 16, 18, 19, 21, 25, 38, 47, 65, 66, 70, 80, 114, 126, 127, 131, 133, 134, 136, 163, 164, 173, 176, 181, 188, 191, 201, 204, 212, 245, 247, 251, 253, 266, 279, 284, 285 Sociology of translation, see Actor Network Theory; Translation Soil erosion, 58 Solidarity, 183 housing, 183 South East Asia, 106 Sovereignty, 30, 97, 141, 142, 256 Spanish, 15 Special Drawing Right basket, 94, 95 currencies, 94, 95 IMF accounting unit (see Special Drawing Right) peg, 95 Special Employment Crash programme, 135 Specialists inspectors (see Medical training; Nursing), 47 public health nurses, 51 scholarships, 47 Speculators, 107 Staff, 47, 51, 58, 70, 99, 105, 134, 135, 157, 174, 208, 209, 218, 221, 222, 227, 228, 231, 234, 237, 248, 249, 255, 273, 274, 278, 282

 INDEX 

Standard and Poor, 284 Stand-by Arrangement (SBA) conditionalities (see Flexibility, Fund; Minimal;International Monetary Fund) country, 110, 139 instruments, 110, 278 policies, 113 Status quo, 21, 25, 67, 162, 182, 255, 257 Stereotypical, 255 Strategic framework, xi, 266 Strikes, 21, 29, 253 Structural adjustment (see Fund; Policies; Reforms) International Monetary Fund, 96, 109, 111, 171, 179 Structural Adjustment Facility (SAF) conditionalities, 111–114 loans (see Instruments, Developing countries) Structural adjustment loan (SAL), 171, 172, 180, 185 Structural benchmarks, 111, 274, 282 Subprime, 270 Subsidies crops, 21, 59 foodstuff, 53, 56–59, 268 production (see Agriculture; Land; Vegetables) Sugar plantation, 16, 37 production (see International Sugar Agreement) quota, 56 Sugar Bill, 20 British Treasury (see Cuba; Latin America) Supervision, 104, 108, 199, 200, 203, 210, 212, 213, 218, 221, 228, 232, 237

315

Surplus devaluation (see Gold convertibility) speculative attacks, 93 Surveillance, 98–100, 108, 109, 217, 227, 232–234 International Monetary Fund (see Countries; Fund) Sustainability economic, 39, 104, 126, 231 fiscal, 126 programme, 167 T Tainos, 15 Tariffs, 172, 199, 221, 268 Taxes Bauxite agreement, 73 revenues, 74, 81, 160 WTO (see Bauxite; Caribbean Community (CARICOM); Market price) Tax package, 174, 200, 201 Tax rules, see Disparate; Reform Teachers, 39, 46, 47, 51, 52, 57, 68, 83, 84, 129, 132, 174, 176, 183, 197, 249, 269, 282, 287 Technical skills, 174, 176 Tertiary graduates, 284 Text, see Consumption; Discursive; Distribution; Production Textbooks, 174, 186 Theoretical framework Actor Network Theory (ANT), vii, x, 1–5, 8, 9, 126, 249–250 Critical Discourse Analysis (CDA), vii, x, xi, 6–10, 239–242, 249–251 Third World, see Democratic socialism; Non-Aligned Movement (NAM) Throne Speech, 82, 132, 153, 160, 185 Parliament (see Budget; Plan)

316 

INDEX

Tourism, 74, 76–78, 83–86, 129, 133, 135, 137, 142, 177, 182, 183, 200, 222, 227, 231, 268, 271, 282 Trade deficits, 107, 176, 180 Trade restrictiveness index, 231 Trade union, x, 26, 29, 30, 67, 81, 134, 140, 178, 195, 200, 243, 245–247, 251–256, 270, 279 worker, 81 See also Class; Labour; Peasant race Traditional exports, see Agriculture Training, see Adult literacy; Agricultural grooming; Primary school curriculum; Teachers; Vocational Transition, 18, 37, 39, 75, 136, 150, 159, 191, 195, 268, 285 Translation, see Actor Network Theory; Sociology of translation Transport, 51 Transportation, 69–71, 73, 178 Treaty of Madrid, 15 English, 15 Spanish, 15 Trelawny, 15 Tribal, 87 political parties, 87 Tropical Storm Nicole hurricanes, 282 natural disasters, 282 See also Debt; Fiscal U Uncompetitive, 138, 287 Underdevelopment, 161 Unemployment, ix, 23, 28, 29, 33, 39, 57, 67, 71, 82, 83, 107, 124, 125, 128, 132, 137, 141, 150, 156, 161, 176, 177, 181, 182, 217, 218, 251, 272 insurance, 132

jobs (see Income; Wages) malnutrition, 39 migration, 82 Unilateral, 138, 221, 247 Union, 26, 29, 30, 54–55, 60, 77, 134, 140, 191, 195, 212, 213, 252–255, 257, 269, 279 United States (US, USA), 29, 47, 68–72, 76, 81, 83, 85, 92–94, 96, 99–102, 107, 108, 115, 129–132, 135, 138, 139, 146, 152, 159, 168–170, 173, 176–180, 184, 185, 187, 189, 270, 272, 281 United States dollar (USD), 70, 71, 83, 92–94, 96, 101, 107, 129, 131, 187 United States Federal Government 807 Programme duty free concessions (see Factories; Garment) free zone, 170 United States foreign policy, 70, 85, 178 United States Government, 69, 70, 131, 280 United States Treasury International Monetary Fund, 92, 96, 101, 102 Universal Adult Suffrage politics, 60, 67 rights (see Freed person; Land ownership) Unregulated, 170 women, workers (see Garment manufacturing) Unrest, viii, ix, 31, 82, 87, 135, 191 Unsustainable, 99, 130, 137, 209, 247, 285 Unsustainably leveraged, 271 Urban, 25, 32, 38, 39, 51, 64, 71, 76, 82, 84, 130, 133, 268 Urban bias, 268

 INDEX 

U.S. dollar convertibility (see Bretton Woods System of monetary management) gold, 93, 94, 129 pegged rate, 93 Use of local materials, 46, 57 V Vegetables, 59, 180 Victory, 77, 79, 135, 137, 169, 265 Violence, 3, 123, 153, 161, 168, 191, 231, 280 Violent, 137, 168, 212, 280, 286 Visas, 177 Vision 2030, 266, 278 Jamaica, 266 Vocational, 46, 47, 51, 52, 57, 68, 83, 84, 129, 174, 186, 197, 249, 282, 287 Vulnerability social capital, 286 structural reforms (see MOU; Slippages) See also Crisis W Wages, x, 16–18, 20, 21, 27, 30, 68, 82, 83, 125, 130, 133, 137–139, 141, 147, 150, 156, 170, 176, 178, 196, 198, 200, 203, 207, 209, 217, 221, 228, 233, 243, 246–248, 269, 272, 278 Wages, company, see Workers, unions, 30 Wage increase, see Civil service; Trade union Waiver, 181, 182, 184, 272, 282 War, 31, 38, 40, 51–53, 56–59, 66, 68, 69, 86, 92, 95, 104, 162, 245

317

Washington Consensus, ix, 96, 101–103, 168 neoliberal, 102, 103, 168 policies, 101, 102 International Monetary Fund fundamentalism (see Economies; Free market; Mexico) Welfare, 23, 27, 28, 38, 46, 51, 52, 57, 67, 101, 141, 161, 183, 248 West India Sugar Company Ltd (WISCO), 30 West Indian colonies, 56 West Indian Conference of 1944, 57 agricultural diversification, see Local materials, use of West Indies Federal Labour Party (WIFLP), 76, 77 Regional political party (see West Indies Federation, election) West Indies Federation, 75–77 British independence (see Federation; Uncompetitive) election, 76 single federation, 75 Westminster model, 80, 254 British (see Governor; Parliament) government, 72 Westminster Model, British, see Model, government knows best White, Harry Dexter, 95 Bretton Woods, 92 See also International Monetary Fund (IMF) Whitehall, 80 Windalco, 71 bauxite mining, 71 Witteveen, Hendrikus Johannes, 97 International Monetary Fund (IMF), 97 See also Fund Women, 39, 52, 67, 132, 170

318 

INDEX

Work conditions, 25, 27, 30, 38, 81, 170 income (see Poverty; Unemployment; Welfare) wages, 20, 30, 170, 187 Workers, x, 16, 30, 37, 39, 40, 52, 57, 58, 81, 82, 105, 133, 134, 139, 170, 181, 187, 197–199, 245, 247, 252, 253, 255, 257, 263, 278, 284 Working class, 20, 170, 178 freed slave, 21 labourers, 20, 21, 30 See also Freed person; Indentured servant Working conditions, 25, 27, 30, 38, 81, 170 World Bank, 92, 101, 102, 110, 113–115, 170

Bretton Woods, development International Monetary Fund (see Bretton Woods; Development) loans, 102, 171, 173, 180, 187, 279 neoliberal, 101 World Bank (WB), 171–173, 179, 180, 186, 187, 189, 190, 197, 199, 211–213, 258, 268, 272, 278, 279 World Development Report, 268 World War 1, 28, 32, 66, 69 autarky, 32 conflict (see Climate; Decolonization) X Xaymaca, 15 island (see Jamaica)