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Monday, July 26, 2010

Her Majesty's Governments - One Wise, One Foolish

Between Barbados and Jamaica (HT):

Turning from growth rates to levels gives a tangible sense of the impact of these growth-rate differentials on long-run standards of living. In 1960 real GDP per capita was $3,395 in Barbados and $2,208 in Jamaica. In 2002 Barbados’s GDP per capita was $8,434 while Jamaica’s was $3,165. The $1,187 income gap that existed between Barbados and Jamaica around the time of independence now stands at $5,269 dollars. Put another way, the income gap between the two countries now exceeds Jamaica’s level of GDP per capita.

A strange divergence. Until you consider what happened in Jamaica:

In 1972 the People’s National Party (PNP) rose to power under the leadership of Prime Minister Michael Manley (son of Norman) and the promise of “democratic socialism.” The two cornerstones of democratic socialism and the PNP’s economic policies were “self-reliance” and “social justice.” Self-reliance translated as extensive state intervention in the economy. The PNP nationalized companies, erected import barriers, and imposed strict exchange controls.

How often does this story have to repeat itself? 

Posted by Richard Anderson on July 26, 2010 | Permalink

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