March 9 ,2018
The international Monetary Fund (IMF) hosted a seminar featuring the following topics; Improving Outcomes: Women, Youth and agriculture”, “The Economics of Crime in Jamaica: Youth Opportunities, Violence and a Vicious Cycle” and “The Climate Change, Agriculture Resilience, and Poverty Nexus”. Dr. Constant Lonkeng Ngouanaa opened the proceedings with an explanation regarding the selection of the topics. He noted that the above mentioned topics is of macro critical and thus is of relevance to their member countries.
The discussion continued with Dr. Uma Ramakrishnan, IMF Mission Chief for Jamaica, providing an overview of the IMF Caribbean Book (launched in November 2017): “Unleashing Growth and Strengthening Resilience in the Caribbean”. In essence, she highlighted the main attributes as to why growth has been so feeble in the Caribbean and possible solutions to addressing some of the problems.
Dr. Ramakrishnan highlighted that though the Caribbean is doing extremely well compared to other emerging market countries in terms of GDP per capital, social variables such as life expectancy and labor force participation and democracy variables, the real GDP growth in the Caribbean region is, “not really impressive particularly for the tourism-intensive economy such as Jamaica”. Based off real GDP growth, the Caribbean is lagging relative to the other emerging market countries.
She highlighted that this stagnant growth within the Caribbean region is mainly as a result of both macroeconomic and structural impediments. She explained these factors feed into each other, creating an environment that simply does not promote the dynamic private sector or allows foreign investment to enter countries. This large public debt crowds out private investments, creating an environment for potential investors to capitalize in government securities rather than actually “lending to real businesses” as stated by Dr. Uma Ramakrishnan.
Examples were provided for each category:
- Weak fiscal positions and elevated levels of public debt
- High non-performing loans
- Low financing deepening and inclusion
- Natural disasters
- Violent crime
- Brain drain
- High cost of doing business
- Loss of preferential trade access and official development assistance
Notably, from the IMF’s analysis on the Caribbean, Dr. Uma Ramakrishnan concluded that, if Jamaica customized their policies to address the structural impairments that the nation faces, the biggest growth kick would ultimately come from reducing crime and reducing debt.
The second topic of discussion, ‘The Economics of Crime in Jamaica: Youth Opportunities, Violence and a Vicious Cycle’ was addressed by Joyce Wong, IMF Economist. She elaborated on the issued mentioned by Dr. Uma Ramakrishnan, reiterating that one of the main structural impediments within the Caribbean in particular Jamaica is high crime. The Caribbean outperforms the rest of the word in the area of assault and treat. She however noted that the data presented is compounded with measurement issues as persons no longer report crime if actions were not taken to resolve previous crimes.
From the analysis conducted by the IMF, Joyce revealed that the most violent crime within the Caribbean is homicide, and notably, Jamaica is number four on the list for the highest homicide rate (per 100,000 people) within the world. She highlighted that generally homicide rates reduce with GDP per capita but this trend is not observed within the Caribbean. She highlighted an interesting point that though crime affects everyone, it affects youths and the lower class society disproportionately. Within the lower class society of Jamaica, IMF’s analysis shows ¾ of youths on average attend school only 19 days per month.
Joyce revealed that absenteeism of youths from school, violence between parents within a household of children, physical abuse of children and children facing violence in Jamaica ultimately leads to the children becoming violent themselves. She further pointed out children who are absent from school are in fact 2.5 times more likely to become violent towards others. Inevitably, this continuous vicious cycle experienced in Jamaica ultimately leads to higher growth in crime. Lower growth within the Jamaican economy generates lower opportunities which increases the vulnerability of crime amongst youths facing poverty.
She proposed if Jamaica were to reduce its homicide rate in line with the reset of the world, Jamaica would experience a 0.4% growth year on year. Notably, she emphasized Jamaica’s growth rate for the past decade is 1%.
In ending her discussion, integrated solutions for the problems were provided.
- Increase payoffs to legal activities
- Raising returns to education
- Parenting and mentoring programs
- Vocational programs for youth
- Urban renewal programs
- More effective policing
- Swift criminal justice systems
- Better targeting (data)
The last topic IMF addressed dealt with “The Climate Change, Agriculture Resilience, and Poverty Nexus”. Solutions were provided for the issues Jamaica currently faces within that area.
- Increase agriculture resilience
- Invest : farm roads, irrigation and storage (water and crops)
- Boost productivity: train and upgrade/modernize farming techniques including soil conservation efforts)
- Increase land titling: unlock access to finance
- Revisit crop insurance schemes
- Private sector engagement investment/linkages
- Mitigate and prepare for the long haul
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