Applying Strange to Jamaica
In Susan Strange’s article Finance, Information, and Power, she articulates how the global economy “...has been achieved by bringing together national financial systems into one global system” (Strange 260). However, Strange is quick to point out that there are consequences of this unification, one being “...for the customers, whether they want to put funds into the system (i.e., sell) or whether they want to borrow from it (i.e., buy)” (Strange 260). Utilizing Strange’s clarification about the consequences of engaging in the global financial system, Jamaica is an excellent example of a country that suffered heavily from its inclusion in the global economy and has experienced difficulty regulating its national economy and debt.
After Jamaica received independence from Great Britain in 1962, they were left with intense structural issues that created economic problems. Needing time to build their infrastructure, Jamaica took out loans from the IMF, hoping that the capital would help kickstart development. Instead, Jamaica fell further into debt and relied heavily on imported goods to sustain their livelihood. In Strange’s terms, Jamaica was the customer that was suffering from the dire consequences of “exchang[ing] one asset or liability for another” (Strange 260) within the global economy. In her article, Strange expresses, “There may be increased inflation if currency depreciation raises the price of imported goods without a corresponding expansion of exports” (Strange 266). The phenomenon described is precisely what happened to Jamaica due to the IMF refusing to loan any more credit to a struggling Jamaica, making Jamaica unable to repay its debt. As a possible solution, Jamaica was told to devalue its currency by the IMF, forcing Jamaica to be controlled again not through domination but debt. As the debt increased to devastating numbers (currently indebted 13 billion U.S. dollars), Jamaica could not export its goods because it could not generate enough revenue within the country to sustain itself. Therefore, Jamaica was forced to import almost everything to support its people, which only deepened their debt.
Another consequence of the global economy was “for the governments on whom the responsibility rests for managing the national economy, regulating the money supply to it…” (Strange 260). As a result, the government was unequipped to handle the never-ending debt within Jamaica, and the national economy continued to suffer immensely. A great example of this was included in Stephanie Black’s 2001 film titled Life and Debt, where she discusses how the industries and workers in Jamaica are victims of the global economy. For example, the production of fresh milk in Jamaica used to be a lucrative industry where the milk was produced and sold all within the country’s borders. Eventually, the cost of powdered milk began to be cheaper globally than fresh milk, and the powdered version began to replace fresh milk. As a result, no longer was there national food security in Jamaica. The understanding that the powder will eventually be too expensive, but there will not be a new milk industry to take its place is a sorrowful inevitability for Jamaica.
In conclusion, Strange’s acknowledgment of the consequences of engaging in the global economy perfectly described Jamaica’s situation after gaining independence from Great Britain. Although the IMF believes that Jamaica is better off being involved in the global economy, it is clear that its inclusion is detrimental to Jamaica’s stability. Jamaica exists as an example of the possible consequences of joining the global financial structure that Strange recounts.
I think looking at a country like Jamaica and how they have been in economic troubles since their independence from Great Britain shows how colonialization has had long terms effects that are still felt today. Nations like Jamaica were colonies for hundreds of years and history that is often taught makes it seem like once they were granted independence everything was better. This is not the case and places like Jamaica are still exploited for their natural resources by more powerful nations. There is no effort to improve the lives of people in Jamaica, but rather attempts to keep them in debt and reliant on the types of countries that had previously colonized nations like Jamaica.
ReplyDeleteI liked how you decided to write about how the global economy can have negative effects on some countries. I was thinking about writing about this topic and ultimately decided to write about the US and the WTO so I enjoyed reading your blog post. I think it is a very big issue in today's society in that former colonies are essentially being turned into modern-day colonies because they are having their local economies destroyed by importing foreign goods from global super powers. By importing powdered milk, Jamaica is killing their local industries, which is preventing the country from growing economically. This is a great example of how the global economy is not good for everybody.
ReplyDeleteYour example of a former colony struggling to start up its own independent colonies because of international debt creates awareness about how new countries should be given equitable opportunity and compensation in order to prevent another Jamaica situation. This specific example reminded me of India and how they struggled to solidify their economy in the 1950s, following their independence from the British Empire. At first, the country began to rapidly industrialize because its economy was primarily agricultural, the majority of citizens were illiterate and the average life expectancy was 32. Both countries were put in poor positioning in regards to starting and building wealth so the fact that the global economy reinforces those hardships is another reason why change needs to be made throughout the international community. Without countries assisting each other with trade opportunities or borrowing money, there is little change to be created and more Jamaica(s) and India(s) are bound to repeat.
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