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The 1970s: The end did not justify the means (Part 2)

Edward
Seaga

Sunday, December 02, 2018

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In a broadcast on the night of February 3, 1980 Prime Minister Manley placed emphasis on the need for a period of time for the electorate to settle whether it wanted Jamaica to have an International Monetary Fund (IMF) programme or not.

That was the tormenting question which his party was agonising about ever since the failure of the IMF test in December 1979. The IMF required a $150-million cut in budget expenditure for 1980/81 as a precondition for approval of a waiver of the failed test which would enable it to release the funds it was holding.

This was the dilemma facing the PNP Government and its supporters. The situation was not relevant to the thinking of the rest of the electorate who had other prime consensus in mind:

* the stated intent to place Jamaica in the non-aligned group of countries and to adopt features of Soviet- and Cuban-style models of society for Jamaica;

* the mismanagement of the operations of Government, especially the economy;

* the intensification of human rights abuses.

Manley revealed his inner feelings on the need to signal the holding of election in 1980. In his book Jamaica: Struggle in the Periphery, he outlined his first consideration:

“Firstly, it seemed to me that the Jamaican system was coming apart under the pressure of events. Such was the state of hysteria, tension, fear and bitterness in the society that I feared for our ability to continue to function effectively as a national community. It seemed pointless to me to continue to preside over a society increasingly succumbing to paralysis merely because I had the constitutional right to another two years in office. I reasoned that it must be better to create a situation in which the issue could be put to the vote and determined.”

This would truncate the second term of government to a period of four years if the election was lost, a replica of the position in the 1950s when Norman Manley reached a point of rejection by the people because of his federal adventure. He had to hold a referendum in 1961 and a general election in 1962, both of which were lost within three years into his second term.

Both father and son had taken Jamaica on adventurous courses into foreign waters which, in the case of the West Indies Federation, the people did not understand or want, and in the case of Cuba and communism, the people understood and feared.

It seemed to me that both Norman and Michael Manley suffered from the delusion that they could cast a spell over the people to change their future radically because, in their mind, the people had given them the electoral power to do so. Michael Manley, in particular, should have learned from his father's mistake, but he was too much of an intense political ideologue to be able to rationally change course.

In his election announcement, Manley was able to disclose that Libya had agreed to a loan of US$50 million for Jamaica. This was the news he was waiting for. This amount would see the country through the month of February ensuring that the problems of acute shortages experienced in January would not re-occur.

But the fund-raising efforts would have to continue to close the foreign exchange gap in March and beyond. How much further beyond would not be known until the budget presentation was made in May.

With the foreign exchange shortage not as critical as in January, Government could now turn its full attention to the big decision: how to deal with the IMF. The fund was the only reliable source of foreign exchange available.

The supplications to friendly countries would yield only some one-time benefits, whereas the IMF programme would cover multiple financing over a period, providing the agreed quarterly performance tests were passed. The tests were based on achieving maximum economic recovery in the minimum period. This approach sometimes attempted to push economic performance beyond tolerable limits. That was the situation facing Manley and the PNP in Ocho Rios, in March 1980, as they gathered for a decisive meeting at the level of the National Executive Council (NEC) of the party.

The IMF would grant Government a waiver of the last failed test in December 1979 if there was approval to enter into a new agreement in which the expenditure proposed for the 1980/81 budget would be cut by $150 million. Government took agonising decisions to trim many subsidies, cut specific social programmes, and offered to agree to $100 million in cuts. The $50 million would mean laying off 11,000 employees in the public sector, most of them workers in social projects such as the Impact (crash) programme.

The Government adamantly refused to take this step, particularly because 1980 was the national election year and if they lost because of their rejection of the IMF-proposed cuts, it would carry a great risk that the successful Jamaica Labour Party (JLP) Government would abandon socialism and it would die.

What was even more fearsome was that the September quarterly test of the proposed IMF loan agreement would be one month before the election. Failure then would doom the election to certain loss.

With this no-win situation, the NEC was summoned in March, really only to determine whether the decision should be to break with the IMF and if so, whether permanently or temporarily. In the circumstances even the more conservative wing of the party joined in a near-unanimous vote to discard the IMF agreement and to cease all further such discussions with the IMF, permanently. There was only one dissenting vote, the Minister of Finance Eric Bell, who resigned soon after.

This was a very far-reaching decision. Perhaps the Government did not fully appreciate the repercussions with bankers, bilateral lenders and other multilateral funding sources — doors would no longer be open to the Government of Jamaica in its approach for funds.

In these severe circumstances, the mission to raise financing from friendly countries to fill the gap created by exclusion of the IMF had limited success, as reported by the new minister of finance, Hugh Small, who presented a list totalling US$56 million in loans expected in his first budget presentation on May 18:

US$M

OPEC 13

OPEC Special Fund 10

The Netherlands 25

Federal Republic of Germany 8

This limited success would enable the Government to stave off the worst of the problems resulting from the shortage of foreign exchange for less than six months. That would cover the Manley Government up to the projected eve of the general election, if held in October. If the PNP won, it would have a new term of office to weather the storm. If the election was lost, the shortfall would be a problem for the JLP and would signal a continuation of the socialist system for the country.

The economic problems reached a period of temporary calm after presentation and approval of the non-controversial 1980/81 budget. It was now timely to consider Manley's role for some deeper insight into his thinking and decision-making.

He had led his party and Government into a dead end position by his pointed polemics, castigating the very sources from which support could come — the United States and other countries he branded as “imperialists”. Further, he showed remarkable, if not deliberate, insensitivity to the middle class and the local business community by willingly giving interviews in which he previewed other plans he had for the political development of Jamaica along the lines of the Cuban and Soviet model. These were frightening to this critical group, which he labelled “capitalists”.

He had only one exit strategy, the possibility of an alternative plan prepared by the radical left in the PNP and at The University of the West Indies. This plan showed no capability for dealing with the urgent need for foreign exchange in the immediate or medium term. Thus, he built a wall without knowing if he could surmount it, although he was intimately aware of the example of Cuba as a spectacular economic failure which confronted him daily. His ideological commitment must have been fanatically deep and his rational capability shallow.

At the root was a model of Jamaican society which Manley believed was structured in layers, in which he could peel off the top layers and get rid of them, even if by “five flights a day” to Miami, without uprooting and incapacitating the levels below. It was a tragic shortcoming and failure to lack the deeper understanding of the interdigitated, holistic structure of the society in which the fundamental changes which were necessary could only be achieved by pulling up, not pulling down, in order to achieve change without chaos.

Other issues were beginning to bubble up. The JLP was once again concerned about the emergence of a military solution in light of the extensive violence which was being carried out against its members since the beginning of the year. I had to issue a statement as leader of the Opposition on April 23 pointing out that:

* In the 110-day period between January 1 and April 13 there were 38 incidents of violent attacks on JLP members — one every three days;

* 22 JLP supporters were killed, nearly 900 made homeless by gangsters and/or burning of homes, and scores of persons wounded by gunshot or gang attacks;

* Preparedness of the security forces had been allowed to run down to the point where the Jamaica Defence Force (JDF) was only 20 per cent effective. Several planes in the Air Wing had to be cannibalised to keep others going. Only five of the 14 planes were airborne;

* The JDF lacked 200 communication sets, spare parts for radios, aircraft, vehicles, weapons, and ships valuing $3 million; tents, uniforms, and personnel equipment; troop-carrying trucks, jeeps, vans and petrol to operate motorised units, aircraft and ships.

* The police had more than half of its 1,000-vehicle fleet immobilised because of lack of spare parts, in addition to other equipment shortages. Petrol is now issued only by five-gallon vouchers to patrol cars.

These facts indicated that the security forces were incapable of meeting any serious outbreak of terrorism.

I accused the Government of wilfully running down the effectiveness of the security forces so as to leave the field clear for the terrorist section of its Cuban-trained Brigadistas, political Home Guards, police “death squads”, and party gunmen.

The Gold Street Massacre on April 21 was a good example of how the organised terror would work: “Approximately 100 men in uniforms landed by boats on a nearby beach (to Gold Street), attacked a police station by night — approaching in military fashion from four directions simultaneously, blocked off all escape routes and opened fire with sub-machine guns on a JLP dance, firing several hundred rounds, killing four and wounding 11.”

If the intent was to create a state of helplessness and call a state of emergency, as in 1976, I warned that the JLP was not in a mood to stand by and watch the imposition of any “military solution”.

The police were in no mood to be overrun either. The Police Federation, representing all members of the force to the rank of inspector, declared on May 28 its willingness to support the Government of the day but not in the face of “wilful immobility of the force, insecurity of police stations, covering up of illegal importation of guns and ammunitions… and allowing advertising of an inciting nature to be used against the police”.

In the circumstances thereafter, the Police Federation, at its 36th annual conference, passed a declaration of no confidence in Security Minister Dudley Thompson and advised that it was “unsafe and unwise for Mr Thompson to continue as minister of national security”.

This was an unprecedented statement but it came as a result of direct political threats and acts against the police by “politicians”. A certain prominent politician had been to a police station and because he was not treated with (obeisance), threatened to bring 5,000 armed men into action to do police work.

In the midst of this tense situation, a most curious event occurred. A trailer of shotgun cartridges and plain fabric arrived in the harbour of the Kingston Free Zone. It was consigned to Moonex, which turned out to be a parastatal organisation of the Government of Cuba.

The appearance was that it was a supply of ammunition from Cuba for the socialist ground forces, shipped to Jamaica via a safe State company acting as a conduit.

The matter was not that simple. The Cuban explanation was that:

• the shipment contained shotgun shells and plain fabric;

• it was consigned to Moonex International Establishment, a Cuban company operating in Jamaica since 1978. The company was operated by Mr Roberto Hart, a Cuban national who was paid from the Cuban Embassy;

• the shipment was in-transit, arriving from Miami.

Investigations revealed:

• the container was consigned to Kingston; it was not in-transit;

• Moonex was an unregistered company;

• Ambassador Ulyses Estrada reportedly disclaimed knowledge of Moonex although his embassy was paying the manager.

JLP General Secretary Bruce Golding called for the trailer, which had been moved to the JDF base at Up Park Camp, to be opened before the press and the Church. This was refused by Security Minister Dudley Thompson who insisted that it would be opened by the collector general without witnesses.

Roberto Hart was charged with a breach of the Firearms and Customs Act and fined $536,284.

— Edward Seaga, a former prime minister of Jamaica, is a distinguished fellow at The University of the West Indies and chancellor at the University of Technology, Jamaica

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