LIFE AND DEBT: Travel and Tourism Debrief

1. LIFE AND DEBT:Travel and TourismDebrief Maharaj 2014

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

3. Jamaica: A briefhistory • 1655: English occupied Jamaica and created agricultural-basedeconomy (slave labour) to support progress in England • 18th Century: sugar cane export wasvery profitable • 1807: abolition of slave trade= no more sugar cane exports, followed by seriousdrought (no rain) • 1865: Gem of the Caribbean, alot of money and resourcessupplied to Jamaica

4. Great Depression (1930s): Britainpromised to support Jamaicabecauseitwasveryvaluable to them • BUT… fundswere not implemented to deal withJamaica’sstructural problems • Theydidn’t have the technology or knowledge to continue withoutBritian’sinvolvement

5. AfterindependancefromBritain—Britain no longer supportedJamaica, theyhad to stand on theirownfeet • Reality hit--- already super dependent on importedgoods– highcost of spending, hard relationships to break • If youwent back to agricultural society= movingbackwards • MichealManleydecidedthatprogresswas key and wasmentored by Britain to use the IMF to build CREDIT • Emerging Issues: indebtedness to international lenders, especially the IMF= structural adjustmentpolicies and forced free trade • The weakness of the Jamaican dollar= due to a series of devaluationsimposed by the IMF

6. What’s the deal with the imf? • The IMF isonlyconcernedwith short-termborrowing to meetimmediateneeds of a country- the effectismore $ in the pockets of 1st world nations (U.S., Great Britain, etc.) because of highinterest rates • The World Bank wasestablished to help rebuild countries after WWII (i.e. England)- Jamaicaunder British rule

7. Post- independence: whatdidthismean? • Post independence, countries likeJamaicaquicklyrealizedtheyhadfinancial troubles becauselack of economicstrength= theyneededtime to buildtheireconomy! • 1973: hike in oilprices= a large $$ impact • Jamaicaisoil importer- went to privatebanks for loansbecausetheireconomywasalready oildependent • IMF: ‘tryto cutbackspending’

8. Pressure from the imf • Manley: feltpressured to approach IMF becauseJamaicaunable to pay for imports • Wantedrepayment plan thathelpedJamaicawithlong-termdevelopment • IMF:developmentisJamaica’sproblem • IMF: loaned $$ short termwith high interest rates, imposedheavy conditions and restrictions • Cycle of poverty

9. IMF’s conditions • 1. Budget cut-backs • 2. Devaluations in currency ($$) • 3. Interest rates undertheir control • 4. Free trade • 5. Privitization = vicious cycle, because thereis no money allocated for development of Jamaicaneconomy, no money for the betterment of the PEOPLE

10. crops • Jamaicancrops are rotting, because U.S. crops are cheaper to buy in Jamaica (CRAZY!) • IMF put pressure to open up to imports: previous measuresprevented imports, ensuringJamaicanfarmers theirownmarket (toosmall to be self-supporting)

11. Produce (think: honeydew melons) • Jamaicanproduceis more expensive ($$) becauseitisnot mechanized- “Can a machine compete with a machete?” • Produce doesn’t meet standards • “Free trade flows in one direction: toward the U.S.A.”

12. Dairyindustry • Dairyindustryhad 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

13. Abandon restrictions on imports= U.S.A. startedimportingpowderedmilk • Powderedmilk: cheap (affordable), does not spoil (for longer transportation), easierstorage • Result:Jamaicanfarmers went out of business= could no longer keep up with imports of powderedmilk; cut back on business dramatically

14. Banana industry: The LOME agreement • Jamaicaproduces90, 000 tonnes of bananas- exported to UK (former colony) • Europeanswhohad colonies in the pastwanted to givethem 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

15. 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).  

16. In Honduras, Chiquita banana workers went on strike; they were forced back to work at 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

17. 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?!)

18. ForeigncompanieswerepromisedthatJamaicanworkerswould not formunions • Unions = fight for workers • Chineseworkersimported= tension betweenJamaicanworkers and Chineseworkers- WHY? Chinesegettingpaid in US $$! • FTZs are counterproductive- factoriesnowmoving to Mexico= cheaper labour, loss of 18,000 jobs • How isJamaicagoing to repayloanstheytook out to open the FTZ?

19. Whatwas the IMF’sresponse? • 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

20. Mcdonaldization • McDonald’s couldbepurchasingJamaicanproducts- instead, theyimportthem (Why?) • McDonald’s usingcheaperimportedbeef • Resemblewhatwe have learnt about HILTON hotels and their ‘requirements’ • American ranchers use an anabolic steroid Stilbestrolthat isn't sold in Jamaica, enabling them to produce more meat more quickly (and therefore, more cheaply)= “Cancer-causing agent”

21. 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

22. Social Justice?! • Exploitation • Sub-standard conditions • Free market destroys local subsistance economy (cash economy vs. Bartar) • Westernization more desirablethan ‘stagnation’ but atwhatcost!?