Guyana may be better placed to turn the corner than Jamaica
March 10, 2004
I READ with interest Rickey Singh's commentary on the commonality of problems facing Jamaica and Guyana. This appeared in the December 28th 2003 edition of the Jamaica Observer. In it, Mr. Singh alluded to the high external debt burden and high crime rates which have plagued these two nations, and which have in part, kept their working class people relatively poor.
I consider Mr. Singh's perspective a little dated, based on recent economic news where Guyana qualified for external debt relief of some US$30.00 million a year over 10 years. Jamaica on the other hand, is creaking under internal and external debt of some JA$700 billion which now requires 65 cents out of every dollar budgeted, to service, and is drawing rebuke from international lending agencies.
Speaking at a Lions Club luncheon on January 7th in Jamaica, Dr. Omri Evans, one of that country's leading economists and statisticians, also predicted bleakness for the Jamaican economy. " Today, Jamaica's economic conditions have shown no improvement over what they were this time last year. Indeed it is my view that the IMF May 2003 report on the Jamaican economy has painted a picture of an economy that is progressively sinking into a deeper hole, under the increasing weight of a growing and expensive public debt." And so it seems, we are at the point of divergence where one nation is positioned to find its way out of an economic mess, the other is mired in it.
But even before this news was announced, the writing was on the wall. Since I started to track the Guyana economy shortly after my first visit in March 2001, the Guyana dollar has been relatively stable, experiencing only a 5.4% devaluation from US$1 = GY$185 to US$1 = GY$197. In the same period, the Jamaica dollar has eroded some 30%, from US$1 = JA$45.63 to US$1 = $59.70, 20% of which took place in 2003 alone. The devaluation of the Jamaican dollar in some cases, was structured to encourage foreign investment - a tact which has produced mixed results at best. To wage earners, currency devaluation can result in either tolerable or painful living conditions. And one suspects that the respective fallouts in the Guyana and Jamaica economies, reflect these two conditions. Last year, Guyana experienced a relatively low 5.4% inflation rate. God knows what it was in Jamaica..
But even more importantly, behind these numbers, there seems to be exist a collective psyche as vastly different as is the physical distance between these two countries. In general, Guyana seems to be a country relatively comfortable with its identity. Whereas Jamaica seems to be in a constant struggle to unshackle itself from its own identity and don a mask of which it is not. I recently saw a petition in the Jamaica asking that Halloween and Thanksgiving holidays be recognized there. No doubt to mimic the United States.
The fact that Jamaica's proximity to the United States is much closer than that of Guyana's, might well have something to do with this difference. But in of itself, this does not explain it. The Caribbean on a whole, mainly through satellite television, is washed in alien cultural images, some of which might neither be healthy nor practically applicable. But to have these images an hour and a half away from a doorstep, as they are in Jamaica's case, makes them more accessible and of course more acquirable.
To quote Ian Boyne in his column on Jamaica consumerism in the December 28th 2003 issue of the Jamaica Gleaner, "One of the greatest problems facing Jamaica today is the dominance of materialistic, consumer values. It is all the most troubling in a society like Jamaica where our productive profile is way below our material aspirations." Another Jamaican social commentator, Mark Wignall in his recent piece in the Jamaica Observer titled `A ball of confusion', lent these thoughts, "Jamaica is supposed to be a poor country and our roads are clogged with shiny, almost new cars. There are mansions on the hills that can rival any in Hollywood. Poor people have cell phones, televisions, radios refrigerators, VCRs, DVDs and chicken is had most Sundays. They party at will and the garments are not cheap by any stretch of the imagination. They hustle and scuffle and juggle and make some money, then complain that `nutten nah gwan'." Wignall ends his piece by asking, "Are we a poor nation?" He could have also asked if Jamaica's values were misplaced.
An experience I had a few years ago, tends to supports Boyne's view. On seeing a Hummer vehicle while coming from the beach in Jamaica, I questioned my Jamaican passenger, "What is a Hummer doing in Jamaica?" The response was shocking. "If you can afford it, why not buy it?" There was no connection being made between the societal impact of such a costly purchase, not to mention the imprudent use of scare foreign exchange. No wonder Jamaica has a gap between the rich and the poor which now ranks among the world's widest.
There are expensive cars in Guyana too. But contrast that image to the more common transportation sights seen in Guyana, where people cross rivers in canoes, some men ride drays and some women ride bicycles and mopeds. Guyana, out of necessity or nature, just tends to don more modesty that other places in the Caribbean. And in doing so, it is better capable of weathering, if not thriving in austere times.
The last time I saw a woman riding a bicycle in Jamaica, was in 1970. It was my dear mother, and it was just for fun. "How do we reconcile the spending on motor cars and other consumer durables with the constant bawling about hardship?" asked noted Jamaican economist Dennis Morrison in his piece on (conspicuous) consumption in the Jamaica Observer on December 24th 2003. "The real losers," he continues, "are the people at the bottom of the economic ladder who have no jobs, no skills and no generous relatives abroad."
Contrast these observations with the drive by researchers at the Institute of Private Enterprise Development (IPED), to encourage Guyanese to see themselves as producers, not merely as consumers. The Institute surfs the Internet mainly to help spur business improvement in areas such as crop storage, aquiculture, pine apple production, food processing, seasoning preservation, fish preservation and cash crop production. This emphasis on developing the micro and small business sectors in Guyana, is beginning to bear fruit. One reads of a juice plant opening here, a milk pasteurizing plant or fresh-water shrimp plant there, and so on and so forth. Just little steps in the right direction to reduce the dependence on imports, create jobs and give hope to rural communities. The 0.2% drop in the Urban Consumer Price Index (CPI) for the month of November 2003, gives credence to the fact that `producing to consume' benefits the population at large.
Guyana's over-aching thrust seems to be one of self-sufficiency, particularly in the area of agriculture. Whereas Caribbean nations, Jamaica not the least of them, have retained a penchant for in some cases, unnecessary and costly food imports. The business of farming seems to be encouraged and even embraced in Guyana. But in Jamaica, there is the tendency to scoff at this vocation. It gets one's hands `dirty', and people like Trevor Peart, a former soldier in the British and Jamaican armies who farms bananas, Irish and sweet potatoes, yams, pumpkins and legumes in Hanbury, Manchester, are more the exception than the rule. Only recently was an `Eat Jamaican' campaign started.
I must hasten to add though that farmers and manufacturers in Jamaica, with some justification, point to the high cost of producing locally. This, as noted by the Jamaica Observer's Claudienne Edwards in her December 28th, 2003 report, includes factors such interest rates (now as high as 26%), bureaucracy in government, competition from illegal imports, high utility rates and crime, and of course devaluation.
Just recently, Bobby Pottinger, a past president of the Jamaica Agricultural Society added weight to the need for a more conducive economic climate for farming. "If indeed the (Jamaica) government recognizes the importance of agriculture as one of the pillars of the economy, as well as the vehicle for rural development, then support for agriculture must reflect that view. In short, we need support."
And Mr. Pottinger is right in questioning. Because Jamaica seems more bent on structuring things to accommodate international investors, some fleeting, and mal-intentioned, as opposed to bolstering its own productive capabilities.
On this issue, Doreen Frankson, president of the Jamaica Manufacturers Association (JMA) indicates that some local manufacturers are finding it more cost effective to contract their manufacturing abroad where they can benefit from special export programmes and cheaper costs of money. Wholesales of produce, have also taken a cue. "What this means," Frankson point out, "is that Jamaica has forfeited employment, expansion of manufacturing and those sectors linked to manufacturing, increased tax earnings, and a better standard of living for Jamaicans." But against these odds, and to its credit, the JMA has launched a campaign to assist the uniform and furniture sectors to land local contracts, and more presciently, to prepare the manufacturing sector at large for operating within the Free Trade Areas of the Americas (FTAA) in 2005.
Not gone unnoticed also, has been Guyana's increasing economic and trade links with Brazil, South America's largest country. This not only establishes a partnership with one of the most dynamic and untapped markets, but in time, will create access to the entire South America as well. With the Unites States getting increasingly stringent as it's war on terror continues, this alternative market will take on new importance to Guyana's economy. Another success for Guyana has been in the area of sugar production. Guyana is now the only Caricom country and one of the few in the world which has increased it production of sugar cane. "Get accustomed to Guyanese sugar," says Patrick Manning Prime Minister of Trinidad and Tobago.
Thankfully, Jamaica can cheer about strides made in its tourism and bauxite/alumina sectors. In 2003, Jamaica arrivals were about 1.34 million, exceeding the 1.27 million for the previous year. "We have had a good end to 2003," proclaims Paul Pennicook, Director of Tourism in Jamaica. In the latter sector, Alumina Partners of Jamaica (Alpart) also had a record year in 2003 in which it produced 1,529,100 metric tonnes of alumina, surpassing the previous annual best of 1,508,500 tonnes produced in 1999, and exceeding 2002's production by 6.9%. The alumina plant in Nain, St Elizabeth, is now one of the largest foreign exchange earners for Jamaica, earning over US$100 million yearly. If only more of these monies could be directed to positively impacting the lives of the population at large. But the huge debt burden of Jamaica, is like a loadstone.
Finally Rickey Singh is correct that crime, and violence, are scourges of both societies. Having just last November attended the funeral of a high school friend gunned down as he left his business place in Kingston, Jamaica, and constantly reading about murders over petty issues in the Guyana press, I can attest to, but can posit no remedy for these social ills. Race relations get their share of airing in the Guyana press. Surprisingly to some, Jamaica has it's share of `race' problems too. More and more Jamaicans of Africa descent have been airing their concerns about indifferent treatment in the resort areas of Jamaica. And as Hughlin Boyd pointed out in his piece titled "`Foreign' Jamaicans Beware" which appeared in the November 5th 2003 issue of the Jamaica Observer, returning Jamaican residents are not only being marginalized, but being preyed upon. "It can become a nightmare for those Jamaicans who may wish to return to a mythical home." And so in Jamaica's case , it is more the same race preying upon it's own. Some Guyanese returning residents as S. Ram wrote in the January 8th Stabroek News, fear for their security. "It's the number one reason," he states.
In search of making a difference, I am keen on both countries. But the economic numbers are suggesting that Guyana might turn the corner before Jamaica does.
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