Edward P.G. Seaga became Prime Minister of Jamaica on October 30, 1980, after winning a landslide victory over the pro-Castro incumbent Michael J. Manley. Eight years of socialist rule had devastated Jamaica and Seaga was faced with the treasury that was literally empty. In fact, the Bank of Jamaica announced the day before the election that it had run out of foreign exchange. Tourism, a major source of Jamaican income, had dropped to an all-time low in the wake of deteriorating economic conditions and political violence. Inflation had skyrocketed, unemployment was at 35 percent, exports and imports had declined drastically, and investments in the country had plummeted more than 40 percent.
Now, one year later, Jamaica appears to be on the road to recovery both economically and politically. Prime Minister Seaga, a graduate of Harvard College (A. B., 1952) who became an international financial consultant and had served as Jamaica’s Minister of Finance and Planning from 1967 to 1972, has turned aggressively to free enterprise to stimulate the economy. In this exclusive interview, Prime Minister Seaga explains where Jamaica stood when he took office and where he believes the island nation should go.
Question: Mr. Prime Minister, when you took over just a year ago conditions in Jamaica were bleak at best. Will you outline for us the economic problems with which you were faced?
Answer: When the previous administration took over from my party in 1972, it inherited healthy foreign-exchange balances. During the eight years of the past government, all of Jamaica’s foreign exchange was entirely wiped out and a mountain of debt was left in its place. Jamaica suffered eight consecutive years of negative growth. More than 50 percent of our industrial capacity was idled. More than 50 percent of hotel rooms were vacant. One third of our bauxite capacity – Jamaica’s chief export – was in limbo. Over the same period, Jamaicans lost 57 percent of our standard of living as measured in dollars, and 20 percent of our gross domestic product. The economy had been totally ravaged. I don’t think even a war could have produced the sort of disastrous consequences that socialism did.
Q: What steps have you taken to restore your country’s economy?
A: First, we calculated the resources we would require for the growth we expected to experience as we freed the economy. To achieve a 12 percent growth rate over a three-year year period, we needed approximately 4.5 billion Jamaican dollars. That is about $2.7 billion U.S. dollars. We recognized that two thirds of these funds would be available from our own resources and that one third would have to come from abroad. Of that last one third, more than half might come in the form of multilateral and bilateral programs.
This left us with about 800 million dollars that must come from some other source, namely private investment. In order to secure that, one has to build the system that encourages such investment. We have done this, not only by freeing our economy but also through the establishment of the Jamaica National Investment Program and numerous other promotion trips including a meeting with your President Reagan.
Q: Barron’s, the financial weekly, has called you a “smashing success” at attracting investment to your country. You have also managed to secure millions of dollars in loans for Jamaica, including one from the International Monetary Fund and one from a consortium of eight major commercial banks headed by Citicorp of New York. Will these loans solve Jamaica’s problems?
A: They are a solution only in the short run. I have made it quite clear that we cannot borrow our problems away. The financial gaps which we faced when we took over the government could not immediately be closed by earnings, since we were left with very little in terms of new developments that would mature to the point of being a financial plus.
I made it clear that we had to start immediately to put in place new capacities for attracting foreign exchange. In order to do that, as I have said, I established the Jamaican National Investment Program (JNIP) to encourage local and foreign investment and help investors overcome any bureaucratic problems. I am happy to say JNIP reported just a couple of weeks ago that it is currently handling some 470 investment proposals. This totals over 1 billion Jamaican dollars or about $600 million U.S. dollars. Under the eight years of the previous government, the number of new investments could have been counted on two hands. Socialism, of course, discourages investment.
Q: And what has been the result of your strategy in terms of economic growth?
A: Surveys by the National Planning Agency, the Bank of Jamaica, and the Department of Statistics confirm that there has been an economic turnaround. The projection, depending on the agency, is that this year we will hold our own or grow as much as three percent. That is, we have already reversed the backward slide. Last year, negative growth was 5.4 percent, so we’ve come a long way. This year, by virtue of our substantial increase in foreign exchange, we have been able to expand the import budget for raw materials, and therefore have put many of our factories back to work. The tourism figures from May of this year have bettered the figures of 1980, and the bookings for the winter season are very healthy.
Insofar as the economy itself is concerned, we suffered a 30 percent inflation rate on the average for each of the past five years. By contrast, our rate of inflation to the end of September 1981 is just four percent. All factors indicate positive economic movement. Yes, we have a complete economic turnaround.
Q: Has the average Jamaican felt the impact of these economic developments?
A: I told everyone that economic recovery would take three years. That doesn’t mean that you have to wait for three years before you see benefits. The average Jamaican felt the result from the very first month of our administration, since Jamaicans had not known what it was like to have regular supplies of basic food items. Several thousand little shops in the hills of Jamaica had to close because they could not stock even the important basics: rice, meal, flour, oil, butter, and so on. As of last December, there have been full supplies of food. So, the people from Jamaica have indeed felt the impact of our turn away from socialism, and that is something of which I am very proud.
Q: You certainly have reason to be. Jamaica also had a serious unemployment problem during the Manley years. Has there been any change in that situation?
A: Unemployment has dropped by six to seven percent. But Jamaicans have not yet felt the full impact of our economic recovery in this area, because we took over the country that had no ongoing development. For employment, you need an industry; and for and for industry to build you need feasibility studies, financing plans, construction of factories, etc.
Improvement in agriculture also takes time. You must identify the land, plant and cultivate the crops, and wait for them to grow. You see, the last government destroyed all hope in the private production sector. People were so despondent that nobody was building anything; no one was starting new enterprises or expanding old ones.
Q: There was some concern in the U.S. that the marijuana crop in Jamaica seems to find its way into our country. What is your policy toward marijuana or “ganja” as it is called in Jamaica?
A: Our policy is the same as it always has been – it is illegal and we have no intention of making it legal.
The production of ganja grew in the 1970s when the economy found itself in great distress. Since last year, however, activity in the marijuana subsector has been considerably reduced. A study was recently done which concluded that marijuana cultivation in Jamaica totaled about 2,000 acres of our land. The earnings per acre were reported to be $3,000. That makes the total earnings of this illicit crop about $6 million. People often come to me and said that the marijuana industry totals $1 billion. Of course, we don’t have $1 billion in total export production. The fact of the matter is that it may have a much higher value after it leaves here, but it leaves here in the hands of people with no connection with Jamaica.
Q: Your predecessor as Prime Minister, Michael Manley, established a close relationship between Jamaica and Cuba. In fact, this alliance was a major campaign issue than last year’s elections. Members of Manley’s party told me this week that his relationship with Castro was positive for Jamaica and that you have blown this affiliation out of proportion. How do you respond to that?
A: We didn’t blow it out of proportion. We went just as far as Manley himself went. Manley described Castro as the rock and catalyst on which the socialist movement was based. And, indeed, his foreign policy duplicated positions taken by Castro.
I don’t know what they mean by a positive relationship with Castro and Cuba. The relationship with Cuba is one of the main reasons for the economic disaster that befell Jamaica. Jamaicans saw the possibility of our country being transformed into a society like Cuba. Such a society is assuredly not something that Jamaicans want. Jamaicans believe in the principles of individual liberty, civil rights, political rights, and a parliamentary democracy. The alliance with Cuba is one of the factors that contributed to eight consecutive years of negative growth – the only country in the world with that dismal record.
Q: Is communist Cuba a source of tension in the Caribbean?
Q: Can you give us an example?
A: I’ll answer that question for you tomorrow. [The following day, in a dramatic announcement to parliament, Prime Minister Seaga disclosed that for the first time in its history, Jamaica was breaking off diplomatic relations with Cuba. The Prime Minister said that Cuba had been harboring criminals, an action he called “an international disgrace.” He also said that there were other security reasons for his initiative.]
Q: Mr. Prime Minister, one reason the liberal press in our country that your party, the Jamaican Labour Party (JLP), seems to have folded its tent after your victory, while the opposition People’s National Party (PNP) is very active on the island. We are even told that early polls indicate some decline in the JLP’s popularity. How do you account for this?
A: There is usually some post-election decline in the popularity of any new government, but we have held our popularity right through the year. Most people didn’t expect that to happen. It happened because I followed a policy of encouraging growth in the economy rather than calling on people for more sacrifice, constraints, and reduction in demand and consumption, which was the policy of Michael Manley and his socialists. People had gone through eight years of that and couldn’t take anymore.
I am pleased to report that our popularity continues to be reasonably strong for a government that has been in power for just one year.
Q: My impression is that you had to spend your time trying to save your country rather than in politicking.
A: The opposition PNP always organized by using the political machinery. The political machinery can be used as a sounding board for propaganda. They tried to use it that way while they were in government. They spent all of their time doing politics, and that’s one of the reason why the country never advanced. They carried out an island-wide program of “political education” using government funds. It went nowhere. People were not interested. The Jamaican people are interested and finding better employment opportunities, in improving standards of living, reducing unemployment, and finding better employment opportunities. We were not elected to preach mere political ideology. So, our efforts to revive and recover the economy formed the basis for electoral appeal in the years to come. A good performance now will provide us with satisfactory results later.
Q: Have the PNP, and its leader Michael Manley, moderated their socialistic views since their resounding defeat in the polls last year?
A: The PNP has not changed since the leftist wing of the party took over its organization. They believe that the way to organize is to go out and preach socialism. They believe that they fail because they did not practice enough socialism and did not go far enough to the left. This is been confirmed for all to see since the election by the further enrichment of the left in the party and the fact that Manley, himself, has failed to shift one iota from his previous positions. The very factors that caused them to lose last time, have now been confirmed as their policy for the future. The party is not moderating his positions. If anything, it is going to be more radical.
Q: But they do give the impression that they are organizing politically …
A: One can give the impression of political organizing by sending out a lot of people to run around. But they have not gained anything. They haven’t gained any popularity. The popular vote fits into three sections in the polls: our JLP is still the dominant one, then the PNP, and then a much larger undecided vote. Jamaica traditionally has a 30 percent undecided vote. And the undecideds will gradually go to the JLP side. Given the PNP’s present policies, you can be sure that the undecideds will never go to the PNP side.
Q: Meanwhile, our liberal press assures everyone that Michael Manley is a formidable opponent in a charismatic figure. Do you worry about such a man waiting in the wings?
A: The constituency I represent in parliament is the poorest in the country. No other politician has ever represented it twice. This is my fifth term. I won with 96 percent of the popular vote – the largest majority in the history of Jamaican politics. People are mistaken if they believe Jamaicans can long be fooled by phrases or slogans. It is quite possible to capture the imagination in the short term with those things, but the Jamaican people are among the most sophisticated in any political democracy.
Q: A Manley government took Jamaica into the so-called nonaligned movement. What is Jamaica’s role in that group under your administration?
A: There are countries in the nonaligned movement that are genuinely nonaligned, and there are countries that are not. Unfortunately, over recent years, the prominence of those countries that are not really nonaligned has been more marked than those that are. Hence, the entire movement has been given the image of bias.
Jamaica has in the past played a very important and prominent role in terms of being a moderate, responsible member which can always be looked on to define the conciliatory role to obtain a consensus. We will still consider our role as that of a moderate government in the nonaligned movement and one that will seek solutions rather than advocate positions.
Q: I’ve been told that one of the biggest traffic changes in Jamaica over the past year is in the area of attitude. Is this true?
A: Yes. The tension isn’t there anymore. It’s now a relaxed society. People who have been here before feel the change the moment they get off the plane. Attitudes are part of that relaxation. The tension is gone and the old confidence has returned.
Q: Mr. Prime Minister, you were the first head of state to be invited to the Reagan White House. How did you get along with our president when you met last January?
A: I think we have a very good and strong relationship. We’ve met only on that one occasion, but our governments have re-established the bonds of cooperation that were in existence before. The elections of President Reagan and myself were of a sufficiently similar nature, to have aided that bond of collaboration. And, to a certain extent, we have similar policies: we both believe strongly in the private sector and want to create a climate for its future development.
Q: If you could ask for one specific policy initiative by the United States what would it be?
A: Buy more bauxite. We face very serious problems. The only way for us to overcome those problems is not to borrow our way out of them, but substantially to increase our earnings. We have to encourage expansion of our industrial and agricultural capacity. The only commodities that we have that a capital infrastructure already exist for tourism in bauxite.
We have done everything we can in the tourism industry. You have probably seen our advertisements. I am satisfied in that area. As far as bauxite is concerned, we have discussed with your government the possibility of purchasing it for your strategic minerals stockpile, and there has been an agreement for you to purchase some. But they have been some alarming cutbacks by U.S. companies, and this is presenting a serious problem for the future of our economic recovery program.
Q: One final question, Mr. Prime Minister. How would you describe your political philosophy?
A: It can be summed up quite easily. I believe in a market economy based on a politically democratic system of government in which revenues are used to provide only those social programs needed for persons who are not able to provide for themselves. By guaranteeing personal and political freedom as well as freedom in the marketplace, we in Jamaica are making our country an even better place in which to live.
This interview appeared in the November 25. 1981 issue of The Review of the News