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Economic Globalization- Life and Debt The world is constantly becoming smaller and smaller as time progresses. A process of globalization is rapidly turning the world as we know it into economic opportunity waiting to be exploited. A large factor in this process is due to the advent of technology which is becoming more and more readily available to lesser developed countries. Countries such as Jamaica and other LDC’s are primary targets of economic globalization. In the film Life and Debt by Stephanie Black, we see the effects globalization has on Jamaican culture, industry, and agriculture.
In order to discuss the effects of globalization, it is important to assess what economic globalization is defined as. Economic globalization is the integration of the international economy through trading and investing. Scholars and analysts dispute many different concerns and aspects of globalization and its effects on LDC’s. It is imperative to recognize that many countries do not wish for a westernization of their culture. Many leaders of countries act under a policy of protectionism or isolationism and do not wish for their country to become part of a large international trade network.
Economist Stanley Fischer of the International Monetary Fund (IMF) believes globalization represents the integration of global economies due to various reasons. Some reasons for the assimilation of the economies are the decreasing price of overseas travel, and a large increase in international communication. In response to protectionist countries, Fischer advocates the opening up of international trade by cutting import taxes. The IMF loaned fifty million dollars to Jamaica and in effect Jamaica would lower their trade barriers.
Defending globalization, Fischer’s believed that Jamaica was better off being introduced into the international trade market and could integrate itself little by little with some help (Mussa). In contrast, the late Michael Manley, former prime minister of Jamaica, argues the “universalization of the market and commoditization of everything is leading to the elimination of cultural differences, fragmentation of social life, and disparities between the dominant and exploited classes” (Dupuy). When Manley first came to office he had isolationist views for his country.
He made it clear that Jamaica was an independent country that wouldn’t succumb to the demands of other countries. Contrary to what Manley stated, he eventually would give in to the IMF and had to watch as his country plummeted deeper into debt. Manley complained that the IMF would not let him use their funds to lend to farmers at 12% and instead they insisted on 22% which angered farmers. Jamaica’s economy was already fragile since they had just recently won their independence. The Jamaican people would start to notice that they were being exploited and that changes needed to be made. Jamaica’s economy was based strictly on agriculture.
When the tariffs were lowered, Jamaica was importing more than it was exporting. The country was moving deeper and deeper into debt. The imported food and goods from America were cheaper than the goods produced within Jamaica’s own borders. This led to farmers and other producers not being able to sell or produce their own goods for enough profit in order to keep their jobs. Market vendors started to complain because they couldn’t compete with the cheaper foreign food. The new supermarkets and grocery stores were making much more profit than the home-grown produced goods, which led to anger and frustration among farmers and producers.
Jamaica’s culture was becoming westernized with the increasing amount of imported goods, while American companies were becoming wealthy off the profits in Jamaica (Black). It was mission impossible for the farmers of Jamaica to keep up with the highly modernized equipment and production rate of America. A farmer in the movie mentioned, “Can machete compete with machine? ” Jamaican farmers simply didn’t have the adequate tools necessary for competition. Specifically, pertaining to the dairy farm industry, the lower tariff allowed for an increase of powder milk which eventually led to the downfall of the dairy industry.
The powered milk became such a commodity that the local produce dairy farms couldn’t sell their milk. A memorable scene in the film was when the dairy farmers had to spill out all their surplus milk that was only a days worth to make room for new milk since it wasn’t being consumed. A dairy farm used to produce 3,000 quarts per day and after America subsidized the milk industry, dairy farms were producing only about 600 liters. Dairy farmers were run out of their businesses and it’s sad to say but some dairy farmers were forced to convert to butchering their cows in order to make profit (Black).
The Jamaican economy in 1970 was 800 million dollars in debt and by the time of the year 2000 the debt had reached an alarming 7 billion dollars. In order to service its accumulated debts Jamaica set up Exporting Processing Zones or EPZ’s. The free zones created lots of employment to jump-start the economy. The free zones themselves were separate entities to Jamaica, similar to the US-owned cemetery for the WW2 soldiers in Normandy. In this way, the supplies needed for manufacturing never really enter Jamaica, thus allowing for cheap imports.
The factories had their downsides though. Workers were only paid in Jamaican dollars about 30USD per week while some were paid that for two weeks. Every two weeks, money was taken out as taxes which angered the Jamaicans even more. The labor laws were extremely strict and similar to slavery in that the workers had to work fast with hardly any time for breaks to meet a required amount of textile production. Eventually the Jamaicans started picketing and therefore Chinese workers were shipped in to replace them and were paid in American dollars.
The factories were soon closed temporarily and a majority of the workers were still not paid and eventually they were closed permanently. (Black). Something needs to be done in order to alleviate the problems of third-world countries like Jamaica who are struggling to implement themselves in the international trade network and solve their growing debt. Fair Trade is a non-profit social organization that helps farmers and the community “lift themselves out of poverty by investing in their farms and communities, protecting the environment, and developing the business skills necessary to compete in the global marketplace. Fair Trade justifies itself by setting standards in its program to make sure producers are treated equally such that all workers are guaranteed a minimum floor price, safe working conditions, child labor laws, direct trade, investing power, and environmentally sound materials. They also justify that those who benefit from the program are the producers, consumers, the industry, and the earth (Fair Trade). I believe that if Fair Trade were to step in to Jamaica and set itself up with a program that was nationwide and not region-specific that it could potentially work.
Agricultural imports would have to be strictly limited to the Fair Trade Program guidelines in order for complete success. Fair Trade policies would lead to an increase in the agricultural production once again since there could be a standard for the farmer that was equal and fair. More production of Jamaican produce in a more stable way could reinstate the Jamaican fresh produce demand and eliminate reliance on foreign goods. An increase in the surplus of fresh Jamaican produce could lower prices and lead to a more productive economy. Fair Trade doesn’t go without criticism however.
Liberals complain that, “Fair Trade doesn’t help enough farmers, provides do-gooder camouflage for evil corporations and, even worse, generates big profits for people other than the Third World growers” (Hancock). So it is possible that Jamaica and other LDC’s could potentially be exploited again and end up right back in the same position as they were. I believe Stephanie Black was trying to obviously evoke some emotional sympathy for the Jamaican people, when showing the farmers depressed and out of work and the ghettos outside the glitzy, sunny life of the tourist district.
Black wanted us to look at hot spots in LDC’s differently. Simply the fact that we visit these countries on vacation for our own pleasure because we can afford to, and hardly ever think about those indigenous to the country stuck in poverty is depressing. I believe the underground trading of illegal goods and drugs was left out of the film which could have been important to a larger understanding of the economy. I don’t think the Fair Trade movement will be able to succeed in Jamaica since it seems like it would be tough to implement throughout the country and would be hard to initially get funding to start up.
Bibliography Dupuy, Alex. “Thoughts on Globalization, Marxism, and the Left. ” JSTOR (1998). 5 Oct. 2006. “Fair Trade Overview. ” Fair Trade Certified. 29 Sept. 2006. 5 Oct. 2006 . Hancock, Jay. Fair Trade Federation. 16 Oct. 2005. 5 Oct. 2006 . Life and Debt. Dir. Stephanie Black. DVD. Tuff Gong Pictures, 2001. Mussa, Michael. “Globalization: Valid Concerns? ” IMF. 26 Aug. 2000. IMF Washington. 5 Oct. 2006 .