Chapter 1
Non-developing Countries

 Insanity
Jamaica is not a poor country. We do not have poor countries anymore. Instead we have developing countries. Nice euphemism. So, Jamaica is a developing country. The sad fact is developing countries are not developing and Jamaica is no exception. The greatest problem these countries face is poverty. Do they have a plan to eradicate poverty in five, ten, twenty years or ever? The most likely answer is ever, which in reality means never. It has been a near impossible task despite best of intentions.

But Jamaica can do it if they follow my proposal. We have been locked into policies that have not worked and will never work. We have followed the advice of the vaunted International Monetary Fund (IMF) and other  international experts.  Right now as I write Chile and Haiti are burning because they are trying to carry out IMF requirement to obtain IMF loans.  Let me show you in this book how to get real help from the IMF instead of extortion. 

Once these international experts  told us that a country had to possess iron and coal industry to be prosperous. Not anymore.

Then these international experts told us that a country had to possess a strong manufacturing base to be prosperous. America shifted its manufacturing base to China and some other cheap labor countries. But China is becoming prosperous.  Obviously these international experts are not infallible.

Then these international experts  told Jamaica and other developing countries  that the way to prosperity was foreign investments.  Jamaica needed to increase its manufacturing base. Traditionally, to increase manufacturing, Jamaica tries to entice foreign corporations to set up there by offering tax breaks and other benefits. She has to compete with other  developing countries so they make the benefits very attractive but often at considerable expense to the country. Now, if the foreign corporation analyses the prospects and  foresees enormous profits, then it will set up in Jamaica. Jamaica will benefit with some employment and a relatively small financial gains. These gains compared to the huge profits of the foreign corporation are mere crumbs. Has this plan worked?

Well the prime  model for this plan in the Caribbean was Puerto Rico. Furthermore as a commonwealth of the United States, this was an additional advantage there. Did this plan work in Puerto Rico? Today Puerto Rico is bankrupt even before they were devastated by hurricane Maria. Government pensions are in trouble. They had to  layoff many government employees . They had to close over one hundred and seventy- nine schools in 2017 because of budget problems.  That year, Puerto Rico had $73 billion in public debt. By comparison, the U.S. city of Detroit had less than $20 billion in debt when it filed for bankruptcy in 2013, which was the biggest U.S. municipal bankruptcy ever.

So Puerto Rico had to surrender most of its already restricted autonomy to the US in order to settle its debts. They were forced to agree to The Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA), a process for restructuring debt, and expedited procedures for approving critical infrastructure projects. Through PROMESA, the US Congress established an unelected Fiscal Control Board (FCB) to oversee the debt restructuring. The FCB's approved fiscal austerity plan for 2017-2026, cut deeply into the Puerto Rican public service budget—included cuts to health care, pensions, and education—in order to repay creditors.

Although Puerto Rico was bankrupt, it was  not allowed to declare bankruptcy. In bankruptcy creditors often get a percentage of  their money owed instead of full payment. But not for PROMESA,  as creditor corporations continued to get their full monthly payments while workers bore the brunt. For example, one of the most controversial provisions of PROMESA was the reduction of the federal minimum wage from $7.25 to $4.25 an hour for workers 25 years old and younger. The last time hourly wages were this low was about 20 years ago.

Obviously this traditional plan did not work for Puerto Rico. If it did not work here, the prospects of it ever working in Jamaica or anywhere else  are dim. But, still we persist. The definition of insanity is doing the same thing over and over and expecting different results. How long shall we pursue this folly? How long, Oh Lord, how long?