Beggin, beggin you

Photo by Heloise Bottomley.

Prime Minister Golding is putting his loving hand out to the International Monetary Fund for a loan to help Jamaica’s struggling economy.

It’s with a clear sense of desperation that he’s doing this; he’s reported as saying the factors that are leading down this path are :  the markets are not lending any money, downturn in bauxite and tourism, reduction in remittances.

The last time Jamaica got help from the IMF was not a great thing.  The list of conditions and strings attached, crippled the local economy through cuts in public spending which hurt the poor.  Throughout the 1970’s and 80’s, the loans mounted up and growth stayed low.

Will this time be any different really?  It’s supposed to be thinking differently - the IMF I mean, and they have outlined a whole new set of rules based around its’ loans.  But the Director of the IMF, Strauss Kahn says that they are “helping” Jamaica with its’ new tax initiatives.   Should Jamaica trust the IMF?

What’s your job? I’m a thief …

Photo by Anne Ruthmann

It seems more and more Jamaicans are taking up robbery as a professional career.  In times of economic downturn, crime pays.

There’s been a staggering increase in the number of reported robberies, a 79 per cent increase on around this time last year.  In actual numbers, there were 277 robberies and 294 break-ins in one month alone.

It’s pretty shocking, but easy money.  I remember talking to some guys who were eagerly awaiting hurricane season one year for looting opportunities. It’s like other countries wait for the strawberry picking season for their employment.

I suppose it makes perfect sense if this is the only way you can see to make money.  But the knock on effects of a worsening crime situation on the island are obvious enough.  Robbery is the nail in the coffin for local businesses struggling to keep afloat.

House break-ins only increase the number of gated developments with their  barking dogs outside as people lock themselves away at night – this kind of thing can destroy communities.

Jamaica’s purse has a hole in it

Golding was not happy about his pay cut

I was going to give this post the title, Jamaica’s empty purse in time for Jamaica’s budget. But then I realised that a 55 billion Jamaican dollar budget shortfall – that’s about 614 million US dollars (as far as I can work out) – well that’s a pretty big hole in the purse.  It emptied a long time ago.

The Jamaican finance minister, Audley Shaw plans on spending more – hundreds of billions of JA dollars in fact.  Where’s he going to get the money?  Well, he’s going to ask for another loan of course.  The IMF are helping out a lot of countries right now, and they’re not being as stupidly strict in the conditions they attach.

Security is on high alert to contain social unrest over his plan to raise taxes.

Passport fees have doubled, tax on gas is set to increase, Prime Minister Golding has been saying he wants to reduce the debt – good luck with that Mr Golding, in this economic climate, you’ll be lucky to keep the debt at the level it is now.

Raising taxes is not popular at the best of times, to do it when people are suffering from a downturn in tourism and other staple industries,  when people are losing their jobs and going hungry, add that to a country awash with guns where people are already murdering each other.   That’s a deadly cocktail.

Jamaican Hijack

Photo by Pat Roxborough AFP/GETTY

The hijacking of a plane at Sangster international airport is what Jamaican tourism needed like a hole in the head.

It seems the gunman – Stephen Fray who’s in his 20’s, was mentally ill – well it’s hardly something a sane person would do is it??

He boarded the Canjet plane which took off from Halifax, Canada, destined for Montego Bay and then Cuba, by forcing his way through security barriers at Sangster during the stopover. There were 182 passengers on board who were all let off in Jamaica but he kept hold of the six crew members from 11pm to 7am.

This is the worst thing that could have happened to Jamaica as it faces major economic trouble. International headlines like this could not have come at a worse time. On the bright side, at least everyone got out of it unharmed, that’s a major blessing.

Trillion Dollar Debt

Photo by PhoeniX252

Jamaica has had some welcome relief from its huge, crippling debt.  It comes from the island’s old colonial masters, the UK.   £5 mill  that’s  $645  million Jamaican dollars has been written off.

It’s reported that the British government say this should help Jamaica concentrate on spending more on its’ public services.

It would indeed be a wonderful thing if Jamaica did improve its’ health services – anyone who has been inside Kingston Public Hospital would I think whole heartedly agree with that.

But with the calls from trade unions and wage demands coming from all sides, whether the savings can be made and re-directed into areas that can benefit the people of Jamaica and improve the economy in some way, I’m afraid I am feeling sceptical about whether this can be achieved.  Here’s a useful background article.

And this looks like a useful film to go see.

The last budget is reported to show fifty per cent of every single dollar earned in Jamaica is going towards debt repayment.   It’s debt to GDP ratio is ranked the world’s 4th highest at 132 per cent.  

It seems like Jamaica owes people from everywhere – including the football association.

The fact that Jamaica is relying on countries and other bodies to suspend debt repayments signals to me that finances have never been properly looked after, can they ever break this habit of a lifetime ?

G20 – what number is Jamaica?

Probably very low down on the list of priorities (if indeed it is on the list at all) when it comes to the discussions between the 20 richest nations leaders, going on in London, is poor Jamaica.

It hasn’t stopped Jamaica’s Finance Minister Audley Shaw from trying. 

He’s been going cap in hand with his weak voice, asking for help from the inter American Development Bank. 

He has been saying that Jamaica needs more money “urgently” for investment in infrastructure and to replace all the jobs that have been lost recently in the bauxite industry and elsewhere.

He said it was essential “to put in place economic stimulus packages for small, heavily indebted, and highly vulnerable economies like Jamaica  “

I’ve been trying to blog about the vulnerability of JA’s economy here for some time, and this is the first time I’ve heard that a senior govt voice has spelled it out clearly like this.

Asking for loans on top of the debt already crippling Jamaica is probably the only thing that can be done right now.  So good luck to Mr Audley Shaw, but according to this article, he doesn’t instil much sense of hope. 

JA’s Political malaise?

I have to say I was quite surprised to read this in the Gleaner newspaper which is actually an on-point opinion piece.

It’s about the fact there were hardly any politicians – including leaders on both sides of the political divide – who bothered to turn up to Parliament – despite there being a huge raft of debates to go through and taking into account Jamaica’s pressing problems – both economic and social.

If Parliament is not taking Jamaica’s precarious situation seriously then what hope is there really?

The harder times become …

Economically speaking there are a number of ways that show how times are very bad in Jamaica and that it’s likely things are going to get even worse.

Bauxite - a knock on effect of a global downturn in car production means less demand for aluminium and alloys, hundreds of jobs have been lost in Jamaica’s bauxite industry.  Job losses also hugely in tourism, construction, finance and even at the rum factory.

Debt burden – Jamaica owes a trillion dollars in debt so government will not be able to invest in spending programmes to stimulate growth.

Remittances – some people rely on the money sent to them via Western Union and the like,  from abroad.  With relatives in the UK and the US losing their jobs and tightening their belts, less money is coming in this way.

Food prices – going up.  Imports continue to outstrip exports see details on this here This makes the cost of living extremely high.

Personal stories of hardship are not unfamiliar in a place which has always experienced terrible poverty.  Perhaps the new story of hardship in 2009 is that it is effecting the people who had previously thought of themselves as doing OK, who were holding their heads above water – who did have a job and regular income, who are living in the new build properties but who are now facing huge uncertainty.

Jamaica’s drug economy

There’s a TV programme on UK cable, called UK Border Force which is a reality show that shows the people caught at UK airports with drugs in their bags or on immigration violations.  I was talking to a friend about how people on there must be crazy to attempt it, knowing how tight security at airports is nowadays.  One man on the programme was carrying drugs on his body and was carrying a false passport – now he might be extremely stupid but it’s much more likely that he was doing it under duress and was actually just extremely desperate.

So it seems is the case for more people now that the economy is under great strain in Jamaica.  A senior Jamaican policeman – Carlton Wilson tells the Sunday Gleaner how he thinks that,

Drug-smuggling is a lucrative business and with the economic meltdown, more couriers are trying to move drugs out in small portions

see full article

It certainly does follow common sense that desperate times lead to people taking desperate measures, but a while back now I did a report on when the hugely sensitive ion scanners were put in at Norman Manley airport – they were an effective deterrent, but one of the latest seizures involved an accomplice at the airport.  With the economic situation as it is, the capacity for airport bribery is surely much more pronounced.

Always interesting to hear from people who feel these measures might persuade them to take what is a reduced risk of getting caught to deliver drugs from A to B.  Life is all about connections and if you know people who can hook you up to earn extra cash this way then it is no wonder that reported cases are rising.

What else is economic desperation leading Jamaican people on the breadline to do?

Rum lay offs

The US is shedding its car industry staff, the UK’s unemployment increases as high street shops there go bust, Jamaica is laying off workers at the wray and nephew rum factory – god, things must really be bad in JA!!

If ever there were a sign that the Jamaican economy is in serious trouble this is it!

46 workers are reported to have been laid off just before Christmas and they have been protesting outside the factory.  Angry scenes prompted the police to come out and calm the situation.

It is indeed a sorry state of affairs.  Usually in times of downturn, alcohol sales increase as people look to drown their sorrows!  But I imagine that the dent in tourism to Jamaica is largely to blame for the decreasing sales figures of rum.

The workers are complaining that the unions were not consulted and some have been in service for 10-15 years and are not happy with their settlement or the timing of this decision.

Maybe the government of Jamaica should be considering a bailout plan!?