"Life and Debt"
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“Life and Debt” excerpt—A film by Stephanie Black—2001
Narrator—If you come to Jamaica as a tourist, this is what you will see. If you come by airplane you will certainly land in Montego Bay, and certainly not in Kingston.
You are thinking of the hard and cold and long days you spent working, earning money so that you could stay in this place, Jamaica, where the sun must always shine, where the climate is hot and dry—at least for the 4 to 10 days you will stay here. You are indifferent to the fact that you can enter this country simply by showing your driver’s license. You are indifferent to this fact because you can travel anywhere. The thought that a citizen of Jamaica would have to give an exhaustive account of how and why they have lived to visit your native country must never cross your mind. Since you’re a tourist, you do not travel with stacks of cardboard boxes containing much needed cheap clothes and food for relatives. You move through customs swiftly, you move through customs with ease. Your bags are not searched. On your way out of the airport you stop to make an exchange of money. You are excited by the large sheaf of Jamaican dollars you get in exchange for your $20. You have not yet been to a shop to see how little your money can buy. It would not occur to you that the weakness of your newly traded money is a result of many devaluations imposed by the International Monetary Fund (IMF).
TV announcer—The International Monetary Fund (IMF) is urging Jamaica to reverse the declining fiscal deficit as a catalyst for economic growth.
Michael Manley, former Prime Minister of Jamaica—To understand the IMF it is best to go back to history. Welcome to 1944. The war is coming nearer to an end. The allies were determined not to have the war finish and end up in the mess of the 1930s.
The key institution set up was the International Monetary Fund (IMF), and the purpose of the fund was to have a bank they could turn to for short-term borrowing to serve the short-term trading interests of the winners of the war. At the same time they set up the World Bank to provide capital for the rebuilding on Europe. You have to remember what we now know as the Third World didn’t exist. There were a few major powers, each of which had a large empire. We had no voice, we had no presence, we were just a part of somebody else’s power structure. You ask in whose interests [does the IMF work], I ask who set it up.
Narrator—You are driving on a road and it is called the Queen’s Highway. When it was built we were ruled over by something called a Queen. We do not have a Queen anymore. When we wished for independence from Great Britian we had something else in mind, we cannot now remember what that was. So you can imagine how I felt when one day driving on the Queen’s Highway I asked myself, Is the Jamaica that I see before me self-ruled, a worse off place than it was when it was dominated by the bad-minded English?
Michael Manley, former Prime Minister of Jamaica—Countries like Jamaica found that when they became free they soon were in every kind of financial problem because they didn’t have the economic strength to shall we say make it on their own. They needed time to build economies that could then make it in the world...
Come 1973, there is a world convulsion caused by the oil price increases. All of a sudden we are having to find sums of money we never dreamed of before just to make ends meet. Now what can you do? First of all, you go to the private banking system, and you say well, can I can a private banking loan? Because I’m strapped for cash and I need some support and I’m having trouble paying my overseas bills.
Stanley Fischer, Deputy Director, IMF—When the private banks won’t lend to you then you got to do something if you’re the leader of a country, and typically what you go to do is to cut back your spending in some way and try to get more money so that the impact of the those cutbacks are not as severe as the otherwise would be, and it’s at that point that you generally come to the IMF…
Michael Manley, former Prime Minister of Jamaica—Bear in mind, this is a country literally beginning to unravel because it cannot finance what it needs because you can’t have penicillin in the hospital, you can’t have wheat to make bread.
Deputy Director, IMF—And we would say yes that’s true, we understand the crisis you’re in and we need to fix the underlying reasons for that crisis, and so here is what we think needs doing.
Michael Manley, former Prime Minister of Jamaica—What you really need is to sit down with them and say look, can I work out a five-year program, and in the meantime I am strapped for some cash so can you help me up front get out of the cash bind and put it in the context of a long-term development plan. And they say, “No, long-term development is your problem. We are here only to see who do you owe the money to, why are you in a bind, and we’ll lend you some money in a very short time frame at full interest rates, to get you out of the bind.” And they then impose on you tremendous restrictions on what you can spend.
Deputy Director, IMF—And then we reach agreement on the set of measures [“Structural Adjustment Policy”]: On the budget, on the exchange rate, on monetary policy, on interest rates, on banks, maybe privatization, and say yes, we think that maybe this could solve your problem.
Michael Manley, former Prime Minister of Jamaica—And you say to them but if I do it that way when I finish repaying you I’m gonna be in the bind all over because this can’t solve my problem. They say, “Not our problem.”
Narrator—You pass a building stranded in an acre of overgrown grass and you think to yourself that its very existence must fall under the Department of Health. It is an outhouse, a public latrine. But when you look again, you see a sign that proclaims this building as a school. The sign says, “Basic School,” and what could that mean, Basic School? But before you can occupy yourself with this question your heart skips a beat for your driver has decided to overtake the car in front of him. It would cause your heart to skip more than a beat if you knew there was not a hospital nearby. That no new hospitals have been built in Jamaica for many years now should not concern you, you’re on your holiday!
Dr. Michael Witter, Professor of Economics, Univ. of West Indies—The whole idea was to set conditions that the government could not meet. And when the government failed to meet you would have to renegotiate a new loan in which conditions became tighter. So the IMF didn’t say, “Cut out this education program or cut out this health program”—what the IMF said is, “You must spend only so much money on health and education.” And the implication of that is that you had to cut out some programs.
Essentially what the IMF wanted us to do was to devalue our currency. That’s the first thing, to make our dollar cheaper.
Deputy Director, IMF—They needed to expand their exports and diminish their imports and the best way to do that is to make foreign currency more expensive.
Dr. Michael Witter, Professor of Economics, Univ. of West Indies—And since our society is so heavily dependent on imported food, imported fuel, imported books to go to school, imported medicine, when we devalue the cost of those things we import go up for the citizens. And as a result the economy today is much more under the control of foreigners, not necessarily through direct ownership, but through the mechanism of debt. In the 1970s we owed $800 million by the end of the 1980s we owed $4 billion. Nowadays we owe $7 billion. So the debt is rising and all the time the debt is rising our capacity to export, to produce, is getting less.