Life Debt Notes PDF

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Notes for video notes for "Life and Debt" ...

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BUS 346: International Business Notes for Video Notes for “Life and Debt” Name Jeremy Nunez What was the history of the global monetary system (not in reference to Jamaica per se), as mentioned in the video? Towards the end of 1944 when the war was coming near to an end, the allies were determined not to have the war finish, in order to not be finically unstable. The key institution that was emplaced to resolve that was the Internationally Monetary Fund (IMF). Its purpose was to have a bank for the allies, to conduct short-term loans to serve short-term trading interest of the winners of the war. As the set up for the World Bank commenced, this new global entity would ensure exchange rate stability and encourage its member countries to eliminate exchange restrictions that hindered trade. Major powers like the U.S. achieved a large impact while countries third world countries like Jamaica had no voice in the matter and were just part of the power structure.

What were some of the main criticisms of the IMF’s approach to solving Jamaica’s financial issues? 1. IMF had urge Jamaica to reverse the decline fiscal deficit as a catalyst for economical growth. They had told Michael Manley, late Prime Minister, that he could get a short-term loan under their conditions. During the first decade of independence, Jamaica was plunged into deep financial crisis by the rise in the price of oil 1971. 2. Unable to finance themselves, Manley suggested a 5 year plan with the request of getting cash at hand, which will be paid back within the context of the long term development plan. Jamaica was rejected with the message that long-term development is your problem. Upon taking a short loan from the IMF at full interest rate to help get out of the bind. Imposing heavy restrictions on what you can spend. 3.IMF’s idea was all about setting unreachable conditions that would then force a country to renegotiate loan terms, in which conditions became tighter. With devaluation of their currency, Jamaica heavily reliance on imports, puts them at a bad condition where the cost of those import increase and results in the economy being reliant on foreigners. In addition, capacity to export becomes less. 4. Greater resources allow cheaper means of production and access to cheaper labor. Which then forces local farmers to throw out their crops because they are no longer viable to compete with U.S. farmers and their cheap prices....