IMF Blackmails Jamaica
As Jamaica continues recovery efforts following the widespread destruction caused by Hurricane Melissa, attention has turned to the financing behind the country’s reconstruction. In December, the Jamaican government secured a US $6.7 billion international loan package, led by the International Monetary Fund (IMF), to support rebuilding and economic stabilization.
Jamaica secured the $6.7 billion loan in December to help rebuild after Hurricane Melissa. With damages estimated at $8.8 billion, the loan doesn’t cover the full extent of reconstruction and will likely become due before it is complete. This is only one problem likely to surface under such massive debt.
“Debt is a powerful tool used by creditors to dominate, exploit and plunder indebted third world countries,” writes the Committee for the Abolition of Third World Debt. “It is a major obstacle in the way of people’s sovereignty and their economic, social and cultural rights.”
The IMF uses a carrot and stick process of offering huge amounts of money that the country obviously cannot afford to repay. What results is a barely concealed financial disaster.
“Severe austerity measures” are what the IMF imposes when a country defaults. Higher taxes and fewer social programs are forced upon nations to help shuttle funds into loan repayment. Under these measures, populations suffer “disruption of livelihoods, rising poverty, food insecurity,” with the youth suffering the most. This scenario was seen specifically in Sri Lanka and noted in the Daily Mirror Lanka, where the author called it plain blackmail in 2024. It is unclear what routes Sri Lanka will currently take to repay the debt after being destroyed by the winter cyclone.
The IMF’s use of strong-arm tactics in developing nations isn’t new. In 2010, Stephanie Jacquemont, representative in Pakistan of the Belgium-based civil society organisation, CADTM, “urged the masses in Pakistan to force their government to stop repayment of foreign debts as the country was not at all in a position to pay off the debts because of the colossal losses caused by the recent worst-ever floods in its history.”
Still the IMF gives good news about the island nation: “Jamaica is well-positioned not only to restore what was lost but also to strengthen its resilience to future disasters.”
Upon announcement of the success of the loan package to Jamaica, the IMF doubtfully says, “Continued partnership and innovation will remain central as Jamaica charts a stronger, more resilient future for all its citizens.”
IP Editorial Board