Half of the state budget goes to its sureties
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By Rachel Johnson
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The Center for Economic and Policy Research issued a statement on the economy of Jamaica specifying that during 2011 were paid approximately $ 1.400 million in interest on debts of the country, almost 10% of its GDP. This represents slightly more than double of what was spent on capital programs.
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Mark Weisbrot, economist and co-director of the center, said they have the highest percentage globally, even greater than the crisis countries of the Eurozone. For several years the Government has spent half of its budget to cover debt payments, which has cost the reduction of funds for infrastructure, hospitals and schools.
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The report published by the center describes: The excessively high burden of interest payments will continue moving public investments that are necessary to restore normal growth and reduce high levels of unemployment and poverty.
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For decades, the Jamaican economy has been unstable. The center found that after three years of decline, in 2011 the economy grew by 1.5%, but still remains below its level of GDP in 2008. Their total debt until last year reached 130% of GDP.
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The root of the Jamaican government debt was caused by bad bank loans that the government had to overcome due to a crisis in the mid-nineties, when several banks collapsed in consequence of many emergency loans.
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In 2010 the debt of the nation and the impact of global recession, pushed the state to require the protection of the International Monetary Fund, who provided a loan of 1,270 million dollars and assisted the country to restructure its debt.
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