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Cuba, Jamaica, Puerto Rico, United States

Beyond Cuba: why Caribbean debt crisis could become American security crisis

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Cuban president Raúl Castro met US president Barack Obama Monday morning in Havana. (Al Diaz/Miami Herald)
Cuban president Raúl Castro met US president Barack Obama Monday morning in Havana. (Al Diaz/Miami Herald)

It’s not just voters in Spain, Ireland and Greece who are weary of austerity economics.PRjamaicacubaUSflag

Voters in Jamaica last month narrowly ejected their prime minister, Portia Simpson-Miller, giving opposition leader Andrew Holness and the nominally center-right Jamaica Labour Party a razor-thin 32-31 majority in the House of Representatives. Though Jamaican politics has been famous since the 1970s for its polarization, Holness will govern with the narrowest margin in the House since 1949.

What he does with his mandate could matter not only for Jamaica, but the entire Caribbean.

Simpson-Miller, who took power in 2012 and secured yet another IMF bailout in 2013 for the debt-plagued island, marked some success in bringing the country’s debt-to-GDP ratio down from 140% to around 125%. For now, Holness is working with IMF officials, but he won election after pledging to spend more revenues on health care, education and stimulating the economy, part of a generous and populist 10-point plan that will be difficult for him to enact under current fiscal restraints.

The Caribbean’s self-cannibalizing debt crisis

Holness will find himself in a trap all too common in the 21st century Caribbean, where manufacturing, tourism and, in some cases, modest oil production, have not been sufficient to boost economies and incomes. Without higher GDP growth, Holness will face two difficult options. If his government spends too much, he’ll unwind the careful work of his predecessor and send Jamaican debt levels spiraling upwards again. If Holness spends too little, he will alienate the electorate that gave him a majority and that, like Americans and Europeans, are weary of roller-coaster economic uncertainty and a widening inequality gap.

It’s a story that is increasingly familiar across the region and, today, it’s not just Jamaica that is falling into the debt trap. Barbados and Grenada have both marked 60% increases in their debt/GDP ratios in the last 15 years, and the Bahamas, Bermuda and other countries, not typically associated with imprudence, are also struggling with rising debt. Islands like Martinique and Guadeloupe thrive as fossils of France’s colonial empire, thriving due to hefty subsidies from Paris. Trinidad and Tobago, only recently flush with the promise of offshore oil drilling, has watched its expectations plummet with global oil prices. Puerto Rico, a commonwealth of the United States, endures a grinding debt default amid prolonged economic misery with little hope that legislative action can fix its economy. Despite years of advanced warning, neither Democrats nor Republicans have the inclination or ability to provide relief from Capitol Hill.

Taken together, the spiraling debt and economic stagnation of the Caribbean represents an overlooked security challenge in the years ahead that China, Russia or even the Middle East might exploit.

Cuba, Cuba, Cuba

Jamaica’s election didn’t generate the same excitement in the American media as U.S. President Barack Obama’s historic trip this week to Havana, the first since Calvin Coolidge visited in 1928. But it’s only the third time that Obama himself has traveled to the Caribbean at all – he visited Jamaica in April 2015, and he went to Trinidad and Tobago in 2009, when it hosted the 5th Summit of the Americas. Continue reading Beyond Cuba: why Caribbean debt crisis could become American security crisis →

Jamaica

Holness sworn in after JLP win narrow victory in Jamaica

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Former prime minister Andrew Holness has narrowly returned to power after Thursday's vote in Jamaica. (Facebook)
Former prime minister Andrew Holness has narrowly returned to power after Thursday’s vote in Jamaica. (Facebook)

It’s not just European voters who are tired of austerity.jamaica

In Jamaica, after years of a budget-cutting IMF bailout program, the famously polarized electorate narrowly ousted the country’s first female prime minister, Portia Simpson-Miller, in office since early 2012, and her nominally center-left People’s National Party. Instead, on February 26, voters chose the nominally center-right Jamaica Labour Party, bringing Andrew Holness, who briefly served as prime minister from November 2011 to January 2012, back to power.

Holness was sworn in as prime minister last Thursday.

The JLP won just 50.13% of the vote to the PNP’s 49.66%, and they hold only a narrow lead in the Jamaican House of Representatives, winning  just 32 seats to the PNP’s 31 seats — a narrow result even by the standards of the razor-thin divide of Jamaican politics.

jamaica16 jamaica house

Holness pledged on the campaign trail to devote more resources to boost jobs and health care, though it wasn’t incredibly clear how that would necessarily work in light of ongoing obligations to rein in government spending. Jamaica is one of many Caribbean countries facing a difficult debt burden, despite the fact that economic growth has slowed throughout this decade as recession-weary Americans and Europeans shunned the opportunity for tourism.

Continue reading Holness sworn in after JLP win narrow victory in Jamaica →

Jamaica

Jamaican government targets legalizing ganja by September

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jamaica ganja

It may seem natural that Jamaica should have relatively lax rules on marijuana use, given the association among the country, Rastafarians and smoking ganja.jamaica

Nevertheless, cannabis has been illegal on the island since 1913, when it was still a British colony, and under the Dangerous Drugs Act, possession, sale and cultivation of cannabis is illegal.

That may change soon, with the government of prime minister Portia Simpson-Miller preparing to loosen Jamaica’s drug laws.

Last week, the Jamaican government introduced a proposal that would, to a significant degree, decriminalize cannabis use on the island. Notably, the reforms would decriminalize possession of up to two ounces of cannabis (though users would still be subject to ticketing and a fine if caught) and use for all religious, medical and scientific purposes. Though just between 1% and 10% of Jamaica’s 2.9 million people are Rastafarians, they believe the use of ganja in religious ceremonies is sacred.

The Rastafari movement arose in the 1930s, and it worships the late emperor of Ethiopia, Haile Selassie, as a central sacred figure (before he became emperor, he was born Tafari Makonnen Woldemikael, hence the reference to Ras ‘prince’ Tafari). It was popularized in the late 20th century largely through the influence of reggae music, most particularly by Jamaican songwriter Bob Marley, an adherent of Rastafarianism.

Simpson-Miller’s center-left People’s National Party (PNP) controls a two-thirds majority (42 out of 63 seats) in the Jamaican House of Representatives, and a nearly two-thirds majority (13 of 20 seats) in the Jamaican Senate, so the proposals are very likely to be enacted as law in a vote that the government hopes will take place in September.

As in many Latin American countries, Jamaica has resisted liberalizing its drug laws out of fear of US retribution, including the withdrawal of aid and other support. A former Jamaican commission on ganja recommended decriminalization years ago, but no Jamaican government wanted to risk the wrath of the United States.

Today, however, two US states — Washington and Colorado — have decriminalized the personal use of marijuana after ballot initiatives in November 2012 and the US justice department under president Barack Obama and US attorney general Eric Holder are largely allowing, and even encouraging, the state-level experimentation.

Like many Caribbean countries since the 2008-09 financial crisis, Jamaica is suffering from lower tourist revenues and stagnant economic growth, as well as extremely high debt loads — in Jamaica’s case, public debt of nearly 140%. Jamaica also suffers fromextremely high crime level, with the sixth-highest homicide rate in the world, and the highest of any Caribbean island country, according to a new UN report.  Continue reading Jamaican government targets legalizing ganja by September →

Barbados, Grenada

Election week in the Caribbean

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bajan parliament

Two of the Caribbean’s more colorful island nations go to the polls this week in parliamentary elections — Grenada on Tuesday and Barbados on Thursday.grenada flagbarbados flag

In Grenada, prime minister Tillman Thomas is seeking reelection for his government, led by the National Democratic Congress (NDC), which holds 11 out of the 15 seats in the Grenadian House of Representatives, the lower house of Grenada’s bicameral parliament (the Senate, its upper house, is comprised of 13 members, 10 appointed by the government and three appointed by the opposition).

Meanwhile in Barbados, prime minister Freundel Stuart is seeking election in his own right after succeeding David Thompson as prime minister in October 2010 after Thompson died from pancreatic cancer.  Voters will choose 30 members of the House of Assembly, the lower house of Barbados’s parliament (pictured above).

There are some similarities between the two Caribbean countries beyond the timing of this week’s elections:

  • Both incumbent governments face uphill battles for reelection amid tough economic conditions throughout the Caribbean region — just last week, Jamaican prime minister Portia Simpson-Miller announced the country’s second debt swap plan in three years, designed to alleviate Jamaica’s debt crisis, where public debt stands at 140% of GDP.  Both Barbados and Grenada have been identified by the Caribbean Development Bank as having unsustainable debt levels.
  • In both countries, more right-wing opposition parties are led by former longtime, three-term prime ministers (Keith Mitchell in Grenada and Owen Arthur in Barbados).
  • Both feature stable political systems with a relatively entrenched two-party system, in each case with parties that are essentially moderate that lean only slightly left or right.
  • Both economies remain heavily dependent on tourism, and have absorbed the secondary shock of global economic downturn over the past five years, with each country having its own niche agricultural markets — Grenada is a leading exporter of nutmeg, mace and cocoa, while Barbados exports sugar and rum.
  • Both are former British colonies — Barbados, with nearly 275,000 residents, became independent in 1966, Grenada, with just around 110,000 residents, won independence in 1974 — that were both part of the short-lived West Indies Federation that existed from 1958 to 1962 that also included Jamaica and Trinidad and Tobago, among other islands.
  • Queen Elizabeth II still serves as head of state for both countries — in Barbados, the Queen’s appointed representative, the governor-general, is responsible for appointing all 21 members of the Senate, the upper house of the Barbadian parliament.
  • Both will be electing members of the lower house of parliament only, and in each case, election is determined on a first-past-the-post basis in single-member constituencies.

Continue reading Election week in the Caribbean →