There is much pride and excitement in some quarters as Mr Richard Byles, co-chairman of the Economic Programme Oversight Committee (EPOC), announced that the Government had met and, in some cases, surpassed all the key quantitative targets under the programme with the International Monetary Fund (IMF) for the quarter to September.
Ironically, the very next item of news was a report that contractors who did work for the Government 15 months earlier had not been paid. One spokesman, speaking on the same matter, claimed that this is the case across the board.
I am happy for EPOC and the Government, but it seems to me that any company that can ignore the pleas for payment by its workers and suppliers for 15 months would have no difficulty showing a healthy bank balance. But is the company healthy? And is the increased size just the bloat that is heralding kidney failure?
I suspect this is what an angry Michael Williams, general secretary of the NDM, was suggesting on a television programme last Thursday night. He had to be saying this because the Opposition (JLP) is where it usually is when the country needs it most – off on a fool’s errand.
There are those among us who still believe there are huge benefits coming our way from the IMF. They need to understand the IMF’s history and what its real role is. These emergency loan packages are all tied to certain conditions referred to as structural adjustment policies. Borrower countries have to follow the IMF’s policies to get loans, international assistance and even debt relief.
Once the agreement is signed, it is the IMF that decides how much is spent on health, education, infrastructure, etc. I can think of no other institution in the world that is more powerful. Having said that, it must be clearly understood that the IMF is here to serve a different master.
Countries usually resort to the IMF in times of crisis. Invariably, the IMF insists that countries tighten fiscal policy. This despite the fact that only one outcome is possible with this strategy – the country is pushed into deeper recession. Two weeks ago, three established companies laid off about 300 workers. And there is more of this to come as businesses are contracting everywhere as more and more companies experience difficulty collecting and coping with a creeping devaluation. This is the IMF at work.
The Bank of Jamaica (BOJ) governor says the dollar is undervalued, but by how much he did not say. So no one knows where the dollar rate will settle. Planning, therefore, involves a lot of guessing and speculation.
When Latvia was forced to seek the IMF assistance, that body demanded that fiscal policy be tightened. This despite the fact that the economy was shrinking at an alarming rate. Soon, the only word that could appropriately describe that economy was ‘skeletal’. But the IMF still wanted an extra pound of flesh.
The IMF was quite comfortable with the decision of the Latvian government when it decided that it had no alternative but to close some schools and hospitals to meet IMF demands. Then the people took to the streets. Is there a lesson here for us?
Four years ago, I gave a seriously ill man bus fare to go to KPH. He told me that he was seeing a doctor for the first time in 20 years because he was unable to pay. As we speak, there is a man I know in hospital. He has been there for weeks. His foot was crushed by a car. Surgery is required but the hospital has handed him a list containing what will be required for the surgery.
Stress is now added to his pain, because he tells me he knows he will never find the funds. It seems user fees have been sneaked in through the back door. This is the IMF at work!
The IMF wants us to focus on export production and not a diversified domestic economy. About 80 per cent of all malnourished children in the developing world live in countries where the farmers have been forced to shift from food production for local consumption to the production of export crops required by wealthy countries. The IMF is not keen on assisting domestic industries.
I wonder if there are small businesses and farmers who are finding it increasingly difficult to compete? That problem would have IMF stamped all over it. The IMF forced Haiti to open its market to imported, highly subsidised US rice, while preventing that country from subsidising its own farmers. The result is that a US corporation called Early Rice now supplies about 50 per cent of the rice Haitians consume.
For the IMF supporters that remain, may I point them to some other countries that resorted to IMF ‘assistance’. Mexico, South Korea, Thailand, Indonesia, Brazil, and Russia. In Asia, IMF involvement resulted in the crisis deepening and spreading to more countries. By the time they were through with Mexico, the number of Mexicans living in extreme poverty had increased by more than 50 per cent and the national average minimum wage fell by 20 per cent.
Could it be that the IMF has a different, more workable plan for Jamaica? Are the layoffs, closures, devaluations, rising unemployment, resumption of ‘user fees’ and crime the unseen hand of some other wicked agency?
Since no one else will tell us, maybe EPOC could explain where in all of this is a plan for growth. It is universally understood that only growth can extricate us from the grip of global gangsters like the IMF, WTO and the World Bank. We need to understand how, in the face of all that is inimical to growth, can growth take place.
‘sweetie money’
It seems to me that our best bet is for the IMF – if it really wants to help – to pay off our debts and provide us with a moratorium for 10 years before repayment – even at a higher interest rate – to it. During this time, with close monitoring, we could invest heavily in health care, education, training, research and development, and infrastructure development.
The needs of poor countries are ‘sweetie money’ compared to the enormous resources the IMF has on hand. Such a strategy is not likely to make a noticeable dent in their resources.
There can be no doubt that our present precarious position is a result of our own profligacy and corruption. But should persistent poverty be the patrimony for posterity? The poor, inept and corrupt management of our resources has placed us in a position where we are being recolonised by the wealthy nations which have created agencies like the IMF to facilitate this process.
The real role of the IMF is to ensure that debts are repaid and resources are produced cheaply for the wealthy nations. Agencies like the IMF, WTO and the World Bank send us representatives schooled in diplomacy but they are no less ruthless than the captains of those boats that took us through the Middle Passage.
The developmental model proposed by the IMF is fundamentally flawed. It recommends a one-size-fits-all fiscal tightening. It ensures debt repayment by demanding spending cuts on areas critical for development like education, health, basic food, and transportation subsidies, increasing poverty and reducing our ability to develop vibrant domestic economies.
The IMF knows these strategies will not work for us, if for no other reason than the fact that this was not the path followed historically by the countries they serve. The real solutions will not come from these global loan sharks beholden to wealthy countries and Wall Street. We must save ourselves.
n Glenn Tucker is an educator and sociologist. Email feedback to columns@gleanerjm.com and glenntucker2011@gmail.com.
Glenn Tucker