Stiglitz' loose talk again

Brad De Long delong at econ.Berkeley.EDU
Fri Jul 3 20:14:07 PDT 1998

>Brad De Long:
>> A while ago you told a story about the Manley government in Jamaica
>> negotiating with the IMF for a structural adjustment loan. If that loan
>> didn't "help", why did they negotiate for it? Why not simply spurn all
>> connections with the IMF if all it does is help foreign creditors and
>> industrialists?
>in the years between 1973-76, Michael Manley and the People's National
>Party (PNP) sought new diplomatic relations, moved towards international
>non-alignment, called for a new international economic order,
>implemented redistribution policies, and began to assert national
>control over the economy...
>foreign investment declined $200 million, bauxite production declined
>36% with a reduction of $54 million in revenue, and a US sponsored
>boycott of the tourism industry resulted in a 50% loss of the nation's
>leading source of foreign exchange...

Not to mention the tripling of world oil prices after the 1973 Yom Kippur War. Making aluminum is one of the most energy-consuming industrial processes their is, and Jamaica's other key export besides tourism--bauxite--was aluminum ore.

Manley was elected at just the moment that the world economy was about to deliver an absolutely devastating blow to Jamaica's capacity to import--and to Jamaican standards of living...

Brad DeLong

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