June 7, 2010 note, under the heading ‘Emerging Markets Commentary… Jamaica at a Crossroads?’ by Carl Ross, Managing Director-Investments. Carl Ross is no stranger to Jamaica. He has been on several local radio programmes over the years and has also been interviewed by local newspapers.
Here is some of what he said:
“One has to admire the political gamble of the Golding government. I have seen no previous governments in Jamaica, and very few anywhere, that have taken the political risk that Golding has now chosen. In addition to the fiscal austerity announced in the IMF program, he is upsetting the decades-long cozy political relationship between these criminal “dons” and the political class. He is willing to be one-term prime minister if he can get his country on the right track. If his plan does not work, his political career is over. If it does work, he may become a hero with a lot of political staying power, akin to Andres Uribe in Colombia.”
“The sequencing of this crime offensive, from my perspective, makes sense. Golding has been heavily criticized locally, and subjected to a no-confidence motion in parliament, for not responding to the US government’s extradition request last year. He delayed the extradition, to the consternation of the US, for the months, while the economic program was being framed with the IMF. Had this crime offensive taken place last fall when the economic program was being hammered out, I think it would have been a disaster. Coming now, after the IMF agreement has been linked, the domestic debt restructuring complete, and the peak tourism season behind them, I believe, makes it less financially destructive than it could have been.”
“Crime is strangling the economy. It is difficult to quantify the economic cost of crime and violence, but everyone agress that it is one of the key reasons for Jamaica’s chronically low growth rates. Many businesses fear remaining open after dark; a disproportionate amount of money is spent on security; tourists tend not to venture from enclaved resorts. The list of inefficiences goes on and on. Despite the domestic debt restructuring and low interest USD loans from multilaterals, Jamaica needs to grow faster in order to climb out of its debt trap”
– Carl Ross, Managing Director – Investments