Above: Kingston
By the Caribbean Journal staff
Jamaica’s “unsustainable public debt burden” continues to displace needed investments, preventing long-term growth, according to a new paper from the Center for Economic and Policy Research.
In 2011, Jamaica had the highest debt interest payments of any country in the world, calculated as a percentage of GDP, according to the paper.
The country’s debt, along with pro-cyclical microeconomic policies supported by the IMF, have held back the country’s recovery, according to the paper, “Update on the Jamaican Economy.”
“The IMF, World Bank, IDB and other multilateral institutions deserve a large share of the blame for Jamaica’s prolonged and ongoing economic stagnation and debt trap,” said Mark Weisbrot, co-director of the CEPR. “Their contractionary policies priorities the servicing of debt over growth and development. They have also favoured debt service over the paying of back wages, stimulus, public investment and other measures that could help Jamaica get out of the hole it’s been in.” Though debt help sevices are mandatory to get out of such a precarious condition, it is also important to look for ways to pay off wages.
The paper, written by Jake Johnston and Juan Antonio Montecino, examines Jamaica’s stalled IMF agreement, its economic performance in the last year, and its high debt burden.
While the country’s growth was positive in 2011, the current recovery is “inadequate,” according to the paper, which points to high levels of poverty and unemployment.
“Jamaica should be able to invest in infrastructure and human capital, and have the financial resources ready to be able to respond to frequent natural disasters, such as hurricanes and tropical storms,” Johnston said. “Instead, it is forced to prioritize servicing its debt, with payments that are exceptionally large, even compared with other debt-burdened nations.”