Friday, August 23, 2013

Jamaica, IMF, China and the Environment


Will Jamaica ever progress as a country, can Jamaica ever achieve any sort of economic or social progress under our current political system. I am beginning to believe we are stuck in quicksand, caught in a quagmire and being pulled with equal force from opposite ends. Our Political class and their operatives are clearly in this for selfish reasons only, the Jamaican people for the most part represents only a means to an end, we are the football on the field of life being kicked every which way till Sunday.

The purpose of all political oppositions, regardless of which party forms that opposition, is to oppose anything and everything proposed by the sitting Government regardless of which party forms that Government because the concept of bipartisan agreements, in the national interest simply does not exist in Jamaica, the Jamaican people practice and mastered the fine art of being like crab in a barrel. The PNP and their operatives when in opposition opposed every single thing the JLP Government did and the JLP and their operatives now in opposition is opposing every single thing the PNP Government is doing.

Everybody in Jamaica wants foreign Investments, they will go on and on at length about how the Government needs to attract foreign investment and foreign capital to our shores. But they only want foreign investment when their party is in power. If their party is not in power then foreign Investment is not called foreign investment but foreign sellout as they declare “look how the government a gi weh Jamaica”… The fact is, a country like Jamaica will never get foreign investment solely on our terms, we are not that cute, the Government must negotiate with potential investors and we must decide if the terms are beneficial to Jamaica and we must be prepared to walk away, if they are not.

With regards to the IMF, I have never read anywhere that said an IMF delegation came to Jamaica and beg our Government, pleaded with them on bended knees, to pretty please sign a loan agreement and they will give us money. I remember when it was announced in the 1990's that Jamaica was finally IMF free, that we had terminated our agreement with the fund, removed the shackles and regulated them to that dark place in our history.

After which we carried on without the IMF for several years until after the general election of 2007 when the new JLP Government declared that they were going back to the IMF to seek a loan. I remember my shock and horror when I first heard the news. I walked around and debated with everyone why this was a bad idea, stated that I had lived through one IMF agreement after another and how it was like hell on earth but the young pups was not having it. They proclaimed that an IMF loan was cheap, easy money and that is what Jamaica needed to recapitalize. I tried to tell them that IMF loans are never cheap, the terms are always harsh and the hurdles high but they dismissed me.

The Bruce Golding Government then signed their IMF agreement and the IMF deposited 400 million United States dollars to Jamaica's account, even before the first IMF test. It was like a carnival on that day as JLP supporters sing praises and rejoiced from the mountain tops, “Saved at last, thank god almighty we are saved at last”, even young PNP supporters were happy as pigs in shit because they also had never experienced IMF Austerity before. Another 400+ million United States dollars was also deposited from various other international financial institutions based on agreements between these institutions and the IMF, Jamaica was rolling in money, like a crack whore with free access to drugs in a Colombian drug lab.

The exchange rate which was rising at the time before the huge IMF financial payout immediately began to fall as the supply of borrowed United States dollars flood the market. Imports became cheaper and cheaper as Jamaicans looked to the heavens and shouted “Thank You Fada!” as they splurged like there was no tomorrow. They imported everything and anything, from Human Feces Fertilizer, to Range Rover, Blackberry, to Beef patty, Banana Chips, Hennessey, onion and red peas not to mention water from Trinidad. Given the choice between eating local food and eating imported food, Jamaicans will almost always choose imported food and it got so bad that no one was buying food from Jamaica’s farmers anymore. There was a glut of cheap local food on the market as the people imported Kale and Jolly Green Giant spinach over home grown callaloo. It was then that the Minister of Agriculture decided to start the “Eat what you grow program” to help out the farmers…


However when the time came for the then government to implement the IMF agreement they choked, I can only assume that the Government either did not read the agreement or had no intention of implementing anything, like a purse snatcher in a crowded market, it seems they intended to grab the money and make a run for it. I will never understand reading an agreement, signing an agreement and then breaking the agreement you singed but that is what the Government did. I would think that if the agreement was not to your liking then you would not have signed it BUT the pull of cheap US $800 Million was too great and election was upon them and with US $800 million the Government thought they could create a matrix like illusion of progress in order to win the next general election. Anyway Jamaica failed their first IMF test and the entire agreement broke down, the general election was called and the JLP lost, so out went one set of morons and in comes the next set of idiots.

The Peoples National Party promised the people a different path but ended up right back on the same path as the previous Government, back into bed with the IMF, on bended kneels asking for forgiveness and a new deal with a promise to implement the agreement to the letter this time around. By now the IMF had learned a valuable lesson based on their experience with the last Government... that you never, ever, ever give Jamaica a big lump sum of money based on promises..., no big money let off. This time it was going to be different, the IMF would deliver the money in small drips but only after Jamaica jump over a series of hurdles and water obstacles, no more hundreds of millions but a 20 million here and a 30 million there... lunch money.

First IMF Test Results under the Second IMF Agreement

Today August 22nd, 2013 it was announced that Jamaica had passed the first IMF test, we cleared the first couple of hurdle with only 295 to go. The IMF declared that they will now deposit another 30 million United States Dollars into Jamaica’s account, which should go down like honey and pass through Jamaica like laxative. As a result of the IMF Austerity measures Jamaica's exchange rate is now 102 to 1, this however is by design since the IMF wants the exchange rate to reach a more realistic position and not propped up by borrowed money, however based on what I am hearing, I believe this did not go as far enough for them but it will do for now because various IMF news reports stated that in real terms Jamaica’s exchange rate should be around 120 to 1, due to the lack of economic activity. I suspect that it will be around 105 to 1 by November unless we experience some growth and earn some hard cash soon.

In other news imports are down, this also is by design and part of the IMF’s import substitution strategy, since Imports are now more expensive as a result of the high exchange rate. The hope here is that people will begin to consume local output, support local production and grow the economy. Austerity measures almost always come with a price and as a result of cuts in Government expenditure Jamaica's economic activity is estimated to have contracted by 0.7 per cent, …“it was the fifth consecutive quarter of negative growth, indicating that the Jamaican economy continues to be in recession, with little expectation of growth beyond 0.5 per cent for the remainder of fiscal year 2013-14.”... The Unemployment rate increased to 16.3 per cent at the end of April and inflation increased to 9.7 per cent in July. However the net international reserves increased to just over US$1 billion by the end of June.

Jamaica Outperforms Projections - IMF
At the same time, the mission, which conducted the first quarterly review under the four-year extended fund facility (EFF) during the past week, reported yesterday that Jamaica's fiscal performance for the last financial year and the first quarter of the current year outperformed projections despite declines in several key areas.

Jamaica At The Bottom Of The Economic Pile: Aubyn Hill, financial gleaner COLUMNIST
Jamaica's imports still far outstrips our exports, As a country, we appear to be unwilling to curb our desire for foreign cars, clothes, hairpieces, flour and rice, and we continue to produce less and less for export.

Calls for a Jamaican Spring

I am seeing more and more partisan diehard supporters posting that what Jamaica need is some of what is happening in the Middle East, as if what is happening in the Middle East is a good thing. The Arab Spring is really a Arab Nightmare with hundreds of thousands of men, women and children killed, forced to be refugees and the region in a state of permanent perpetual civil war, yet people are talking about this is what Jamaica needs. Some of these young people are idiots with no concept of their own history because I have lived through many years of Jamaican protest and let me tell you, it is not pretty.

Yes back in the days we use to have peaceful political protest, I remember being involved in a couple of them myself, you write up some plaque cards and march to JBC where you deliver your message peacefully but at some point in our history the meaning of a protest was changed to mean a full scale riot and criminality. A politically motivated protest these days means unleash the Kraken, release the dogs of war, as smoke bellows up from the city, shots fly everywhere, stores looted, people murdered, beaten, roads blocked and people charged a toll for passage at gun point. Communities are held hostages, light post chopped down and everyone plunged into darkness with every intersection blocked with old cars and burning tires.

So you young whipper snappers be very careful what you wish for because you just might get it, especially when Jamaicans love to emulate the world’s most dangerous unstable hotspots. You might just start something you cannot reverse because the last time I checked both parties have almost equal numbers of diehard cut throat murderers and what happen if no one is willing to back down and ready to go toe to toe for a prolong period of time. Not to mention you cannot get blood out of a stone, no amount of protest can create money that only comes from hard work.

Mission to China

The Prime Minister and her delegation are in China on a one week official states visit to negotiate some deals and sign some agreements. It was announced today that several bilateral agreements was signed by both Governments.
  1. China would like to use Jamaica as a Logistic Hub to take advantage of the expanded Panama Canal when it opens in 2015 and a gateway to the region.
  2. China would like to build a multi-billion-dollar Logistic Hub and a new Port in the Portland Bight Protected Area on the Goat Islands. The Government has insisted that the project will provide thousands of much-needed jobs. The preliminary estimates for this mega investment are between US$1.2 billion and US$1.5 billion.
  3. An Agreement was signed and China will invest into several infrastructure projects paving the way for the flow of funds under the US$350 million Major Infrastructure Development Programme.
  4. The Government also inked an a agreement on economic and technical cooperation, which will see China providing Jamaica with a 100 million yuan (US$14.2 million) grant, in aid to Jamaica.
  5. China agreed to build two infant schools, one in Tower Hill, St Andrew, and the other at Morant Estate, St Thomas.
  6. China agreed to dispatch a technical group to Jamaica for feasibility study on a teaching building project at the Confucius Institute on Mona Campus, University of the West Indies.
  7. China will teach the members of the PNP administration the Drunken Master Kung Fu style and Roger "Po" Clark will be the Dragon Warrior.
Where we should come together in the national interest we are fighting among ourselves. I firmly believe the opposition should have been with the Government in China negotiating in the national interest from a Jamaica first approach but we are not wired that way.


Not Even the Great United States is Immune to China
"In much of America, Chinese investment is quietly booming, with over $10.5 billion of deals by Chinese companies in the United States so far this year, 2013 is on pace to be the largest year ever for mergers and acquisitions of U.S. firms by Chinese companies, according to Thomson Reuters data."



Human Development vs. the Environment

China have identified two location for the construction of the Logistic Hub and Minister Robert Pickersgill announced that consideration is now being given for the use of Goat Island One and Two as the site of the hub. They were first offered Fort Augusta but rejected it declaring that the area was too small, they wanted 3,000 acres of land to build the port and mega centre.

The problem is, these are environmentally protected areas and Environmental groups have announced that they will not give them up without a fight and are prepared to take the government to court. The Government declared these areas a protected site some years ago but now has come full circle on the matter. This project is huge and the environmental impact deep and destructive, flattening one island and using the 70 feet hill to dump up the wetlands between the two islands making one big mega island, where is sharknado when you need him.

The Lush Goat Island
I consider myself a soldier in the war to protect the environment and I normally give the Jamaica Environment Trust the benefit of the doubt, they have earned my trust, so if they say no way, hands off then I am inclined to side with them and fight to protect this area. We must find the right balance between the need for Human Development and preservation of the environment, I do understand that we must sacrifice some of our environment in the interest of human development, growth and employment but where do we draw that line?
Goat Island

This is not like the Aluminum red mud lake byproduct, which already exist, is toxic and serves no purpose… These are rich environmental locations full of life that needs to be protected. I do understand that people need work, poverty needs to be addressed but should we give up some of the environment to achieve this? A big part of me says no. I just wish the debate was free of politics, everyone trying to score political point and not acting in the best interest of Jamaica. As far as I am concern if you are political then you are by nature contradictory and hypocritical and being for or against an issue is based on Political Parties and not on principles, if you support an issue or is against an issue out of principle then politics is irrelevant. The pros and cons regarding this issue must be made available for all to see and to evaluate but in the mean time I am in Environmentalist mode.
China Idea of Development

Demystifying The Logistics Hub
Minister of industry, investment and commerce, Anthony Hylton has shrugged off sceptics of the much-touted logistics hub, saying there are investors willing to pump huge sums into the US$8 billion project.

 In China the fish floats to the top
 The average Chinese lungs has evolved to breath in everything else but pure fresh air

China is not a country that cares about the environment nor are they acting in Jamaica’s best interest, well none of these types of countries ever acted in Jamaica’s best interest, certainly not the United States of America or Great Britain. We are old enough, have been on this earth long enough to know that we are only a means to an end, their end. We have lived through Slavery, Colonization and the Cold War and have been used and abused by these blood sucking first world countries at one time or another. So every one of us knows that China is looking out for China’s best interest and this is a negotiation, the government must fight for Jamaica's interest, we know we must give up somethings but we must also get somethings from the deal and the cost cannot be too much, we must be prepared to walk away.

If we appear too needy and cheap then we will be used like a crack whore who has not gotten her last fix for some time and right now our Government is needy, hurting, emotional, sensitive and fearful, yes people our Government is a Crack Whore who have not hit that pipe for some time now and will do just about anything for a quick fix.

Selling Our Birthright: Peter Espeut
The Chinese have declared the Goat Islands to be their preferred site to establish a huge port and logistics hub. The discussions have taken place in secret, but the scuttlebutt is that Great Goat Island is to be levelled, and the 100m-high hill pushed into the sea to cover the wetlands between them, and to create a huge island on which the logistics hub will be built.

 The Chinese version of Hellshire Beach

When it comes to the environment the average Chinese would live on Saturn’s moon Titan and suck Methane for money so I would never listen to the Chinese when it comes to the Environment.



4 comments:

  1. Thank you with all my heart for this article. It's absolutely crucial that we all galvanize our efforts to make sure that there will be a future for the coming generations in Jamaica. Thank you. Bless

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  2. How would the logistic hub negatively affect the economy

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  3. The concept of the Logistic Hub should not affect us negatively, if it is managed and implemented properly. I am against using Goat Island but not against the HUB. Everything depends on the terms of the agreement, the balance between what we are willing to give up and what we are going to get both in the short and long-term and without seeing the terms it is difficult to declare out it will affect us…

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