President Obama Visits Jamaica, But What Is His Government Doing to Jamaica’s Economy

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The international media isn’t paying much attention to President Obama’s trip to Jamaica this week, but maybe they should. The country has become a terrible example of what can happen when creditors, led by the International Monetary Fund (IMF), are able to impose harsh austerity on a trapped nation in an attempt to collect on an uncollectable debt. Since the U.S. Treasury Department decides what the IMF does in the Western Hemisphere, President Obama himself can claim responsibility for this crushing economic failure.

Per capita GDP has fallen by an average of 0.3 percent annually over the past two decades, making Jamaica the worst-performing economy in the hemisphere over this long haul. And this measures only average living standards; it is much worse at the bottom, where poverty has more than doubled since 2007, and where unemployment is currently over 14 percent, higher than it stood during the world recession. (More detail can be found here.)

Here is where President Obama could make a big difference if he wanted to allow Jamaica to have a chance at growth. In 2007 the IDB granted billions of dollars of debt cancellation to five countries in the hemisphere: Bolivia, Haiti, Honduras, Guyana, and Nicaragua. The U.S. could help arrange something similar for Jamaica (and other highly indebted Caribbean countries too) with not only the IDB but the other official creditors.

Most immediately and much more easily, President Obama could direct the U.S. Treasury Department — and therefore the IMF — to put an end to the self-defeating austerity in Jamaica and allow the economy and employment there to grow

Ironically, it is the massive amounts of aid from Venezuela, and also investment from China, that has enabled the Washington-based creditors’ cartel to squeeze Jamaica like this. According to the IMF, Venezuela has provided Jamaica aid averaging about 2.5 percent of Jamaica’s GDP over the past three years through its Petrocaribe program

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http://www.huffingtonpost.com/mark-weisbrot/president-obama-visits-ja_b_7026936.html