182. Letter From Jamaican Prime Minister Manley to President Carter 1

Dear Mr. President,

I am very much looking forward to meeting you on December 16th and to the opportunity for discussing a number of issues on which we share a deep concern.

The main purpose of writing to you now is to give you an indication of our thinking on the proposed establishment of a Consortium or Consultative Group for the Caribbean Region which is to be the subject of a meeting in Washington on the 14th and 15th December.2 I feel that it might be useful to give you these indications on our thinking in advance of that meeting.

Thinking has been developing along the lines of a Consortium or Consultative Group for the Caribbean Region as a whole. We are in general agreement with this concept, but are equally aware that if the proposal is to achieve its real objective, care must be taken from the very outset to ensure that both national and regional development objectives are pursued simultaneously. Accordingly, it would follow that any mechanism which may be developed to deal with the problems of the Region should be so designed as to reflect an awareness of both national and regional priorities.

As we understand it, the proposed Consortium or Consultative Group will have as its first priority the provision of assistance in the implementation of development plans and programmes as envisaged by each recipient country or group of countries. To achieve this end, the proposed new multilateral effort must contemplate making available to the Region considerably greater financial and technological resources. Equally important, will be the necessity to ensure that the priority areas of each country’s development plan or programme will receive the necessary resources and that this should be done on terms and conditions which will not jeopardize future national economic and social development.

I know that you, for your part, are fully aware of all the factors which can act as constraints on implementation of even the most care[Page 447]fully formulated plans. As you may also know, we in Jamaica are now in the process of preparing our Five-Year Development Plan. An important part of this exercise is the precise identification of the total resource requirements of this Plan. Analyses indicate that the widening balance of payments gap is a fundamental constraint. What this brings out clearly is that any mechanism for assistance must take account not only of development needs per se but also of the country’s balance of payments problems. It is simply not possible to deal with the first without dealing with the second as well.

In this context I would now like to make a specific comment relating to the effect of the debt burden. In-depth study has revealed the paralysing effect of our debt obligations on the country’s financing capability. It is clear that this is a critical problem which has to be solved if any proposal for external economic assistance is to be truly meaningful. It might surprise you to learn that Jamaica’s debt servicing as a claim on Government resources now amounts to about one-quarter of our foreign exchange earnings, and the cost of servicing the total debt, including private debt, is nearly one-half of our foreign exchange earnings. I need hardly remind you that the cost of servicing private debt also has to be met from the country’s foreign exchange earnings. Because of the massive preemption of foreign exchange to service our external debts it will be impossible, without some mechanism of relief, to realize the necessary incremental inputs into our Five-Year Plan.

We are already pursuing a wide range of policies including incentives and the streamlining of machinery to stimulate and facilitate export development. However, it is clearly recognized that it will be some time before the full effects of these policies will begin to be realized. In the meantime for countries like Jamaica, our debt service payments have first call on our external resources and we are now living with the grim prospect of this continuing inhibition on the development and growth of our economy.

It is therefore patently clear to me that any Consortium or Consultative Group to be effective in terms of our development plans must contain adequate solutions for the problem of debt.

In view of the forthcoming December meeting, I felt that I owed it not only to Jamaica but perhaps to all the potential recipient countries to raise these points with you now. We will, of course, have an opportunity to discuss the matter further in our meeting, at which time the Washington discussions will have been concluded.

With warm regards,

Yours sincerely,

Michael Manley
  1. Source: Carter Library, National Security Affairs, Brzezinski Material, Brzezinski Office File, Country Chron, Box 23, Jamaica, 1977. No classification marking.
  2. The World Bank convened a meeting in Washington December 14–15 attended by 31 governments and 12 international agencies. The participants reached agreement to form the Caribbean Group for Cooperation in Economic Development. See Document 354.