Social Science 1430/39
Introduction to International Development Studies
Professor: Miguel Gonzalez
Teaching Assistant: Sarah Akhtar
The Long Lasting Effects of the IMF on
Jamaica: What a Big Fail.
Author: Dania Al-Adhami
Student #: 213843883
Due Date : 03/16/2017
Word Count: 2232
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When we think of post-colonial countries, we often think about hope, prosperity, new
beginnings and liberation. Unfortunately, the reality of this statement does not always match our
expectations. Although countries may be liberated from their colonizers, they often remain under
the control of outside agencies. Not only can this control supress a country’s independence, but it
can also limit its economic, social, and political growth. To determine whether or not this
statement is true, this paper will specifically examine the case of post-colonial Jamaica and its
long lasting relationship with the well-known transnational institution, the IMF. This relationship
has been based on fiscal monetary policies, structural adjustment programs, and many
development promises imposed by the IMF to alleviate Jamaica’s poverty. However, just by
observing the current state of the country, it seems as if Jamaica escaped the colonization of
Britain only to be colonized by this transnational institution. By examining the economic state
of Jamaica over the past 60 years, observing how the IMF imposed its neoliberal policies on
the country, and contrasting the stated goals and actual outcomes of the structural
adjustment programs, we can see how these neoliberal policies have failed Jamaica and
essentially set its nation’s growth back.
In order to compare Jamaica before and after the intervention of the IMF, I will
have to discuss the different aspects on which the neoliberal policies have had an effect. I
will start off by showcasing the economic prosperity that Jamaica had prior to accepting the
loans from the IMF in the 1960s. I will then discuss the GDP decay, decrease of governmental
expenditure on public services, the decrease of employment, and the fiscal monetary policies
proposed by the IMF since the 1960’s and until the current days. I will be contrasting the goals
stated and the outcomes of the IMF’s structural adjustment programs by assessing their actual
impacts on the country’s human development socially, politically and economically. This
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includes looking at specific cases such as the Kingston Free Zone, globalization through
multinational companies such as McDonalds, and the failure of housing projects such as
Operation Pride. This paper will be referencing journals, articles, economic reports, as well as
documentaries that voice the opinions of different people from Jamaica such as professors,
former government officials, and most importantly, the public.
Succeeding its independence in 1962, post-colonial Jamaica was very determined to
achieve its goals of successful societal and economic development. Everyone was willing to
work together towards a new, prosperous beginning for their country. The government was
primarily concerned with providing adequate education to its citizens; as it directly lead to more
trained individuals who would help Jamaica grow (Life in Debt). The country was also
experiencing one of the highest and most rapid economic growths amongst the other developing
countries. The technologies were also advancing just as fast, with the abundance of welleducated individuals. By the end of the 1960’s, it indeed became one of the top growing
economies in the world (The Cost of Corruption). And this is particularly when the World Bank
stepped in to offer a bank loan of $9.5 Million, which was supposed to facilitate the building of
schools throughout the island. Although the loan was supposed to be for educational purposes,
the government had overruns, estimated at around $5 Million, which could have been used to
build 50 more schools. This loan was the start of an entire cycle of debts that Jamaica has been
trying to escape from, and yet has not found a way out of this strategically planned trap (The
Cost of Corruption).
The IMF’s solution was very simple to implement; pay the debts by putting yourself
in another, perhaps greater debt. This is exactly how Jamaica ended up in an unsustainable
debt which heavily damaged every corner of its economy. According to a report made by the
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Center of Economic and Policy Research in 2013, Jamaica had had a negative per capita GDP
growth of 0.1 percent since 1993. This is considered to be the lowest in the Caribbean region
following Haiti (Johnston, Jake, and Montecino 3). In addition, a report made by the same
institution in 2015, demonstrated how Jamaica remains ‘plagued by high debt and low growth’.
With an average annual GDP growth of 0.4 percent, it is near impossible for the country to
recover in the next 10 years. Therefore, one may question how it is possible for a country that
was doing so well to have an extremely severe setback that has essentially cut down any hopes of
a promising future. This is where the severe austerity of any of the IMF agreements comes into
play. Although the former Jamaican government tried to suspend one of the agreements in 2010,
the next elected government, with Prime Minister Portia Simpson-Miller, initiated a request for a
new IMF agreement in 2011. This agreement was approved upon in May 2013. In order for the
agreement to work, Jamaica was asked to limit the government’s primary balance. The
government was forced to cut its spending by ‘over 2% GDP in 2012/2013 and by 2.7% GDP in
2013/2014’. This impacted the country directly as it cut down a major source of building utilities
and public services that could have stimulated growth. The loans offered by the IMF were
evidently provided at extremely high interest rates which reached 17.3% of GDP in 2009/2010
(Johnston 2). This is equivalent to 40 cents, of every dollar, being used to pay the debt (The
Debt). The money that could be spent on growth promoting investments, is directly transferred
toward the repayment of the international loans (Johnston 1).
Certainly, with an economic crisis like Jamaica’s, unemployment rate had a rapid
increase too. In addition to cutting wages in order to adhere with the IMF agreement, many
other factors played a role in increasing the unemployment rate in Jamaica. Many farmers lost
their jobs due to the competitive market coming from the Global North. Countries such as the
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United States were sending much cheaper produce than what the local farmers of Jamaica were
selling their produce for. Farmers who depended on selling their fresh milk, were defeated by the
imported powdered milk that was sold at a much cheaper price and was capable of preserving
itself much longer than the fresh milk. Of course, farmers were forced to shut down their
businesses as they could no longer sustain themselves. Moreover, with the IMF agreement came
a promising deal under the name of the “Kingston Free Zone”. This was a proposed solution that
was meant to repay all the loans Jamaica had by 2010 (Life and Debt). It was also deceived as a
as mean of providing more employments for Jamaicans. Ironically, not only were the working
conditions extremely horrible, the companies which had control over some of the factories there,
such as Tommy Hilfiger, thought that the Jamaicans were not doing a great job in mass
productions. Therefore, they decided to bring in Asian workers that would replace the Jamaican
workers. This lead to the loss of a cumulative amount of 18,000 jobs (Life and Debt). Not only
was this deal a fraud to the Jamaican nation, but it also served as evidence on how the IMF was
not taking the responsibility of maintaining its promises.
In addition to abusing the Jamaican labour, the IMF wanted to ensure that
capitalism was taking over the country nationwide. Low wage labour only served to be one of
the means of controlling the labour forces and the income of the Jamaican individual. However,
additional measures were taken in order to ensure the growth of capitalism through mass
consumption, and an increased demand of western products. An example of this is McDonalds.
Originally, Jamaica had its own local restaurant named “McDonalds”, which served Jamaican
food. With the rise of capitalism, the American fast food chain restaurant demanded to take over
the Jamaican restaurant. It was the sign of the start of globalization. Shortly, other fast food
restaurants chains opened up and replaced Jamaican restaurants. These restaurants were known
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to use cheap meats that were imported from the United States. As a matter of fact, on one
occasion, there was a salesman that claimed to export meat for the lowest prices in the market.
When Jamaican researchers examined that shipment carefully, they found out that the meat was
very old. When the salesman was confronted, he claimed that the shipment was sent to Jamaica
by mistake. So how can the IMF hide all of these apparent attempts of imposing modernization?
Well, when the IMF is questioned about the ethical concerns of marketing such agreements, they
ruthlessly claim that this is meant to provide to Jamaicans the ability and privilege to purchase
the products everyone else is buying across the world (Life and Debt).
So what other social privileges did the IMF claim to secure in addition to mass
consumption and unemployment?
It secured violence, government corruption and an
inevitable housing crisis. With the increase of unemployment and the decrease of education, the
youth was forced to find other means of income, one being the drug trade. Since the increase of
the debt, the drug trade became one of the main sources of income for many Jamaicans. Because
of the lack of any funding going into public services such as rehabilitation centres, many young
Jamaicans were left helpless with the addiction (The Debt). Others were extremely invested in
the drug trade. This trade was not something hidden from the government. Officials knew very
well about the shipments coming into the country and leaving the country. However, nothing
much was done in that regards. It lead to many gang formations and violence among the youth.
Although this violence is not quite evident to tourists, it is definitely felt by the residents of
Jamaica. In addition to the violence through drug gangs, there was the violence from the
resistance movements. Jamaicans knew that the government was not doing what the nation
wants. People are being robbed by their own governments and the IMF, and one of the ways they
are choosing to express their frustration is through violence. Although this violence is by the
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people, it is the result of their government’s corruption. The drug trade could have been kept
under control if powers interfered and worked hard to stop it instead of facilitating these crimes
(The Debt). Hundreds of millions of dollars that were mysteriously lost could have gone to
solving many issues such as the housing crisis for example. This long lasting crisis was supposed
to have ended through “Operation Pride”, a project implemented to provide housing and
equitable opportunities to Jamaicans. However, much like any other IMF social adjustment
program that required money to be collected from people, it ended up being a corrupted project
which stole people’s money and gave it to politicians (The Cost of Corruption).
How is the Jamaican experience similar to, and different from other countries in the
region? Unfortunately, Jamaica’s experience has been the most severe case of being a postcolonial Caribbean country in debt. This was due to both the IMF loans and the government’s
corruption. In comparison to Barbados, another Caribbean country that was ruled by the United
Kingdom, Jamaica’s government failed to keep up with its prosperous goals. Barbados followed
strict growth-facilitating policies that were similar to the policies proposed by the IMF for
Jamaica. However, Barbados maintained its exchange-rate parity in order to avoid a competitive
devaluation made by developed countries. The macroeconomic decisions made by the
government of Barbados is what makes it different than Jamaica’s government, which agreed to
the policies made by the IMF even when it suppressed any hopes of growth for the nation
(Henry, Blair, and Miller 10). Another example is Cuba, a country that chose to dedicate most of
its budget towards health care and education, two services that were extremely lacking in
Jamaica. Cuba also resisted the international intervention of the IMF, World Bank, and any
support coming from the United States. This allowed the government to clearly see what its
nation wanted rather than what the international institutions wanted it to do. However, the
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negative effects of the international institutions do not stop at Jamaica. Haiti is one of the most
recent cases of the failure of international institutions. Although it was promised many
development projects, the money that was sent there ended up being the money spent on the
people that were sent there. The question which remains unanswered is whether or not Haiti is
going to become the new Jamaica.
It is quite evident how the IMF’s stated goals do not match the outcomes of each
project and agreement that has been implemented in Jamaica. In fact, this is not new news.
Manley knew it back in the 1980s and informed his nation (Deyoung par.10). However, it was a
strategically planned trap that purposely set up different policies that cornered Jamaica into
further debts through structural adjustment policies. If the IMF really intended to support
Jamaica’s growth it could have provided a debt cancellation, as opposed to pushing the country
into a cycle of endless debts. Nevertheless, if the Jamaican government puts a serious anticorruption plan, this might be the first step towards recovery. This process of recovery needs to
start locally, and then expand its way through until there is an end to all the negative impacts that
the neoliberal policies had on the Jamaican nation.
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Bibliography
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2013. Web. 6 Feb. 2017.
[2]. The Debt. Dir. Peter Rinaldo. 1990. The Debt. 26 Oct. 2015. Web. 27 Jan. 2017.
[3]. Johnston, Jake, and Juan Antonio Montecino. "Jamaica: Macroeconomic Policy, Debt and the IMF."
(n.d.): n. pag. Center for Economic and Policy Research, May 2011. Web.
[4]. Johnston, Jake "The Multilateral Debt Trap in Jamaica" (n.d.): n. pag. Center for Economic and
Policy Research, June 2013. Web.
[5]. Johnston, Jake " Partners in Austerity: Jamaica, the United States and the International Monetary
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[6]. Deyoung, Karen. "Manley's Rift With IMF Dominates Jamaican Economics." The Washington Post.
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