The "better" the rate is for us travelers, the more expensive it makes things for Jamaicans. When I first visited Negril the rate was 50 to 1.
The "better" the rate is for us travelers, the more expensive it makes things for Jamaicans. When I first visited Negril the rate was 50 to 1.
Sing unto God, sing praises to his name: extol him that rideth upon the heavens by his name JAH, and rejoice before him. KJV Psalm 68:4
Any idea what is causing their dollar to drop?
Originally Posted by davevols
The Jamaican economy is heavily dependent on services, which now account for nearly 65% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina. Remittances account for nearly 15% of GDP and exports of bauxite and alumina make up about 10%. The bauxite/alumina sector was most affected by the global downturn while the tourism industry was resilient, experiencing an increase of 4% in tourist arrivals. Tourism revenues account for roughly 10% of GDP, and both arrivals and revenues grew in 2010, up 4% and 6% respectively. Jamaica's economy faces many challenges to growth: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of more than 120%. Jamaica's onerous public debt burden is the result of government bailouts to ailing sectors of the economy, most notably to the financial sector. In early 2010, the Jamaican government created the Jamaica Debt Exchange in order to retire high-priced domestic bonds and significantly reduce annual debt servicing. Despite the improvement, debt servicing costs still hinder the government's ability to spend on infrastructure and social programs, particularly as job losses rise in a shrinking economy. Jamaica was hard hit by the effects of the global economic crisis, experiencing economic contractions from 2008-10 and growth remains low. The SIMPSON-MILLER administration faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments, while simultaneously attacking a serious crime problem that is hampering economic growth. High unemployment exacerbates the crime problem, including gang violence that is fueled by the drug trade. As of late 2012, the SIMPSON-MILLER government was working to negotiate a new IMF Stand-by agreement to gain access to additional funds.
I guess being broke, high unemployment, low exports, poor literacy rate, etc. has a lot to do with it and.... for many years, they have been buying foreign goods and services instead of items produced in their own country. Like the US, China and Japan (among many countries) hold the debt.
If they don't get an IMF deal, they are in danger of defaulting and then the currency will go through the roof and chaos could be the result and, even if they do..... the belt tightening necessary to dig themselves out will be long and painful.
I pray for my country every day.
Peace and Guidance
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The plunging value of the Jamaican dollar has been correctly tied by some to the lack of a new agreement on IMF loan/debt restructuring. As the Ja $ drops in value to the US $, it quickly translates to inflationary pricing. For example, think of the route taxi driver, getting paid in Ja $, and fueling his taxi with gasoline derived from foreign oil priced in US $. The driver's costs go up because his gasoline bill will have shot up, and he will then seek increased fares. It is not correct to think that we, as tourists, will benefit from a weaker Ja$.
I think the Captain might be able to confirm that when the exchange rate was 88 cents Ja to 1$ US costs in Jamaica were lower in real terms.
God help all our Jamaican friends.
Last edited by sunray; 04-03-2013 at 09:13 AM. Reason: add another comment
Well, not exactly Ras Walleye.
When the Jamaican Dollar is worth less, the tourists who pay in Jamaican Dollars just pay more. An example is like a meal that was once $10.00 US and a Jamaican Equivalent of $500.00 (using your 50 to 1 rate) is now probably $900.00 or $1000.00 Jamaican. Yes, you can afford it as it still costs you $10.00 but now many Jamaicans can't afford to eat there.
The only thing positive about the new exchange rate makes it easier for tourists so when they see a Jamaican price of $1000.00 they can quickly see it is almost $10.00 US.
BTW, when I first went to Jamaica they money was worth MORE than the US money. Boy, how times have changed.
Peace and Guidance
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the rate has gone up alot since the start of the winter.....
mi remember the days of $1.78 to 1 in the early 80's........
anyone remember the $2 Jamaican bill........
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So would it be better for the Jamaican people if I pay in US money? Forgive me if it's not a "bright" question. My husband tried to give me an Economics lesson last night about this...but my brain must not be wired to understand this.... I remember when we first went exchange rate was 58:1.
Murf handles all the money/buying in Jamaica for me. I just take him along when I want to buy something. I can't do the calculations fast enough (or EVER!) and can NOT haggle on prices! Just can't do it.
I try to buy as much as possible from local restaurants and from beach vendors while we are there. So- after that rambling- my question is would locals prefer to be paid in US? I mean- wait- I guess it doesn't matter either way- because if I pay in J- then it's just more J anyway. See?? UGHHH... I just can NOT get this thought process right!
In the "old days", paying in US rather than Jamaican was a big deal as the average Jamaica could not obtain foreign currency in any other way. You have seen the "money changers" in the roundabout and other places around Jamaica, correct? Well, this started back in those days. People would actually fight over who could give you the best deal. Now, the difference is really non-existent or scant so these people try to "shorta" you on the exchange or slip in counterfeit whenever possible.
Today, Jamaicans can get foreign currency in the banks and exchange as well with no problem.
The only thing as "tourists" that we can do is (like you said "buy as much as possible from local restaurants and from beach vendors". Putting money in Spanish-owned or AIs mostly means their workers get low wages and the money goes to offshore accounts (in non-Jamaican currency) where it is safe from the rapid inflation. It used to be a crime (don't know the penalty) to take Jamaican money out of Jamaica when you leave. Now they just probably say, "good riddance"!
Peace and Guidance
Free Opinions Offered. No tipping required. Hours: Open when I feel like it.
Respect Accompong, hope to see you in August.
Sing unto God, sing praises to his name: extol him that rideth upon the heavens by his name JAH, and rejoice before him. KJV Psalm 68:4
Jamaica,like the US should just legalize weed,create jobs,tax it to death,reduce the power of the drug gangs who pay no tax and also dont pay to incarcerate a guy for simple possession,the price will go down for the buyers.Win/Win....The US says weed is bad bad but have Mothers Day scratch off lottery tickets advertised on Govt sites.
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