Bankruptcy

[Sofisa]

Forgive me if this topic has been discussed, but what are the pros and cons, both long term and short term, if Jamaica declares itself bankrupt?

[johnnycakes]

Re: Bankruptcy

Sofisa,
Assuming you mean backing out of debt payments, you might be interested in knowing that despite warnings from many sources, Argentina did just that.

Their opponents predicted all sorts of dire consequences and the adverse effects did occur but only for a period of (I think) 4-5 months after which the Argentinean economy took off and they seem to be doing very well.

Several countries in Latin America have been helped out of deep indebtedness by Venezuela and the IMF and World Bank are slowly but surely being squeezed out of Latin America and countries are getting back on solid financial footings such as have not existed in decades.

As Fidel Castro said also decades ago, the Third World debt is unpayable and should be cancelled but the creditor/ robber nations, the neo-colonialist bastards that have been robbing the Third World for centuries do not give up their stranglehold easily.

Jamaica seems all too willing to remain a neo-colonial backwater in kowtowing to the wishes of their First World masters whether it's participating in the overthrow of the government in Grenada or continuing to pay and pay and pay it's own unpayable debt to the detriment of the country and it's people.

The first duty of any government should be to it's people and not to the rich bankers of the word.

Someone needs to remind the PNP and JLP of that fact.

I'll try to find the article I read on the Argentinean situation at Znet and post it for you.

[johnnycakes]

Re: Bankruptcy

Sofisa,
Here's a part of a very long article:
Some analysts have suggested that Cuba and Venezuela might even unite, a step towards further integration of Latin America in a bloc that is more independent from the US. Venezuela has joined Mercosur, the South American customs union, a move described by Argentine President Néstor Kirchner as "a milestone" in the development of this trading bloc, and welcomed as opening "a new chapter in our integration" by Brazilian President Luiz Inácio Lula da Silva. Independent experts say that "adding Venezuela to the bloc furthers its geopolitical vision of eventually spreading Mercosur to the rest of the region." At a meeting in Uruguay convened to mark Venezuela’s formal entry into Mercosur, Venezuelan president Chávez said that the organization must be "politicized": "We cannot allow this to be purely an economic project, one for the elites and for the transnational companies," a not very oblique reference to the US-sponsored "Free Trade Agreement for the Americas," which has aroused strong public opposition. Venezuela also supplied Argentina with fuel oil to help stave off an energy crisis, and bought almost a third of Argentine debt issued in 2005, one element of a region-wide effort to free the countries from the controls of the IMF after two decades of disastrous effects of conformity to the rules imposed by the US-dominated international financial institutions. The IMF has "acted towards our country as a promoter and a vehicle of policies that caused poverty and pain among the Argentine people," President Kirchner said in announcing his decision to pay almost $1 trillion to rid itself of the IMF forever. Radically violated IMF rules, Argentina enjoyed a substantial economic recovery from the disaster left by IMF policies.

[Dr.Dudd]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Sofisa</div><div class="ubbcode-body">Forgive me if this topic has been discussed, but what are the pros and cons, both long term and short term, if Jamaica declares itself bankrupt? </div></div>
If Jamaica could declare bankruptcy. It would mean that it's creditors would have a right to it's assets in exchange for their debt.
Since bankruptcy is the position of insolvency. Or where it's debt is more than it's assets.
Now It would not be in the interest of Jamaica to declare bankruptcy, because it's debts is not as much of it's total assets.
On the other hand You may be thinking of Chapter 11 (protection from bankruptcy). This is the reorganization of debts, so as to give the American Business the opportunity to improve it's cash flow and continue business .
Well Jamaica is not a business, neither is it American.
That is law in the US, it does not relate to Jamaica.
Jamaica is also probably a unique position where it has in it's constitution a law requiring it to pay it's debt. So any creditor could take such action to the Jamaican supreme court and have it thrown out.

[Gen]

Re: Bankruptcy

suh wah yuh a seh ? dem muss borrow money and nuh pay it back [img]/forums/images/%%GRAEMLIN_URL%%/70402-thinking.gif[/img]

mi a guh try see if mi can borrow some money and nuh pay it back and see if mi can get weh wid it

[johnnycakes]

Re: Bankruptcy

Geneva,
What you fail to understand is that in almost every case of Third World debt, the heavily indebted nations have long since paid back what they borrowed IN INTEREST alone which is often all they can afford.

It's just like the credit card debt in the U.S. in which millions have maxxed out their cards and can only pay off the usurious 18-20% interest rate.

These loans from First World bankers to poor Third World countries are no more and no less than neo-colonialism.
In the old days they sent in an army, occupied the country and stole whatever they wanted.
Nowadays, they rob you with the pen with which Third World countries sign the loan agreements.

Not only that but think about how many banana republics with thieves for leaders make huge loans and then put huge sums of it into Swiss bank accounts before they are run out of the country. The country and really, the people are left holding the debt.

It's no less than slavery and colonialism dressed up in modern clothing.
It is also as immoral.
The Bible says so, the Quran says so.

[Gen]

Re: Bankruptcy

what I fail to understand ? [img]/forums/images/%%GRAEMLIN_URL%%/70456-eyebrows.gif[/img] buh yuh nuh easy [img]/forums/images/%%GRAEMLIN_URL%%/704555_dwl.gif[/img] [img]/forums/images/%%GRAEMLIN_URL%%/70394-bawlout.gif[/img] [img]/forums/images/%%GRAEMLIN_URL%%/704555_dwl.gif[/img]


If you(generally speaking) cannot afford to repay loans don't borrow money ? same goes for consumers in the US. if they cannot afford to repay credit card debt, don't apply for the cards.

countries a gwaan like dem nevah know IMF policies before dem guh borrow money. and where did most of the money borrowed by Jamaica end up ? [img]/forums/images/%%GRAEMLIN_URL%%/whistle.gif[/img] smaddy please . cause all now mi can't trace it

anyway unnu carry on [img]/forums/images/%%GRAEMLIN_URL%%/70409-waytogo.gif[/img]

[RichD]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Geneva</div><div class="ubbcode-body">suh wah yuh a seh ? dem muss borrow money and nuh pay it back [img]/forums/images/%%GRAEMLIN_URL%%/70402-thinking.gif[/img]

mi a guh try see if mi can borrow some money and nuh pay it back and see if mi can get weh wid it </div></div> nuff pp do dat al di while ...dem still have debtors prison a US ?

[johnnycakes]

Re: Bankruptcy

Geneva,
As with credit cards and in the U.S. mortgages on homes, the lenders make their sales pitches so appealing that it is hard for desperate countries and poor home buyers to resist.
In the case of the home buyers, the lenders fool with the figures to make the borrowers think they can afford the payments which then turns out not to be true and the borrower loses his house and his money.

In the case of the intermnational lenders, they make their pitches in much the same way but to the elected officials who are not the ones who have to pay back the loans.
So you have desperate leaders like Manley and Seaga et al who have all the best intentions in the world and who have what they feel are some good ideas for using the money to develop the country in such a way that will make the economy grow and be able to pay back the borrowed money.
The schemes go sour and the money goes down a crabhole and the people of the country are left holding the bag.
In some, many cases the money is stolen in one way or another by corrupt politicians and by corrupt contractors,
Then when the countries are really in the hole they keep on coming up with ideas to build the economy to pay back the loans and so need to borrow more money to put those plans into effect. This is often accompanied by restructuring the original loans to get longer payback times.

The debt piles up and many countries wind up so deeply in debt that they are only able to pay the interest for long periods of time with no way to ever pay off the principal, the original loan amount.


As you said , where did all the money go that Jamaican governments borrowed?
Down a crabhole or in smaddies pockets or in many cases into schemes that just did not work.

As I said, the colonialists may have taken their armies home but they keep on draining the life blood of their former colonies and even more effectively then when they controlled things directly politically and militarily.

The more things changed, the more they stayed the same.

Jamaica might consider making an appeal to Venezuela for help in paying off it's debt and getting better terms.

The First World will never allow debt forgiveness so there is not much choice.

[Gen]

Re: Bankruptcy

mi said "where did the money end up ?" [img]/forums/images/%%GRAEMLIN_URL%%/whistle.gif[/img]

[Dr.Dudd]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Geneva</div><div class="ubbcode-body">mi said "where did the money end up ?" [img]/forums/images/%%GRAEMLIN_URL%%/whistle.gif[/img]

</div></div>
Jamaica did not owe the IMF until the oil crisis of the e70's. That was when the oil producing countries decides that they want more for their oil than the international OIL producers were paying. All of a sudden oil price increased 10 +folds.
The IMF does make loans unless the money is being paid to a creditor on the behalf of the debtor country. So the IMF funds end up In the pocket of the countries that supplied Jamaica with basic goods that it could afford to purchase before the oil crisis.
The people had to eat, and the country had to be run So the bills had to be paid.
Jamaica under Michael Manley raised the price of the bauxite to see if the country could pay the bills without taking loans. The Us reacted by creating a public relation battle that destroyed the tourism income. While they closed some of the bauxite corporations. Jamaica retaliated by nationalising the lands and lease it back to the corporations, and at the same time found markets in Russia for bauxite. With all of these actions. Jamaica still could not pay their basic oil and commodities bill. So they went to the IMF. So is one sentence. The money went to the suppliers of oil, medications, etc and other basic commodities required for the day to day running of the country.
Any responsible government would have done it.

[Sofisa]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: johnnycakes</div><div class="ubbcode-body">Jamaica might consider making an appeal to Venezuela for help in paying off it's debt and getting better terms.

The First World will never allow debt forgiveness so there is not much choice. </div></div>

Thanks for the posts, and I did find and read the rest of it.

I think that Jamaica need to seriously do the math on the national debt. With some 70% of revenue going towards interest payment, (I believe), then name, specically, the expected date of the last payment, and the total cost to the country. I think if this is done, then the ppl could see the real picture, and be prepared to swallow the bitter pill required to remedy this situation.

I am sure that at a personal level, and even at a corporate level, no entity would continue to operate. I don't think that just because we are talking about a country, it is right to for the govt to keep "wasting" money on a seeminingly impossible task.

Would be grateful if someone shed some light on the # of years and cost for this debt to be eliminated.

[Sofisa]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Dr.Dudd</div><div class="ubbcode-body">If Jamaica could declare bankruptcy. It would mean that it's creditors would have a right to it's assets in exchange for their debt.
Since bankruptcy is the position of insolvency. Or where it's debt is more than it's assets.
Now It would not be in the interest of Jamaica to declare bankruptcy, because it's debts is not as much of it's total assets.
On the other hand You may be thinking of Chapter 11 (protection from bankruptcy). This is the reorganization of debts, so as to give the American Business the opportunity to improve it's cash flow and continue business .
Well Jamaica is not a business, neither is it American.
That is law in the US, it does not relate to Jamaica.
Jamaica is also probably a unique position where it has in it's constitution a law requiring it to pay it's debt. So any creditor could take such action to the Jamaican supreme court and have it thrown out.
</div></div>

Firstly, if the Constitution is not in the interest of the ppl, then think an ammendment is definately in order.

If Jamaica has that much net worth, then it must be that the assets are not being utilized properly, no?

Which court would determine what assets are to be seized by the creditors? If assets were seized, then who would buy them, and at what price considering most likely the State's assets are not portable? If so then maybe there is indeed serious leverage for a restructuring.

[Sofisa]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Geneva</div><div class="ubbcode-body">suh wah yuh a seh ? dem muss borrow money and nuh pay it back [img]/forums/images/%%GRAEMLIN_URL%%/70402-thinking.gif[/img]

mi a guh try see if mi can borrow some money and nuh pay it back and see if mi can get weh wid it </div></div> nuff pp do dat al di while ...dem still have debtors prison a US ? </div></div>

@ Geneva, I think that yuh shouldn't borrow what you can't pay back. IMO, it is better to be dept free and out of style than to be up to your eyeballs in debt, and running with the crowd. However, there must come a time to take a realistic look at your finances and decide wether to make the next payment, or take your child to the doctor for the nagging cough for which you have been giving cough drops.

Btw......... I too wonder where that money went. It seem to be gone in perishale and disposable prodcts / services.

@ RichD, last time I check, There is no debtor's jail/ prison in USA.

[Dr.Dudd]

Re: Bankruptcy

<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Sofisa</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: RichD</div><div class="ubbcode-body"><div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: Geneva</div><div class="ubbcode-body">suh wah yuh a seh ? dem muss borrow money and nuh pay it back [img]/forums/images/%%GRAEMLIN_URL%%/70402-thinking.gif[/img]

mi a guh try see if mi can borrow some money and nuh pay it back and see if mi can get weh wid it </div></div> nuff pp do dat al di while ...dem still have debtors prison a US ? </div></div>

@ Geneva, I think that yuh shouldn't borrow what you can't pay back. IMO, it is better to be dept free and out of style than to be up to your eyeballs in debt, and running with the crowd. However, there must come a time to take a realistic look at your finances and decide wether to make the next payment, or take your child to the doctor for the nagging cough for which you have been giving cough drops.

Btw......... I too wonder where that money went. It seem to be gone in perishale and disposable prodcts / services.

@ RichD, last time I check, There is no debtor's jail/ prison in USA. </div></div>
That is common sense,but common sense can't run a country any more than it could be used to run a business.
If every country or business should be run on those principles,their would only be poverty stricken third world countries and corner stores that can't bay their bills.
Even a young person have to borrow beyoud their means to pay college fees,and hope that they will be able to repay it. Otherwise there would be mostly low skilled population in most countries. That would keep the the countries poverty stricken.