JAMONOMICS

If anyone has ever looked into the effects of a recession they would realize that some things remain the same. The rich stay Rich, and the poor get poorer. You think that the severity of the recession and whether or not it becomes a depression would have an effect on this pattern. But it doesn’t. All that happens is the more severe the recession, the greater inequality that develops and the smaller the amount of high elites that benefit from the disaster that unfolds.

The Great Depression
This was probably the worst economic disaster ever recorded. But what happened in the interim. We would see that the big banks in the United States bought out all the smaller banks. They consolidated market shear and in the end increased their own stability and wealth.

Russia after the fall of the Soviet Union also experienced one of the worst depressions recorded. Their GDP fell by about 50 percent between 1990 and 1995. So what do we know about Russia now. They have one of the most powerful oligarchies in the world

“Known as oligarchs, these businessmen wield a great deal of influence over Russia's political and economic life.

They bought most of Russia's national resources at bargain basement prices, often in return for favours to key politicians.” BBC 2000

This group rose to power during the turbulent 90’s after massive deregulation and privatization was said to be the cure to Russia’s economy. State assets were sold at rock bottom prices and the most powerful businessmen who were usually the members of the old soviet power structure purchased everything.

Today
Well this probably won’t be the same story today since we are no longer blaming communist policies or market irregularities like too much regulation for the ills in the worlds economy. Instead we are blaming a lack of regulation and free market principles as the root cause of the problem. The solution today is not less regulation but more.

President Barrack Obama has signed into law the largest stimulus package ever by the US government and the government has continued to purchase banks in order to build trust in the financial sector and maintain some amount of stability.

This recession will have exactly the opposite effect than what every other recession has had because there is a paradigm shift. State intervention is seen as the solution to economic ills. The United States will see a middle-class benefiting while a upper-class become practically stagnant in growth after an 8 year reign.

Jamaica
Our economy has always behaved differently because the market does not operate efficiently at all in Jamaica. However I believe that those who will profit from Jamaican turbulence don’t even live in Jamaica. They live among other places in China and Spain. A state visit from his majesty in February as well as the Chinese Vice President cannot be dismissed as just courtesy visits. The queen said she always wanted to come to Jamaica, but why now? Probably it has something to do with the massive investment Her country has made in our tourism industry building all of the biggest hotels we have now. I have already explained the relationship between China’s ‘altruism’ and their national interest.

The sale of some of Air Jamaica's most lucrative routs to Virgin Atlantic for less than 5 percent of its actual worth may have been signs of faulty neoliberal policies spreading wings in Jamaican political economic thought. but if you dismissed it as policies of a previous administration, get this - The new administration wants to sell the entire air line! lets just wait and see how much it goes for.

What we may see in this time is other governments and other middle classes benefiting from Jamaica’s strategic position and resources rather than our own. If we are not careful, we may not benefit at all.

So, the Chinese Vice President was in Jamaica some time around Valenties day...

they signed a line of credit to Jamaica worth 100 million US dollars to purchase chinese goods and loaned us another 10 million for concessional financing.

Jamaica has 2.5 million people and bauxite with some lime stone and hotels.

What does china see in us, and why are they lending us so much money?

well its a simple strategy. they are slowly creating a jamaican dependency for chinese products and services. It's the Chinese way. Soon we will all belearning and speaking Chinese.

Awesome!

Apparently Jamaica has problem with child labour and the indiscriminately enforcing International Labour Laws in the workforce. Now I don’t expect you know all these laws, but in your experience, do you believe Jamaica to have a serious problem with treating the workforce fair? And do children in Jamaica work too much?

context
The International Labour Organization has recently released a damning report on labour conditions in the island. According to the Observer in the report several concerns were mentioned including
• Restrictions on the right to collective bargaining and the right to strike,
• Sexual harassment
• The existence of gender bias in the workplace.
• Wage differences between both sexes, particularly in the top end of the labour market.

Research of the ICFTU says that 4% of children between five and seventeen were involved in some form of economic activity including begging. Also it was found in 2000 that girls under the age of 11 were soliciting sex.

The ministry responded by acknowledging that there is a problem, but the research grossly exaggerated many of their stated problems and that Jamaica is not even on the radar in terms of violations of International Labour Standards.

Observer Article

Pricemart is one of my country's two real wholesale shops. The other is Megamart that to my knowledge has two branches. One branch is in Barbican and the other is in Portmore that is a satellite city to the capital.

Today there was the signing of the Confucius center to be built by the Chinese at the University of the West Indies Mona campus and this is of course as a result of the growing interest in Jamaica as a hub for exporting Chinese manufactured goods to the rest of Latin America and the Caribbean. The total population of this region is approaching some 900 million people and most of the countries rank as emerging markets of the developing world.

I am currently reading the book "the world is flat" by Thomas Friedman who postulates a great thesis and explains that through telecommunications, the Internet and greater technology in general, the world has become extremely small and hyper-charged. He explains in detail the evolution of Wal-Mart and how their success lied in their ability to become super-efficient through Supply Chaining.

I believe that the Jamaican Private sector should take advantage of this opportunity that has come solely from our strategic position in the Western World. I propose to business people in the country to explore the possibility of establishing a retailer store like Wal-Mart with headquarters in Jamaica that will have braches all across South and Central America to sell to and further develop these emerging markets with consumer items.

The rational behind this is that China is currently one of the worlds cheapest producers of manufactured items. Also the Wal-Mart model has shown us the benefits of taking advantage of crude and ingenious inventory management through giving the suppliers direct preview to sales figures so they can accurately match output to consumption. This is the direction the most successful type of retailing is going towards. This is proved by the fact that sales by Wal-Mart stores in the United States surpassed expected sales for the month of January in 2009 amidst the worst financial crisis the world has seen in over sixty years.

We as a country cannot afford for this opportunity to pass as annual sales of Wal-Mart that serves a population of about 400 million in the United States, is almost 30 times our Gross Domestic Product. If we are able to capture and take advantage of this market, it would not only boost our services sector, but we will also gain important links to a part of the developing world that we have neglected for so long.

Just my Views on Economics and Jamaica!

please comment!