Lessons to Be Learnt from the Jamaican and Grendadian Experiences with Saps

LESSONS TO BE LEARNT FROM THE JAMAINCAN AND GRENADIAN EXPERIENCES WITH SAPs

Efficient recommendations in addressing some of the macroeconomic issues in the Grenadian experience may not share a clear semblance of the economic prescriptions in Jamaica. Though faced with common BOP disequilibria, the countries differ in size, resource base and the cause of the crises.

Firstly, our attempt at recommendations does not in any way imply that all of the SAP requirements or internal policy failed. EC devaluation helped reduce inflation and improve foreign direct investment. Since the implementation of a series of initiatives by the government Medium Term economic Strategy, Grenada has been transformed from a once vibrant nutmeg and cocoa powerhouse to a large tertiary based economy. Some of these include Hotels, insurance services as well as education through its acclaimed St. Georges University medical fraternity. By 2001, the services sector accounted for over 70% of GDP as compared with 53.3% of GDP in 1990 (MTESP, 2000). With respect to the Jamaican economy, the imposition of the food stamp in 1984 was established as an adjustment program for the benefit of the vulnerable groups in society. This policy aimed to enhance spending and private consumption of all levels of income earning citizens. It enabled the Jamaican population to afford basic goods at affordable prices. This increase in the ability to buy commodities by all citizens is recommended since it can be seen as a positive stance to the local farmers as there will be an overall increase in aggregate demand and not just consumption of imported stock.

Both Jamaica and Grenada has had inherent vulnerabilities, internally and globally. In these developing economies which are sensitive to developments in the global economy, the policies and conditions undertaken should be analysed thoroughly before lending for adjustment. The IMF must conduct an economic sensitivity analysis in an attempt to identify...