Edward Seaga | Fearful Future of the PNP
General secretary-designate of the People's National Party (PNP), Julian Robinson, made the following statement in The Sunday Gleaner, October 16, 2016: "We are a democratic socialist party, and within the context of, in 2016, being in an International Monetary Fund agreement, we have to define what that stands for. What does it mean to be a member of the PNP?"
This is a curious statement, because I thought that the PNP had abandoned socialism in the light of the statement by former Prime Minister Michael Manley to Comrades present at a meeting at the UWI after the Berlin Wall was torn down. At that meeting, he told the Comrades, "Socialism is dead!"
Robinson, who must have been young at the time, 26 years ago, might not have been aware of this shattering statement.
I believe that a very far-reaching statement like that from the maximum leader would not have been ignored by the party. Hence, I am puzzled that the PNP still considers itself a socialist party, albeit a democratic variation. It would be enlightening to know when, and why, that reversal was taken. And so would others, especially the business community.
MEMORIES OF THE '70S
Memories run deep about what happened in the period of democratic socialism practised by the PNP government of the 1970s. Conditions deteriorated so badly in the 1970s that:
- The Bank of Jamaica had to print money for the country to survive after the treasury was drained.
- Michael Manley used most of the increased bauxite levy to finance free education, which was not free at all because the schools and parents had to cover the gap.
- This left little to finance several other social make-work projects that were announced by Government under the 'socialism is love' explanation given to the people. Most of the schemes collapsed from lack of funds and people who wanted money, not work.
n Unemployment increased to a record 27 per cent, aided by the fallout of the make-work projects.
n When Jamaicans saw what was happening, they converted their money to US dollars through banks and the black market and moved their savings and other funds to US banks.
- Soon, the Bank of Jamaica ran out of reserves in foreign exchange, for the first time, and had to use funds set aside for paying debt.
- The BOJ could not supply the amount of foreign exchange to the banks, which were under pressure by business clients and others to pay bills for goods ordered by companies and to meet other demands for foreign exchange. In addition, there was a growing flight of capital.
- This resulted in a severe reduction of imports of raw materials and spare parts, closing down factories and increasing unemployment.
- Oil supplies were short, resulting in frequent blackouts and loss of factory time.
- Imported food items were so short that riots erupted at supermarkets when goods arrived.
- Small shops - 14,000 of them - either closed or kept one window open mostly to sell aerated water, Foska Oats, and toilet tissue.
The dismal performance of the macroeconomy was the result of deterioration over the previous eight years, 1972-1980, as revealed by the database published:
- The value of the total production of the economy (gross domestic product) in 1980 was 17.5 per cent less than in 1972, after decreasing every year but one.
- Inflation increased by 250 per cent, peaking at 49.4 per cent in 1978.
- While revenue remained almost constant over the period, expenditure increased by 66 per cent.
- The budget deficit, as a consequence, increased from 3.9 per cent to 17.5 per cent, one of, if not the highest, of any country not at war.
- The total public debt, as a percentage of GDP, increased nearly 500 per cent, creating a crushing burden in debt service;
- The level of investment collapsed by 40 per cent of GDP and savings by 53 per cent.
- Foreign-exchange reserves were wiped out, plunging from positive US$239 million to negative US$549 million.
- Economic growth was negative in seven of the eight years and less than one per cent in the eighth year.
NO BRIGHT LIGHT
There was not a single bright light in the economy over the eight wasted years. This was the one-of-a-kind global performance that led the World Bank president to declare to me that Jamaica had the second-worst economy in the world. (This could be compared with the view a decade before that considered Jamaica the fastest-growing developing country in the world in the late 1960s.) The pathetic performance was, in great part, because of a fallout in the productive sectors: agriculture, manufacturing, mining and construction declined.
Socialist governments operated by creating fear in those who criticised them. A state of emergency was called in 1976. It was opposed by the Special Branch Unit of the police force and the MI 5 of the Jamaica Defence Force, according to the evidence given to a commission of enquiry in 1978. Both Special Branch and MI 5 are responsible for detecting anti-government activity. Special Branch was not asked to advise. The head of Special Branch saw it for the first time in the press. The head of the MI 5, when asked, advised that a state of emergency was not needed. It was a secret operation carried out between Manley and a small number of politically supportive police officers. More than 500 people were detained, most being Jamaica Labour Party (JLP) supporters, including candidates, to stymie the political organisation of the JLP in the election year of 1976.
Men were taken from their homes, leaving their families without breadwinners. Some were detained on blank orders given to the police that were provided by the Minister of National Security for use at their discretion contrary to the constitutional requirement for the minister to satisfy himself, which he did not do.
The state of emergency ended after one year, June 1977, during which the PNP won a general election over the JLP, in December 1976, which saw many of its agents detained and the fearsome threats of detention driven into others.
Businesses of JLP supporters were raided, and even some homes, after midnight, as wives and children were terrified in their bed clothes. Churches were included. The Roman Catholic Church in Montego Bay was subjected to search.
Government wanted to censor all written news material. The Gleaner refused to comply. The stock market had plummeted until the price of one copy of The Gleaner cost more than one Gleaner share on the stock market.
By 1977, it was time to get out of the country, many people felt. Trailers with personal belongings rolled off the hills and other locations to the wharves for shipping abroad. The equivalence of 25 per cent of all the people trained between 1977 and 1980 gave up on Jamaica and migrated. It was the greatest migration of Jamaicans, as thousands left for America, Canada, and England.
In the meantime, those three countries that are Jamaica's major trading partners became more and more concerned at Manley's strident, anti-imperialist rhetoric aimed at them. Trading was reduced as loans for financing imports dried up. So, too, did aid from those countries as a sign of their disapproval.
As those resources dried up, Manley tried to use his ideological partner, the Soviet Union, for aid and trade. Little did he know that he was not as popular among the Soviet leadership as he thought.
The Soviets refused to speak about financial aid. The Government actually counselled him against carrying out any revolutionary action in Jamaica because it was a country with a democratic, two-party system and a Westminster model of government, and any attempt to topple these could result in civil war. The Russians did not want Jamaica to become a client state of the Soviet Union because they could not afford it.
The above information was provided by a Soviet Embassy staff member who had defected. This brief outline ought to be taken as a historical account of the impact of democratic socialism in Jamaica, which produced the worst period in Jamaica's history. Let us not follow up on that painful period. It would be strongly resisted.
- Edward Seaga is a former prime minister. Email feedback to email@example.com.