Whatever its eventual outcome, the Jamaican case is significant in light of the increasingly central role played by the I.M.F.
officials declined to discuss the Jamaican situation, but according to top Jamaican officials, the fund has moved to loosen some of its tough constraints on the economy and to provide more money to ease the country's foreign‐exchange bind, in hopes that with more time the economy will correct itself. Indications are that the failure of its belt‐tightening policies in Jamaica has prompted the fund to bend its rules ever so slightly. Accordingly, the fund strictly monitors the economic performance of its borrowers, who generally lose not only their access to the fund, but to other international lenders as well, if they violate the I.M. Credits from the fund are not only supposed to help countries during times of temporary balance‐of‐payments difficulties, but also to stimulate the adoption of soundeconomic policies that will prevent similar problems in the future. If its economic troubles are creating problems for the Jamaican Government, they are potentially highly embarrassing for the I.M.F. To shore up his eroding popular support, he is making overtures to the restive left, and to those hardest hit by the economic crisis. austerity program to Jamaicans on the ground that it would start the country moving again, is in serious political trouble. policies are supposed to bestow, this country is still ranked as one of the world's worst credit risks by commercial bankers, some of whom privately call the virtually bankrupt country a “basket case.”Įric Bell, Jamaica's moderate Finance Minister, is seriously considering resigning, and Mr. Despite or because of the I.M.F.'s recommendations, in the past year real wages have fallen by more than one‐third here consumption is down malnutrition seems to be rising, and economic growth, for the fifth straight year, negative.Īs a result, instead of winning the “seal of approval” that I.M.F. The banks’ refusal confirmed that after more than a year of strict adherence to the conservative economic policies of the International Monetary Fund, which has lent more per capita to Jamaica than to any other country in the world, the Caribbean island is stillmired in stagnation. “Commercial banks are not designed for bad weather,” he remarked later. Manley, saw it, the decision was not surprising. But after a look at the figures, disclosing that the sick Jamaican economy shows almost no signs of recovery, they decided that now was not the time for any more deals.Īs Jamaica's Prime Minister, Michael N. The bankers had already agreed to refinance more than $200 million in debt due them through 1981. On the agenda was a refinancing of the $450 million in commercial debt coming due in the early 1980's and a new loan package of $200 million. KINGSTON, Jamaica-A few weeks ago in Washington, a small group of international banks met with representatives of the Jamaican Government.