According to an editorial in the Chicago Tribune, Jamaica is caught in a debt trap with more than half of its government spending going to service its loans.
Jamaica is actually is in worse financial shape than Greece: Jamaica has more debt in relation to the size of its economy than any other country. It pays more in interest than any other country.
The country can spend barely 20 percent of its budget for desperately needed health and education programs. Its infrastructure is faltering. It lacks resources to fight crime. It has tried to restructure its loans to stretch them out over more years, at lower interest rates, with no success. So Jamaica is trying to wangle a bailout from a skeptical International Monetary Fund.
To set itself straight, Jamaica needs a restructuring, and a bailout with significant debt relief. No way can a small economy that has limped along with growth at less than half the global average for two decades pay back the fortune that it owes.
The alternative is worse: Defaulting on its debt would ruin Jamaica's prospects for many years to come: It would undermine the island's critically important trade relations with the United States, and it would discourage badly needed foreign investment in its tourism, agriculture and mining sectors.
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