Effects Of Foreign Aid In Jamaica
Seaga’s administration was able to secure concessions from the Reagan Administration through becoming an ally to the U.S. in the Caribbean Affairs. This relationship manifested itself in 1986 when Seaga stated, that he did not seek re-election due to pressure to step down. This action caused IMF to put stringent conditions in the country and the ability to request more funds. However, “Seaga’s threat to resign appears to have jolted the Reagan Administration into action. The sanctions that IMF wanted for Jamaica included devaluing the currency, budget cuts, price control on products exported as IMF related its conditions for financial assistance. The result was IMF gave a standby credit of U.S. $132.8 million without any conditions” (Libby, 1990, …show more content…
Support your response with examples. The role of foreign aid in the growth process of developing countries has been a topic of intense debate. Foreign aid is important as its implications for poverty reduction in developing countries. The main role of foreign aid in stimulating growth is supplemented domestic sources of finance such as savings, thus increasing the amount of investment and capital stock (Ekanayake, Chatrna, n.d.).
In the case of Jamaica, the verdict cannot be concluded at this time. Currently, Jamaica has a large debt and serious social challenges. As of 2015, IMF’s Executive Board approved a 48 month $932 million extended arrangement to help create the conditions for growth through fiscal debt positions in competiveness (IMF, 2015). The future of Jamaica will be decided by the people and the future governments. Both have a responsibility to the country which has had a long history of rebellion and defiance. Jamaica needs peace to prosper. This peace may have to come at the hand of more foreign aid as the country reconstruct its economic and government structure to fit within the globalization of today’s