This is in response to Don Robotham's article 'IMF shock attack - Lessons from Latvia and Ghana for Jamaica' (Sunday Gleaner June 28, 2009)

Robotham's shift of position on Jamaica's prospects in seeking to sign a standby agreement with the IMF suggests that he is not at all clear on what role the agency plays in the global capitalist economy and how that role is evolving in the ongoing global financial and economic crisis. Of course, Robotham is not alone in his confusion as Ian Boyne's sunny effusiveness about Jamaica's prospects in dealing with the refurbished and reformed IMF, after the G-20 London meeting (in a recent Sunday Gleaner column) shows. Robotham says somewhat opaquely: "It is now clear that the G-20 meeting in London in April laid an egg." The question is: For whom? In other words, which team is the IMF batting for? Does he or anyone else seriously think that the purpose of the G-20 meeting was to reorganise the IMF so that little countries like Jamaica which chronically spend more abroad than it earns can continue to borrow with abandon?

Fiscal policies

Since Don has no analysis of the IMF's role in the global economy to offer that may shed light on Jamaica's real situation vis-a-vis the IMF, it is not surprising that he ends up denouncing the advanced capitalist countries for hypocrisy. However, hypocrisy is not a concept in political economy at all. The fact is that advanced countries such as the US play the major role in maintaining the global aggregate demand for commodities and, therefore, expansionary monetary and fiscal policies (Don's Keynesianism) serve to reduce the severity of the global financial and economic crisis in a way that the same policies in Jamaica, Latvia, and Ghana individually or together could never do.

It is neither hypocrisy nor the principle that might makes right, therefore, that is driving anything; it is simply that the interests of the global capitalists require expansionary monetary and fiscal policies by the major economies that are viewed as capable of growing their way out of their debts, and fiscal and monetary restraint on the part of the underdeveloped economies that have chronic debt problems.

Saying life is not fair may be true and some may find solace in it, but it is not too helpful in understanding what your real options are when you are on the receiving end of the stick.

The fact is this: as part of the global capitalist economy, Jamaica has to have a relationship with the IMF, the WTO, and other global and regional capitalist institutions. At present, the global financial and economic crisis has compounded the underlying problems of slow growth, low labour productivity, government inefficiency, indebtedness, etc, in Jamaica, and it needs to sign an agreement with the IMF and with other lenders to get financial assistance to tide it over the period of the crisis.

Restructure

Jamaica needs to use the opportunity to restructure its affairs so as to resolve its long-standing problems. The IMF is not and cannot be the ultimate solution to Jamaica's problems of stagnant economic growth, unemployment, inflation, and balance of payments troubles even if the leaders of the advanced countries were not a bunch of hypocrites as Robotham claims. Fortunately, Prime Minister Golding seems to understand Jamaica's troubles better than many of the progressive commentators such as Robotham. He should explain the situation of Jamaica in the global economy more fully to the Jamaican people so that they may understand what is required of them in confronting the country's problems. If he does not do so, then the emotionalism and populism that Robotham displays in his article will likely become more widespread.

David C Wong is a professor of economics at California State University, Fullerton. He may be reached at dwong@Exchange.fullerton.edu.