Jamaica has successfully closed its debt exchange with a staggering 97% uptake but there are suggestions that the transaction is insufficiently comprehensive to actually strengthen the country’s unstable finances.
At the end of 2009, the Caribbean island’s debt-to-GDP ratio peaked at 140% and interest payments on the debt sucked up 65 cents of every tax dollar earned. With upcoming amortizations included, 100% of tax revenues would have been spent on the debt burden.
"Jamaica has got a balance sheet problem in the public sector. The public sector’s debt is too high and it is choking off the ability of the private sector to access credit and it’s choking off any ability of the government to spend money on what it should be spending money on – such as education, roads and so on," says Carl Ross, managing director of investments at Oppenheimer & Co. ...
