The IMF and Jamaica’s Debt Problem
Each year the stretched Jamaican health sector witnesses the loss of 8 per cent of its general nurses and 20 per cent of its specialist nurses as they make their way to richer countries. Whilst the motivation for migration varies, the decision to seek employment overseas can only be made easier by the uncertainty surrounding the treatment and payment of health care workers created by public financial limitations.
The absence of qualified health care providers is made even more significant considering Jamaica’s struggle to meet health related Millennium Development Goals. However, the health sector is only one of several institutions which have come to suffer under Jamaica’s enormous debt burden and the policies implemented to tackle financial strife.
Jamaica’s debt to the rest of the world increased by a third during the financial crisis, and now stands at more than £1,800 per person. The Jamaican government spends £240 per person in debt repayments each year, more than it spends on education (£130) and health (£60) combined. With an annual income per person of £2,900, Jamaica has never been considered for debt cancellation because it ‘is not poor enough’.
In a new report detailing the role of the IMF in Jamaica’s debt problem, Jake Johnston and Juan Antonio Montecino from the Center for Economic and Policy Research (CEPR) suggest that such social and economic difficulties have been greatly agitated by the conditions recommended by the IMF in return for loans. In particular, curbs on the wage bill, tax increases, public spending cuts and financial liberalisation have all been accused of stemming financial and social progress.
The recent global recession brought Jamaica to the brink of insolvency, whilst interest payments were costing 65 per cent of tax revenues. Jamaica is now borrowing more money from the IMF to stay afloat. One of the IMF’s conditions is a three-year wage freeze for public sector workers, which the Jamaican Supreme Court has declared illegal as it breaks previous commitments. Given current and predicted inflation rates in the Caribbean island, the freeze is likely to amount to an effective 25 per cent cut in incomes.
Mark Weisbrot, Co-Director of CEPR explains, "Jamaica is a clear case where the IMF and other international actors have put the economy in a strait-jacket…Jamaica needs debt cancellation and economic stimulus to get out of its long slump, and it has not gotten either of these."
For more information on Jamaica’s unjust debt click here