Balm or Bitter Medicine? An Analysis of IMF Agreements in Jamaica and Grenada

Abstract

The IMF’s relationship with the Caribbean has traditionally been a tumultuous one. Balance of payments disequilibria and high levels of debt have plagued Jamaica and Grenada since the 1970s. As a result, both countries have engaged with the IMF in the forms of extended loans, which in the 1970s and 1980s were characterised by structural adjustment programmes with strict austerity measures, often involving wage freezes and stagnant growth in pursuit of “fiscal stability.” Due to the often-deleterious effects of these measures, the IMF is perceived by the broader Jamaican and Grenadian populations as a neo-imperialist hegemon. However, the IMF has, since the 2008 global recession, purported a new commitment to change in its interaction with Caribbean countries. Grenada and Jamaica are currently involved in agreements with the IMF and indeed, the countries’ authorities claim that these new agreements will be different. This thesis analyses the history of IMF agreements in Grenada and Jamaica, and determines what the main distinctions are between the current agreements in the two countries and those of the past. The thesis considers also the professed philosophical change of the IMF, and determines whether this purported change has had a significant effect on its relationship with Grenada and Jamaica. The thesis ends with a discussion of the social implications of these perceived changes on the people of these two countries, as evidenced by extensive interviews with Jamaican and Grenadian interest groups. Finally, the paper suggests that despite the changes in the new agreements, that the relationship between Jamaica, Grenada and the IMF has not changed enough to provide genuine avenues for self-sustaining development and growth that would have a positive long-term impact on the broader societies.