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What can we learn from Jamaica?
Pain is a wonderful teacher, and in the Caribbean, few countries have experienced economic and social pain like Jamaica. That said, there’s something particularly fascinating currently taking place on the island renowned for its ackee, turquoise beaches, Blue Mountain coffee, and Bob Marley’s Legend album. For the first time in its post-independence history, Jamaica—in whole or in part—seems to be getting its economic affairs right.
In fact, if one were to look at statistics on T&T and Jamaica side by side—and not know which data belonged to what country—it would be fairly obvious to spot the island heading in the right direction and which one, perhaps, was in need of a “paradigm shift”.
There’s much that T&T can learn from the transformation taking place on the island from which out of many, emerge one people.
To tell the story of Jamaica’s ongoing economic transformation, understanding the historical state of play in the country’s economy provides the perfect backdrop. In spite of its vast reserves of bauxite, strong cultural identity, and the rich potential of its tourism and agricultural sectors, since gaining independence in August 1962, Jamaica just couldn’t seem to ever really shift into the right gear.
Indeed, the country has been one of the slowest growing economies in the world—growing on average 1.39 per cent since 1980’s.
Jamaica has also been one of the most indebted countries, with debt to GDP historically in excess of 100 per cent (in 2013, Jamaica’s debt peaked at 135 per cent of GDP).
A series of debt defaults, protracted trade imbalances, industry collapses, and general lack of fiscal discipline—along with a generous serving of social unrest—ensured that Jamaica would remain unable to live up to its full capabilities.
Put into proper perspective, to say that Jamaica suffered both self-inflicted, and external wounds would be an understatement.
But while Jamaica stumbled into and out of each successive decade, T&T—but for a blip in the 1980s—soared.
In 2010, however, with its back against the wall, Jamaica entered into an arrangement with the IMF that has since proved beneficial to the local economy.
In fact, as at September 2017, Jamaica has registered nine successive quarters of economic growth.
T&T, on the other hand, has been in a recession for the past three years.
If one were to look at the latest IMF Article IV consultations on each country, the contrast between plaudits for one (Jamaica) and not-so-subtle chastisement for the other (T&T) would be quite evident.
It came as no surprise, therefore, that at the recently concluded IMF High Level Caribbean Forum in Jamaica that the fund’s managing director Christine Lagarde made the following statement:“Jamaica is a leading example of policy commitment for other countries beyond the Caribbean. With support and sacrifice from the Jamaican people, important progress on macroeconomic stability has been made over the past four years, under two different governments.”
Lagarde’s comments sum up the essence of a cultural shift taking place in Jamaica that T&T would do well to heed.
Firstly, for the first time in its history, the people of Jamaica seem to have taken genuine ownership of the need to change as advanced by the IMF. Beyond mere rhetoric, the “support and sacrifice” from the populace that it can no longer be business as usual appears to be real.
Can the same be said of T&T?
Further, the fact that reformation efforts have transcended two different administration speaks to a degree of political maturity in the face of economic vulnerability being displayed by Jamaica’s elected leadership—another introspective moment for our own twin-island republic.
Additionally, and though not mentioned directly in her comments above, the role of the private sector in advancing Jamaica’s embryonic recovery has been quite pronounced.
The formation of three oversight bodies—the Economic Growth Council (EGC), the Economic Programme Oversight Committee (EPOC), and the Public Sector Transformation Oversight Committee (PSTOC)—with heavy involvement from Jamaican captains of industry (JMMB Group’s Keith Duncan is co-chair of the EPOC, while billionaire financier Michael Lee-Chin chairs the EGC) has fostered a sense of accountability to ensure the IMF’s mandates are met and makes certain that the voice of private sector is heard in the economic turnaround.
(As an aside, listed Jamaican companies have been the best performers on the local stock exchange reflecting, in part, an element of Jamaica’s own economic recovery.)
Beyond the typical suspicious eye of the public, the role of the private sector has been embraced—teachable moments for our own country.
Finally, the IMF itself seems to have changed in this go-around with Jamrock. The fund appears to have taken a more democratic, caring approach in dealing with Kingston as opposed to the tough, authoritarian conditions of the past.
Viewed from every angle, it’s clear that unity of purpose has been effectively sounded down and bought into by all stakeholders with an interest in Jamaica’s success.
All told, while Jamaica was forced to swallow bitter medicine, the results, to date, have proven the proverbial saying true: “it taste awful, but it works”.
T&T does not have to wait to do the same.
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