Joey Issa Ponders: Could Jamaica’s Poverty.

Joey Issa Ponders: Could Jamaica’s Poverty, Inequality and Crime be Lasting Ills of Long History of IMF Austerity?

Despite the meager growth experienced by Jamaica last year that is being attributed to its current relations with the International Monetary Fund (IMF), Businessman and former President of the St. Ann Chamber of Commerce Joe Issa, has said in an interview that the country’s rate of poverty, inequality and crime could be the result of 30 years of austerity measures under the IMF.

It’s not the first time that Issa is questioning the relationship between IMF’s neoliberal austerity policies and Jamaica’s high rates of poverty, inequality and crime, in recognition of which he said in an article titled, “IMF: Jamaica’s Achilles Heels”, that “if Prime Minister Holness has his way he will finish the never-ending story of Jamaica and the IMF. Close books!”

He lamented then, that “after some 15 agreements with the IMF spanning 30 years Jamaica has gotten worse…there’s still so much poverty, inequality and crime in the country…the policies have not benefitted Jamaica,” a fact that has also been alluded to in a yahoo article which said “despite Jamaica having little choice but to go to the IMF, the policy prescription could not work for such a structurally dependent economy.”

It said in the context of the contrasting policies of the JLP and PNP in the 1970s and 1980s, “both Manley and Seaga were caught between a rock and a hard place between the needs of the people on the one hand and the pressure of liberal economics on the other.”

Now, Issa and others have been joined by no less than IMF’s own economists, who are questioning the faith which has been put in austerity and neoliberal doctrine, said an AFP article in the Observer.

They said neoliberalism, the market-guided economic doctrine which the IMF hails as boosting poverty and inequality has not only been overstated, but can have its own lasting ill effects on developing countries.

Their views are said to “offer support to legions of critics in countries like Greece and Portugal that have endured tough IMF-designed “austerity” programmes to straighten out their finances.”

“The benefits of some policies that are an important part of the neoliberal agenda appear to have been somewhat overplayed…Instead of delivering growth, some neoliberal policies have increased inequality, in turn jeopardising durable expansion,” they are quoted as saying in this month’s edition of IMF’s Finance & Development magazine.

‘They argue that “the traditional approach to helping countries build their economies through tight government spending, privatisation, freer trade and open capital flows can have “prominent” costs in terms of greater inequality…Increased inequality in turn hurts the level and sustainability of growth…Even if growth is the sole or main purpose of the neoliberal agenda, advocates of that agenda still need to pay attention to the distributional effects.”

Noting that “there is much to cheer in the neoliberal agenda”, they cited two key doctrines as problems: removing all restrictions on capital movement, and implementing budget austerity on governments with unsustainable deficits and debt.

And while acknowledging the great benefits of incoming capital to a developing country, the three research economists say “freed of constraints, foreign capital can be short-term and capricious, causing great volatility in markets and raising the odds of a crash.” This is said to have happened to 20% of 150 cases since 1980, whereby emerging economies which experienced a sharp surge in capital inflows, ended with a financial crisis.