LIFE AND DEBT:Travel and Tourism Debrief

Maharaj 2014

If you come to JAMAICA as a tourist, this is what you will see….

Jamaica: A brief history 1655: English occupied Jamaica and created

agricultural-based economy (slave labour) to support progress in England

18th Century: sugar cane export was very profitable

1807: abolition of slave trade= no more sugar cane exports, followed by serious drought (no rain)

1865: Gem of the Caribbean, alot of money and resources supplied to Jamaica

Great Depression (1930s): Britain promised to support Jamaica because it was very valuable to them

BUT… funds were not implemented to deal with Jamaica’s structural problems

They didn’t have the technology or knowledge to continue without Britian’s involvement

After independance from Britain—Britain no longer supported Jamaica, they had to stand on their own feet

Reality hit--- already super dependent on imported goods– high cost of spending, hard relationships to break

If you went back to agricultural society= moving backwards

Micheal Manley decided that progress was key and was mentored by Britain to use the IMF to build CREDIT

Emerging Issues: indebtedness to international lenders, especially the IMF= structural adjustment policies and forced free trade

The weakness of the Jamaican dollar= due to a series of devaluations imposed by the IMF

What’s the deal with the imf? The IMF is only concerned with

short-term borrowing to meet immediate needs of a country- the effect is more $ in the pockets of 1st world nations (U.S., Great Britain, etc.) because of high interest rates

The World Bank was established to help rebuild countries after WWII (i.e. England)- Jamaica under British rule

Post- independence: what did this mean?

Post independence, countries like Jamaica quickly realized they had financial troubles because lack of economic strength= they needed time to build their economy!

1973: hike in oil prices= a large $$ impact

Jamaica is oil importer- went to private banks for loans because their economy was already

oil dependent

IMF: ‘try to cutback spending’

Pressure from the imf Manley: felt pressured to approach IMF

because Jamaica unable to pay for imports Wanted repayment plan that helped

Jamaica with long-term development IMF: development is Jamaica’s problem IMF: loaned $$ short term with high

interest rates, imposed heavy conditions and restrictions Cycle of poverty

IMF’s conditions 1. Budget cut-backs 2. Devaluations in currency ($$) 3. Interest rates under their control 4. Free trade 5. Privitization

= vicious cycle, because there is no money allocated fordevelopment of Jamaican economy, no money for the betterment of the PEOPLE

crops Jamaican crops are rotting, because U.S.

crops are cheaper to buy in Jamaica (CRAZY!)

IMF put pressure to openup to imports: previousmeasures prevented imports,ensuring Jamaican farmerstheir own market (too smallto be self-supporting)

Produce (think: honeydew melons) Jamaican produce is more expensive ($

$) because it is not mechanized- “Can a machine compete with a machete?”

Produce doesn’t meet standards

“Free trade flows inone direction: towardthe U.S.A.”

Dairy industry Dairy industry had been growing in Jamaica 1992: government took out loan of $50 million from

Inter-American Development Bank to support dairy industry

Condition: had to abandon local subsidies (additional financial support to farmers, i.e. tax cuts), and abandon restrictions on imported milk products

Abandon restrictions on imports= U.S.A. started importing powdered milk

Powdered milk: cheap (affordable), does not spoil (for longer transportation), easier storage

Result: Jamaican farmers went out of business= could no longer keep up with imports of powdered milk; cut back on business dramatically

Banana industry: The LOME agreement Jamaica produces 90, 000 tonnes of

bananas- exported to UK (former colony) Europeans who had colonies in the past

wanted to give them extra help

The Lome Agreement is an agreement of African, Caribbean, and Pacific (ACP) countries with the European Union, which gave former colonies extra help in trade= guaranteed market, tariff free

Is the Lome agreement fair? U.S. (on behalf of Chiquita) went to the WTO and charged that this preferential treatment of certain countries was against WTO rules of free trade

Chiquita, Dole, and Del Monte (U.S. owned) control 95% of world banana market= most grown in Latin America under repressive and exploitive regimes; very low wages (sometimes $1/day).  

In Honduras, Chiquita banana workers went on strike; they were forced back to workat gunpoint: there are no unions to protect

workers!!

Under these conditions, the multinationals can bring their produce to market more cheaply.

Banks won’t invest in Jamaican bananas because the market is too risky

Free trade zone In the free trade zones, workers paid less than what

American workers would be paid.   Kingston Free Trade Zone (FTZ), encircled with

fencing and barbed wire, rows of factories, assembly of garments

FTZ not part of Jamaica= not subject to things like income tax, duties, not subject to any other Jamaican laws.

Don't meet the quotas= don't get paid for the work you did.  $30/week wages. 

On the job, one can't talk or go to the bathroom freely.  Workers have to pay many taxes (where is the $$ going?!)

Foreign companies were promised that Jamaican workers would not form unions Unions = fight for workers

Chinese workers imported= tension between Jamaican workers and Chinese workers- WHY? Chinese getting paid in US $$!

FTZs are counterproductive- factories now moving to Mexico= cheaper labour, loss of 18,000 jobs

How is Jamaica going to repay loans they took out to open the FTZ?

What was the IMF’s response? Director of IMF says: key to growth is to

attract foreign investment (private investors)

Manley says that private foreign investors won't provide money for some of the things the country needs: infrastructure, education, healthcare, food self-sufficiency= they are only interested in making a profit

Mcdonaldization McDonald’s could be purchasing Jamaican products-

instead, they import them (Why?) McDonald’s using cheaper imported beef

Resemble what we have learnt about HILTON hotels and their ‘requirements’

American ranchers use an anabolic steroid Stilbestrol that isn't sold in Jamaica, enabling them to produce more meat more quickly (and therefore, more cheaply)= “Cancer-causing agent”

Slavery? In slavery, the master would take the best part of the food.  Similarly, today in America, only the best parts of

the chicken are sold (the back, neck, feet, etc.), are dumped into Third World countries.  

Dark meat from U.S. being sold into Jamaica at 20 cents/lb., even though it costs 50 cents/lb. to produce, simply because it can't be sold in the U.S= Jamaican chicken farmers are suffering

Social Justice?! Exploitation Sub-standard conditions Free market destroys local subsistance

economy (cash economy vs. Bartar) Westernization more desirable than

‘stagnation’ but at what cost!?