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Partners in Austerity: Jamaica, the United States and the International Monetary Fund

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  • Jake Johnston

Abstract

This paper looks at Jamaica’s ongoing relationship with the International Monetary Fund and multilateral development banks, its recent economic performance and the impact on development of a persistently high debt burden. It finds that after 20 years of negative average annual per capita GDP growth, Jamaica continues to be plagued by high debt and low growth. Now in the third year of an IMF-backed economic program, Jamaica is running the most austere budget in the world, with a primary surplus of 7.5 percent of GDP. After two debt restructurings, both as preconditions to receiving IMF support, Jamaica still has a debt-to-GDP ratio of nearly 140 percent, and net flows from multilateral banks turned negative for two consecutive years. The paper finds that multilateral debt relief may be necessary for Jamaica to escape from its unsustainable debt burden, low-growth trap.

Suggested Citation

  • Jake Johnston, 2015. "Partners in Austerity: Jamaica, the United States and the International Monetary Fund," CEPR Reports and Issue Briefs 2015-09, Center for Economic and Policy Research (CEPR).
    • Handle: RePEc:epo:papers:2015-09
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    File URL: http://www.cepr.net/documents/Jamaica_04-2015.pdf
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    References listed on IDEAS

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    1. International Monetary Fund, 2015. "Jamaica: Seventh Review Under the Extended Fund Facility and Request for Modification of Performance Criteria-Staff Report; Press Release; and Statement by the Executive Director for Jamaica," IMF Staff Country Reports 2015/095, International Monetary Fund.
    2. International Monetary Fund, 2015. "Spain: Staff Report for the 2015 Article IV Consultation - Press Release; Staff Report; and Statement by the Executive Director for Spain," IMF Staff Country Reports 2015/232, International Monetary Fund.
    3. International Monetary Fund, 2015. "Pakistan: Sixth Review Under the Extended Arrangement and Modification of Performance Criteria-Staff Report; Press Release; and Statement by the Executive Director for Pakistan," IMF Staff Country Reports 2015/096, International Monetary Fund.
    4. International Monetary Fund, 2013. "Jamaica: First Review Under the Extended Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria," IMF Staff Country Reports 2013/304, International Monetary Fund.
    5. International Monetary Fund, 2013. "Samoa: Request for Disbursement Under the Rapid Credit Facility-Staff Report; Staff Supplement; Press Release on the Executive Board Discussion; and Statement by the Executive Director for Samoa," IMF Staff Country Reports 2013/162, International Monetary Fund.
    6. International Monetary Fund, 2013. "Portugal: Seventh Review Under the Extended Arrangement and Request for Modification of End-June Performance Criteria—Staff Report; Press Release on the Executive Board Discussion; and Statement by th," IMF Staff Country Reports 2013/160, International Monetary Fund.
    7. Juan Montecino & Jake Johnson, 2012. "Update on the Jamaican Economy," CEPR Reports and Issue Briefs 2012-15, Center for Economic and Policy Research (CEPR).
    8. International Monetary Fund, 2015. "Jamaica: Tenth Review Under the Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director f," IMF Staff Country Reports 2015/343, International Monetary Fund.
    9. Congressional Budget Office, 2014. "Long-Term Implications of the 2015 Future Years Defense Program," Reports 49483, Congressional Budget Office.
    10. Congressional Budget Office, 2014. "Long-Term Implications of the 2015 Future Years Defense Program," Reports 49483, Congressional Budget Office.
    11. International Monetary Fund, 2015. "Cambodia: 2015 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Cambodia," IMF Staff Country Reports 2015/307, International Monetary Fund.
    12. International Monetary Fund, 2015. "Jamaica: Ninth Review Under the Arrangement Under the Extended Fund Facility and Request for Modification of Performance Criteria-Press Release; Staff Report; and Statement by the Executive Director f," IMF Staff Country Reports 2015/270, International Monetary Fund.
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    More about this item

    Keywords

    Jamaica; IMF; International Monetary Fund; austerity; Summit of the Americas;
    All these keywords.

    JEL classification:

    • F - International Economics
    • F6 - International Economics - - Economic Impacts of Globalization
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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