Public policy can be defined as a statement of intent, which guides decisions and contains goals and the means to achieve them, this can be the action taken by a government to maintain order or address the needs of citizens. According to Dye 1972, a public policy is anything a government decides to do or not to do. Therefore, a policy is not just a decision that produces change but one that also resists change. Different authors in the discipline all agree that public policy is a governments response to public problems.
We need public policy as it aims to remedy the public problems or issues that can be economic, social, or political in nature, e.g., public problems include poverty, high debt, low employment rates, sparse distribution of public goods, and low literacy rate.
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One may ask what constitutes good public policy. ‘Is it what the people want?’ - claimants are satisfied; ‘Is it what government experts tell us we need?’ - are institutions working effectively to satisfy the public interests; or ‘Is it what economists say maximizes the efficient use of resources?’ - net benefits.
There are a few reasons why governments make and implement policies: to respond to crisis; to solve economic, political and social problems; to satisfy public demands for the delivery of public goods and most important to understanding the reasoning behind the policy decisions in the 1970s and present day; to satisfy conditionality. When a government sets policies to satisfy conditionality, The question of political freedom and control can be raised as the government of the in-debt country has to fashion and make policies reflecting those of their debtors. This leads to a major infringement on one’s political freedom. The inability of the governments to negotiate with the structural adjustment programs leaves them in a situation in which they accept every policy and implement them regardless of their adverse effects on the public’s interest. They are left powerless in negotiating with these SAPs, accepting strategies that defund healthcare, education and social programs.
The documentary ‘Life and Debt’ by Stephanie black describes and examines, how the IMF and World Bank policies, determined by the G7 countries, led by the US, impact on poor developing countries, specifically Jamaica. Jamaica, at the time a recently independent country, was plunged into a financial crisis by the rise in oil prices in 1973. This caused Michael Manley, the then Prime Minister of Jamaica, to be rudely awoken to the harsh realities of international finance. Manley strapped for cash, approached the IMF to receive a loan to keep the country afloat. The IMF told Manley that he could get a short-term loan under their conditions, but would not entertain any discussion about long-term solutions. Demanding short-term repayment of the debt, they insisted that costs be cut in exactly those sectors that could support long-term development: education, health and native agrarian-based-production for the export market. Not only would Jamaica have to tighten its belt, it would have to open up its doors to foreign imports by eliminating all protectionist measures that favored local industry and farming.
The main issues that were being faced by Jamaica documented in the film were a financial deficit, high unemployment, lawlessness and social turmoil. ‘Life and Debt’ graphically illustrates how the policies of the IMF and World Bank impacted on workers, small businesses, farmers and the Jamaican society in general.
The conditionality’s or austerity measures put in place by these financial institutions. Had to be implemented by the formulation of policies to support them. The conditionality’s were based on the tenets of the Washington Consensus. The Washington Consensus comprises specific policy prescriptions from the IMF, the World Bank and the US Treasury deemed necessary for developing countries. Fundamentally the WC significantly shapes how the political executive, legislature, judiciaries and mass media in the Anglophone Caribbean function.
In the early 1990’s, the Jamaican government had to shift its area of policy emphasis to involve a greater degree of liberalization in the Jamaican economy. The government therefore had to use Core Liberal Principles of the WC:
- Fiscal discipline - strict criteria for governments to limit budget deficits;
- Tax reform - broaden the tax base to raise revenues;
- Financial liberalization - interest rates should be market determined;
- Exchange rates and trade liberalization - should also be market determined;
- Privatization – government should transfer industry from the public sector to the private sector;
- Deregulation - the abolition of regulatory impediments to stop private businesses and competition;
- State minimalism.
The neo-liberals argue that through the promotion of free markets, free trade and the elimination of excessive government controls, economic growth and efficiency of the market will be stimulated. The SAPs advocate for the promotion of free markets within the context of permissive governments that allow the magic of the market place and the working of the invisible hand as proposed by economist Adam Smith to guide resource allocation and stimulate development. These neo-liberal expansions were the government’s response to the problems of poverty and public debt.
The documentary showed the plights of the local farmers whose businesses were no longer viable because they could not compete with the cheap imported produce from the US, for example, onions and carrots. The IMF insisted on the removal of trade barriers and tariffs on imported goods. Thus, allowing for an influx of foreign foods in the Jamaican market, the policy change was evident.
As Jamaica moved from a protected market to a free market, the elimination of artificial barriers to trade caused the fattening of a few at the expense of a whole culture. The dairy industry also crashed as a result of the SAPs, as local dairy farmers could not compete with the cheap subsidized imported milk powder from the US. The importation of the milk powder was a stipulation of an agreement the government made in 1992 with the IADB to receive 50 mil US to aid in the development of the agricultural and manufacturing sector.
The film also features testimonies from banana farmers whose industry had been devastated by the US-instigated WTO ruling that stopped them from receiving their secured tariff-free markets in the Europe. The 'banana wars' in Europe left Jamaica's national interests at the margins. This conflict was seen as a bitter rivalry between the USA and the EU over whether or not Dole, Chiquita and Del Monte would be allowed to crack a market that had been excluded to them. Great Britain had a long-standing trade agreement with Jamaica that favored their banana export. This was the only place where Jamaican banana exports stood a chance, since they were more expensive to grow here than in places like Honduras, where American firms could rely on the cheap wages provided by a union free environment, 95 percent of the world's banana market was controlled by American multinationals, however, they were not satisfied unless Great Britain's market could be penetrated. With their success, Jamaica's collapse was ensured. As the WTO ruled it discriminatory for the EU and Jamaica to have this protected trade relationship. This caused Jamaica’s banana industry to not be as lucrative as it once was. These examples from the documentary show that public policies by conditionality are not necessarily beneficial to the public interest of a country.
According to El-Hadj (1997), the policies of SAPs include the devaluing of a country’s currency against the United Sates dollar, the lifting of import and export restrictions, balancing the budgets and not overspending, the removal of price controls and state subsidies, deregulating the private sector and transferring government owned institutions and sectors into private hands. These all have a significant effect on human development within these third world countries, even though they sometimes create stability.
The devaluation of Jamaica’s currency, allowed multi-national corporations to establish manufacturing plants to produce goods. These multi-national corporations would be established in manufacturing and service areas referred to as free trade zones (FTZs). Women, working in these unregulated, tariff-free sweatshops called 'free zones', talked about their struggle to make ends meet on their weekly salaries of US$30.
So, are the policy issues of high debt and high unemployment rates still relevant today? In my opinion yes, they are as the employment rate in the country is currently at 8 percent in comparison to the US at 3 percent also persons in society still find it difficult to find meaningful and fulfilling employment. As it relates to debt, as of September 30th 2019 the government of Jamaica still owes the IMF over 470 million US dollars. So, governments and international bodies such as the IMF attempt to address the public issues by working together. The government takes loans to repay debt, grants and technical assistance to funnel money into socio-economic industries and sign to bilateral agreements to allow for assistance in trade and security. Governments also attempt to join regional bodies such as the EU and Caricom in order to provide an export market for local produce.
In Jamaica, neoliberal policies are often used to pay off the debt - privatization such as Air JA, telecommunications and utilities. Privatization of telecommunications benefited society because it created better access to products through lower prices caused by the invisible hand and market competition. In the case of privatization of Air JA, many people say it was not beneficial because of nationalistic sentiments. However, it stopped the government from bleeding money into an industry which was not producing favorable profits. And in times of austerity, the government has to pay keen attention to how funds are spent.
While doing research on the SAPs, it is evident that a negative stigma is attached to the name within the Caribbean. However, the SAPs were established to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth and reduce poverty around the world (IMF, n.d.). In order for the SAPs to achieve their goals, they propose strict policies for the borrowing nations to follow on their route to sustainable development.
Success for me is subjective. In this case success is being able to overcome and fix the public problems or policy issues faced by the country. Success for me doesn’t mean that a policy to fix the public problem was implemented, but was the government able to meet the objectives from this implementation.
Were they able to reduce poverty, secure favorable export markets for Jamaica, were they able to successfully navigate politics, regardless of the SAPs? People are critical towards the SAPs as they subject developing nations to make decisions, they wouldn’t have made otherwise. The SAPs are the perfect example for policies based on conditionally. If we are adhering to the definition of public policy, every decision made by government should always benefit the people and if it doesn’t where’s the sense in that. If none of the policies allow for the people of a country to be in a better place, then they were unsuccessful. Following the stipulations of the SAPs, according to Christine Lagarde former managing director of the IMF Over the decades the government of Jamaica has managed to actually create jobs, to reduce the unemployment level to the lowest ever, reduced debt by 50 percentage points of gross domestic product, managed to stabilize inflation and has managed to accumulate reserves.
But are we the public enjoying the niceties of operating in a thriving economy?
What Black's film ‘Life and Debt’ shows is the failure of the IMF to remedy the fiscal deficit of Jamaica. After the structural adjustments, the cuts in public expenditure, the removal of tariffs on imports, the privatizations and devaluations, Jamaica is still plagued by financial crisis. And because the SAPs are policy oriented, they only seek to recuperate the debt owed, not considering the realities of their harshness. In my opinion, the film is a very powerful weapon as it gives a visual depiction of the global movement for a more equitable economic order.
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