I refer to Clovis's cartoon in your Sunday Observer of October 14 which speaks volumes, as well as the editorial, "Small Caribbean states can't afford to follow Greece".
In reading the editorial, it would seem that the countries mentioned - Belize and Grenada - will have company in the not too distant future, as Jamaica now stands on the threshold of being labelled "failed" and also "bad debtor!" Do these words have a familiar ring to them? I recall the term used to describe the business people who got caught in the atrocities of the Finsac holocaust.
In your editorial, there are so many parallels to be drawn to the whole Finsac issue: "When a small Caribbean state defaults, it gives up the already limited leverage which is the threat of default, thereby weakening its bargaining position. To default is to give up any possibility of bargaining with creditors." In the case of the Finsac debtors, their "default" was forced upon them by government policies like high interest rates, non-provision of statements of accounts, lack of opportunity to negotiate for settlements, etc. In the case of Jamaica, the default, if and when it comes, would be self-inflicted.
So after default, creditors (IMF and other multilaterals), will make us sweat, and will now be in a position "to charge exorbitant fees to arrange a restructuring of the debt which, when accomplished, involves a new higher interest rate...". Does that also sound familiar? The only difference is that the Finsac'd debtors, having paid the higher interest rates, sold more properties and having paid again, they still have nothing to show for it.
The Finsac'd debtors who pleaded for meetings to assess and negotiate their situations, and windows of opportunity to make a living were never allowed those. Doors were - and still are - slammed in our faces. We were thrown out of our homes and businesses, some onto the streets, and left with no options for survival. Will the IMF kick Jamaica to the kerb in as harsh a way as the Finsac'd debtors were "kicked" out of our homes and businesses, with no provisions for survival?
Does the IMF think that Jamaica's problems are solely a result of the global economic crisis? I guess in time we will know.
Mr Editor, you are correct - "default is not a workable negotiating strategy for small states because the actuality of default affects no government, financial institution or financial market".
It really seems that "what goes around, comes around" and "today for me, tomorrow for you". Jamaica is about to be Finsac'd again!
Association for Finsac'd Entrepreneurs