I admit I have a troubled relationship with capitalism, I really dislike it and yet I gotta accept nothing else tried so far had worked better. One way I am trying to make sense of this is the concept of visible and invisible capitalism. Visible capitalism is the store or factory down the road. They cannot get too exploitative, because they are visible. Invisible capitalism is... dunno. Something like money and paper going around the world, banks, stock exchanges, investment funds, government bonds. This is where the real shenanigans can happen, because people are not seeing it and cannot just go there and make a big scary demonstration.
For a number of years I contracted as personal security for personalities, musicians, etc. I worked a couple Reggae Sunsplash Tours with Jamaican bands. We would always finish with a huge concert in Kingston so I’ve spent some time there. Beautiful place. Thanks for an economic background of the country itself.
The ambassador doth protest too much. Irving is being sensationalist. Jamaica's murder rate in 1976 was 15 per 100000. The same as Botswana currently. With murders occurring far away, in about 6 political garrisons consisting of poor urban ghettos. And ambassadors are not stepping over bodies in Botswana, now, are they?
Manley's induatrial policies were mainly a continuation of the prior JLP administration. What got him in trouble was notbeven commodity issues but a massive Keynesian spending program that 1. Depleted foreign exchange reserves to a very negative number 2. Money printing that took up 13% of GDP (63% of government consumption) 3. Overreliance on domestic and foreign credit. This is what really sunk him, not the oil price spike. External borrowing from foreign commercial banks. The interest rate on most loans jumped from 3% to 18% by the mid-70s.
A (very famous) bauxite levy on the mining companies was Manley's attempt to get bauxite revenues to fund the above. We were basically giving it away (a token tax) prior to the bauxite levy. After a failed attempt to make a bauxite OPEC, and to obtain an aluminium smelter (the actual value add), he had to give up as the companies shifted to Guinea and Australia (lower taxes).
SEZ stagnation can be explained by one abbreviation - NAFTA.
Manley's affinity for our local Jewish/Lebanese capitalist family grouoings made him the exact opposite of a socialist. I would suggest you read "The decline and fall of Michael Manley: Jamaica 1972-1980".
This article has made me rather wary of this substack. I will have to make sure to double-check your articles from now on.
Thank you for your thoughtful feedback! I appreciate your skepticism and willingness to engage with my article. I just wanted to note that in my article I even said "hyper quick overview of Jamaica" and "I didn't dive deep into Jamaica's economic history here," because I was focusing on its relationship with commodity traders. I'm happy to address your points and provide further clarification:
1) Jamaica's 1976 murder rate:
I would love to get the link to the 1976 Jamaica murder rate because I cannot find it.
However, even if I take your number at face value. Jamaica's 1976 15 per 100K homicide rate is higher than Botswana which is at 11 per 100K. These aren't equal. Also, 15 is higher than Ecuador or Haiti's right now which is 13 per 100k.
Both statements are true at the same time. I focused on the current account deficits, rising oil imports, constant borrowing, and falling commodity prices while you mentioned the Keynesian spending, foreign reserve depletion, overreliance on credit and money printing. None of what you say negates what I was saying, in fact these are interconnected. Current account deficits, lower commodity prices, and higher oil imports all lead to foreign reserve depletion. Also if you run continuous current account deficits, you are also borrowing to finance spending hence foreign borrowing from banks as you mentioned.
3) The bauxite levy
My point: I discussed the significance of the bauxite levy as a key policy by Manley to capture more revenue from Jamaica’s resources.
Your point: You point out that the bauxite levy backfired when companies shifted operations to other countries like Guinea and Australia to avoid higher taxes.
The whole point of me bringing up the bauxite tax was that he was trying to increase Jamaica's share of the profits from its resources, which goes back to my point on resource nationalism. While you are saying the bauxite had unintended consequences. This is true but doesn't really negate what I said, just adds more context.
4) SEZs & Nafta
In this point, I said "I didn't dive deep into Jamaica's economic history here," I just made an observation about the SEZs not working. I didn't go into depth why. But yes, NAFTA absolutely diverted investment and trade opportunities away from Jamaica.
5) My point was that Manley is a socialist leaning person, while you say his close ties to local capitalist families makes him less of a socialist. Both are true at the same time. Manley's policies particularly in the early years where indeed socialist leaning. There are many forms of socialism or interpretations "public control of the means of production". Some people argue that true socialism is when the state is abolished and workers own everything like Orwell's Homage to Catalonia. Some people argue that public control means workers own firms and the state supports worker ownership like the former Yugoslavia. Some argue that public control means the state, which is supposed to represent the public, owns the firms especially if they are at the "commanding heights" like banking, natural resources, and etc.
Manley took state control of industry, banking, sugar, insurance, telecom, & electricity, which is a form of socialism. However, he also had ties with business and allowed private sector involvement in tourism, manufacturing, and agriculture from the Jewish/Lebanese firms you mentioned. He is still a socialist, but he was also a pragmatist.
Thank you again for the feedback and I hope this clears things up. I will read the recommended book, and I hope you understand my perspective that I felt your points added context, instead of negating them. I even mentioned that I was speed running through the history to make my points about reaching out to commodity traders.
I link everything so you can read the books and hyperlinks I linked if you want!
Heavy industry (monoplies like Carib Cement for example), tourism, and construction for ecample , the monopoly WIHCON) remained under capitalist control. Manley took state control by paying full dollar value of the the other assets. They were sold to him (telecom especially) because they were underperforming. That is not exactly seizing the means of production a la Marx.
The bigger issue as I hinted at however, is not the commodity, but the value-add. Unless they move up the value chain, commodity producers are going to stay poor. Singapore isn't Texas, but that didn't stop it from becoming the Houston of Asia.
And while I will be first to decry Singapore comparisons, this applies as much to SSA and Caribbean nations as it does SEA ones. Manley may have taken the 51% stake in bauxite lands - but alumina processing remained in foreign hands. So we were not making much of any money (the '74 education budget alone absorbed the levy) but just getting by. Nations and companies only get head when they are grinding their own diamonds, refining their oil and making their own chocolate. Leaders like Manley and Seaga did not understand (or care about) this. I suspect this to be the case in much of SSA as well.
It is also odd that you left out the role of international bankers in our dealings, especially BCCI. They are the ones who put sellers with buyers, as well as provide leveraged funds. SSA and Caribbean countries have to develop strategies to control their own commodity markets - buying and selling. And do so quietly. There is also the issue of leaders relying on personal relationships instead of local technocrats trading commodities. Seaga called a friend from undergrad when we had oil problems. Manley called up his friends from Scandinavia during the '73 oil crisis.
The pooulation between 1972 and 1980 was 2 million. Note that murders doubled between 1972-1976. But even at that rate, (9 to 19 per 100k) no ambassador is stepping over any bodies.
#1: Even though heavy industry, tourism, and construction remained under capitalist control, Manley's decision to nationalize other assets at full dollar value doesn't negate his socialist or socialist-leaning tendencies.
Socialism encompasses a range of economic systems where the state or community owns and controls businesses. For instance, pre-Spanish Civil War Catalonia featured worker-owned co-ops without state involvement, while Yugoslavia's state supported worker co-ops. The Soviet Union is the more classic example, where the state owned virtually everything. If we talk about African socialism, like Kwame Nkrumah, commanding heights of industry was owned by the state while there was still small businesses and a smaller restricted room for the private sector. Nationalizing banks, telecoms, and other industries—even at full purchase value—is still a form of socialism because it places key economic sectors under state control. Whether Manley expropriated or nationalized these businesses is irrelevant; as long as they are under public (state) control rather than private ownership, it's socialism. Socialism isn't just about seizing assets; there are many forms, as Marx wasn't the only socialist thinker.
Sankara of Burkina Faso both nationalized and seized assets, yet major firms, hotels, and restaurants remained owned by French businessmen like Jacques Aubaret. Allowing some private enterprise doesn't mean one isn't socialist or socialist-leaning.
#2
I looked in your stats. In 1976, it says 367 people were murdered.
The population of Jamaica at the time was 2.029 million:
If I put this number in per 100K death rate like the world Bank
that's 18 people dead per 100K people, which again is higher than Botswana, Haiti, or Ecuador today. That proves my point about the violence in Jamaica back then...
#3: You mentioned it's 'odd' that I left out international bankers, but this article focuses on commodity traders, and I aim to keep my posts under 15 minutes to read.
#4 - the are many strategies to export refined goods.
There are various strategies to export refined goods. For example, Ivory Coast's refinery in Abidjan, initially French-built, now enables the country to export more refined petroleum than crude—surpassing even Nigeria. Both Ivory Coast’s first President, Houphouet-Boigny, and its current President, Ouattara, are known Francophiles.
Nigeria used to have four government-owned refineries, but due to mismanagement, they are all down. Now the state supported Dangote, Nigeria's industrialist, to build a massive refinery in Nigeria.
Mauritius did the SEZ strategy to get textile manufacturing. There's no one-size-fits-all approach to fostering manufacturing.
Yea I there are plenty examples of commodity traders losing money or going bankrupt. That will be a substack for another time. I'll go more into the commodity derivatives market to show how some firms have lost money.
But yes commodity traders like Glencore or Trafigura have the best real time knowledge base and logistics network in the world.
A government really shouldn't go to Glencore or these firms, but they do so either of desperation or corruption or all of the above.
You are Mostly Right. But I'll fill in some details. IMF loans used to be non conditional, but the conditions actually started in 1952. But, it was during the 1980s that the IMF implemented Structural Adjustment Programs (SAPs), which imposed much stricter austerity conditions.
Regarding IMF loans, interest rates vary depending on the type of loan. IMF loans are generally more favorable than those from private lenders, Eurobonds, or commodity traders. However, in the 1980s, global interest rates were exceptionally high, with some IMF loans reaching interest rates as steep as 12%, which goes to show how absurdly high interest rates were back then. Even though 12% was "generous" at the 1980s, with falling commodity prices, you had countries spend more on interest payments than education, infrastructure, or healthcare.
Some examples of IMF Loans:
Non-concessional loans, such as the Stand-By Arrangement (SBA), Rapid Financing Instrument (RFI), and Extended Fund Facility (EFF), typically carry a margin above the SDR rate. In the 1980s, SDR rates ranged between 8% and 12% based on the IMF’s calculation formula—a rate that is significantly higher than today’s 3% to 4% range in 2023-2024.
The SDR rate is calculated as a weighted average of short-term (3-month) government bond yields from a basket of major currencies. Today that includes the U.S. dollar (USD), euro (EUR), Chinese yuan (CNY), Japanese yen (JPY), and British pound (GBP). For instance, current rates are approximately 5% for the U.S., 3.85% for the Eurozone, 5.3% for the UK, 0.03% for Japan, and 2.5% for China. Then you weight them up with their formula.
However, for low-income countries, the IMF offers concessional loans under facilities like the Extended Credit Facility (ECF), Standby Credit Facility (SCF), and Rapid Credit Facility (RCF), which currently have a 0% interest rate.
Do you think the incentive to intervene in exchange rate will go away or at least become lower if there is a long term decline in global energy prices?
I suppose if you have unstable export revenues due to commodities and you're importing food and fuel you'll still see exchange rate interventions.
My assumption is in 2026-2028 the structural decline in fossil fuels prices will begin. By the 2040s the number of energy independent countries will double.
Better than the IMF would be a externally managed insurance fund or sovereign wealth fund for commodity exporters that don't have the capacity to build their own. But as long as the IMF is around to rescue African leaders they'll never go through it.
Surprised to see so many upper middle class Americans be interested Africa's economic situation. Perhaps that's the general demographic for Substack.
Perhaps people who sound like upper middle class Americans are not necessarily so. It is just usually assumed, because, lol, Internet Default Country.
"The oil crises caused Jamaica and much of the developing world to run massive current account deficits"
This was a policy choice. Good or bad it was a choice.
I admit I have a troubled relationship with capitalism, I really dislike it and yet I gotta accept nothing else tried so far had worked better. One way I am trying to make sense of this is the concept of visible and invisible capitalism. Visible capitalism is the store or factory down the road. They cannot get too exploitative, because they are visible. Invisible capitalism is... dunno. Something like money and paper going around the world, banks, stock exchanges, investment funds, government bonds. This is where the real shenanigans can happen, because people are not seeing it and cannot just go there and make a big scary demonstration.
Highly recommend The World for Sale by by Javier Blas and Jack Farchy (reviewed in one of the links up top). It's highly informative.
One of the best books I've read.
For a number of years I contracted as personal security for personalities, musicians, etc. I worked a couple Reggae Sunsplash Tours with Jamaican bands. We would always finish with a huge concert in Kingston so I’ve spent some time there. Beautiful place. Thanks for an economic background of the country itself.
Thanks for adding to my knowledge of Jamaica (which dates back to a research paper when I was a grad student in 1984).
Some notes.
The ambassador doth protest too much. Irving is being sensationalist. Jamaica's murder rate in 1976 was 15 per 100000. The same as Botswana currently. With murders occurring far away, in about 6 political garrisons consisting of poor urban ghettos. And ambassadors are not stepping over bodies in Botswana, now, are they?
Manley's induatrial policies were mainly a continuation of the prior JLP administration. What got him in trouble was notbeven commodity issues but a massive Keynesian spending program that 1. Depleted foreign exchange reserves to a very negative number 2. Money printing that took up 13% of GDP (63% of government consumption) 3. Overreliance on domestic and foreign credit. This is what really sunk him, not the oil price spike. External borrowing from foreign commercial banks. The interest rate on most loans jumped from 3% to 18% by the mid-70s.
A (very famous) bauxite levy on the mining companies was Manley's attempt to get bauxite revenues to fund the above. We were basically giving it away (a token tax) prior to the bauxite levy. After a failed attempt to make a bauxite OPEC, and to obtain an aluminium smelter (the actual value add), he had to give up as the companies shifted to Guinea and Australia (lower taxes).
SEZ stagnation can be explained by one abbreviation - NAFTA.
Manley's affinity for our local Jewish/Lebanese capitalist family grouoings made him the exact opposite of a socialist. I would suggest you read "The decline and fall of Michael Manley: Jamaica 1972-1980".
This article has made me rather wary of this substack. I will have to make sure to double-check your articles from now on.
Hey Bobby Babylon,
Thank you for your thoughtful feedback! I appreciate your skepticism and willingness to engage with my article. I just wanted to note that in my article I even said "hyper quick overview of Jamaica" and "I didn't dive deep into Jamaica's economic history here," because I was focusing on its relationship with commodity traders. I'm happy to address your points and provide further clarification:
1) Jamaica's 1976 murder rate:
I would love to get the link to the 1976 Jamaica murder rate because I cannot find it.
However, even if I take your number at face value. Jamaica's 1976 15 per 100K homicide rate is higher than Botswana which is at 11 per 100K. These aren't equal. Also, 15 is higher than Ecuador or Haiti's right now which is 13 per 100k.
https://data.worldbank.org/indicator/VC.IHR.PSRC.P5?end=2022&locations=JM-BW-VE&most_recent_value_desc=false&start=1975&view=chart
2) Borrowing & Spending
Both statements are true at the same time. I focused on the current account deficits, rising oil imports, constant borrowing, and falling commodity prices while you mentioned the Keynesian spending, foreign reserve depletion, overreliance on credit and money printing. None of what you say negates what I was saying, in fact these are interconnected. Current account deficits, lower commodity prices, and higher oil imports all lead to foreign reserve depletion. Also if you run continuous current account deficits, you are also borrowing to finance spending hence foreign borrowing from banks as you mentioned.
3) The bauxite levy
My point: I discussed the significance of the bauxite levy as a key policy by Manley to capture more revenue from Jamaica’s resources.
Your point: You point out that the bauxite levy backfired when companies shifted operations to other countries like Guinea and Australia to avoid higher taxes.
The whole point of me bringing up the bauxite tax was that he was trying to increase Jamaica's share of the profits from its resources, which goes back to my point on resource nationalism. While you are saying the bauxite had unintended consequences. This is true but doesn't really negate what I said, just adds more context.
4) SEZs & Nafta
In this point, I said "I didn't dive deep into Jamaica's economic history here," I just made an observation about the SEZs not working. I didn't go into depth why. But yes, NAFTA absolutely diverted investment and trade opportunities away from Jamaica.
5) My point was that Manley is a socialist leaning person, while you say his close ties to local capitalist families makes him less of a socialist. Both are true at the same time. Manley's policies particularly in the early years where indeed socialist leaning. There are many forms of socialism or interpretations "public control of the means of production". Some people argue that true socialism is when the state is abolished and workers own everything like Orwell's Homage to Catalonia. Some people argue that public control means workers own firms and the state supports worker ownership like the former Yugoslavia. Some argue that public control means the state, which is supposed to represent the public, owns the firms especially if they are at the "commanding heights" like banking, natural resources, and etc.
Manley took state control of industry, banking, sugar, insurance, telecom, & electricity, which is a form of socialism. However, he also had ties with business and allowed private sector involvement in tourism, manufacturing, and agriculture from the Jewish/Lebanese firms you mentioned. He is still a socialist, but he was also a pragmatist.
Thank you again for the feedback and I hope this clears things up. I will read the recommended book, and I hope you understand my perspective that I felt your points added context, instead of negating them. I even mentioned that I was speed running through the history to make my points about reaching out to commodity traders.
I link everything so you can read the books and hyperlinks I linked if you want!
Heavy industry (monoplies like Carib Cement for example), tourism, and construction for ecample , the monopoly WIHCON) remained under capitalist control. Manley took state control by paying full dollar value of the the other assets. They were sold to him (telecom especially) because they were underperforming. That is not exactly seizing the means of production a la Marx.
The bigger issue as I hinted at however, is not the commodity, but the value-add. Unless they move up the value chain, commodity producers are going to stay poor. Singapore isn't Texas, but that didn't stop it from becoming the Houston of Asia.
https://www.degruyter.com/document/doi/10.1355/9789814377966/html
And while I will be first to decry Singapore comparisons, this applies as much to SSA and Caribbean nations as it does SEA ones. Manley may have taken the 51% stake in bauxite lands - but alumina processing remained in foreign hands. So we were not making much of any money (the '74 education budget alone absorbed the levy) but just getting by. Nations and companies only get head when they are grinding their own diamonds, refining their oil and making their own chocolate. Leaders like Manley and Seaga did not understand (or care about) this. I suspect this to be the case in much of SSA as well.
It is also odd that you left out the role of international bankers in our dealings, especially BCCI. They are the ones who put sellers with buyers, as well as provide leveraged funds. SSA and Caribbean countries have to develop strategies to control their own commodity markets - buying and selling. And do so quietly. There is also the issue of leaders relying on personal relationships instead of local technocrats trading commodities. Seaga called a friend from undergrad when we had oil problems. Manley called up his friends from Scandinavia during the '73 oil crisis.
https://irp.fas.org/congress/1992_rpt/bcci/05foreign.htm#N_65_ (ctrl+f Jamaica)
https://time.com/archive/6717388/masters-of-deceit/
The murder numbers are here, at the police force site.
https://jcf.gov.jm/stats-2/
The pooulation between 1972 and 1980 was 2 million. Note that murders doubled between 1972-1976. But even at that rate, (9 to 19 per 100k) no ambassador is stepping over any bodies.
#1: Even though heavy industry, tourism, and construction remained under capitalist control, Manley's decision to nationalize other assets at full dollar value doesn't negate his socialist or socialist-leaning tendencies.
Socialism encompasses a range of economic systems where the state or community owns and controls businesses. For instance, pre-Spanish Civil War Catalonia featured worker-owned co-ops without state involvement, while Yugoslavia's state supported worker co-ops. The Soviet Union is the more classic example, where the state owned virtually everything. If we talk about African socialism, like Kwame Nkrumah, commanding heights of industry was owned by the state while there was still small businesses and a smaller restricted room for the private sector. Nationalizing banks, telecoms, and other industries—even at full purchase value—is still a form of socialism because it places key economic sectors under state control. Whether Manley expropriated or nationalized these businesses is irrelevant; as long as they are under public (state) control rather than private ownership, it's socialism. Socialism isn't just about seizing assets; there are many forms, as Marx wasn't the only socialist thinker.
Sankara of Burkina Faso both nationalized and seized assets, yet major firms, hotels, and restaurants remained owned by French businessmen like Jacques Aubaret. Allowing some private enterprise doesn't mean one isn't socialist or socialist-leaning.
#2
I looked in your stats. In 1976, it says 367 people were murdered.
The population of Jamaica at the time was 2.029 million:
https://www.google.com/search?client=opera&q=jamaica+population&sourceid=opera&ie=UTF-8&oe=UTF-8
367/ 2.029,000 = 1.81 * 10^-4
If I put this number in per 100K death rate like the world Bank
that's 18 people dead per 100K people, which again is higher than Botswana, Haiti, or Ecuador today. That proves my point about the violence in Jamaica back then...
#3: You mentioned it's 'odd' that I left out international bankers, but this article focuses on commodity traders, and I aim to keep my posts under 15 minutes to read.
#4 - the are many strategies to export refined goods.
There are various strategies to export refined goods. For example, Ivory Coast's refinery in Abidjan, initially French-built, now enables the country to export more refined petroleum than crude—surpassing even Nigeria. Both Ivory Coast’s first President, Houphouet-Boigny, and its current President, Ouattara, are known Francophiles.
https://oec.world/en/profile/country/civ
Nigeria used to have four government-owned refineries, but due to mismanagement, they are all down. Now the state supported Dangote, Nigeria's industrialist, to build a massive refinery in Nigeria.
Mauritius did the SEZ strategy to get textile manufacturing. There's no one-size-fits-all approach to fostering manufacturing.
I do wonder if commodity traders ever loose money on those deals and if they don't why they're still the only ones making those deals.
Are they better informed on the real risks ?
Is it because they're in a better position to enforce the terms in the long run ?
Yea I there are plenty examples of commodity traders losing money or going bankrupt. That will be a substack for another time. I'll go more into the commodity derivatives market to show how some firms have lost money.
But yes commodity traders like Glencore or Trafigura have the best real time knowledge base and logistics network in the world.
A government really shouldn't go to Glencore or these firms, but they do so either of desperation or corruption or all of the above.
Hey Seu Bongo, I answered your question about profits and which traders lose money/gone bankrupt here:
https://yawboadu.substack.com/p/book-review-2-insights-on-javiar?utm_source=activity_item
Btw, I also edited my Namibia article based on your input on what you said about their true exports! I appreciate the help
The IMF is the international equivalent of those payday loan places you see when you drive through the hood.
I'm pretty sure they didn't force austerity measures until the 80s. We can only wonder how things would have been had they not done that.
You are Mostly Right. But I'll fill in some details. IMF loans used to be non conditional, but the conditions actually started in 1952. But, it was during the 1980s that the IMF implemented Structural Adjustment Programs (SAPs), which imposed much stricter austerity conditions.
Regarding IMF loans, interest rates vary depending on the type of loan. IMF loans are generally more favorable than those from private lenders, Eurobonds, or commodity traders. However, in the 1980s, global interest rates were exceptionally high, with some IMF loans reaching interest rates as steep as 12%, which goes to show how absurdly high interest rates were back then. Even though 12% was "generous" at the 1980s, with falling commodity prices, you had countries spend more on interest payments than education, infrastructure, or healthcare.
Some examples of IMF Loans:
Non-concessional loans, such as the Stand-By Arrangement (SBA), Rapid Financing Instrument (RFI), and Extended Fund Facility (EFF), typically carry a margin above the SDR rate. In the 1980s, SDR rates ranged between 8% and 12% based on the IMF’s calculation formula—a rate that is significantly higher than today’s 3% to 4% range in 2023-2024.
https://www.imf.org/en/About/Factsheets/Sheets/2023/Stand-By-Arrangement-SBA
https://www.imf.org/en/About/Factsheets/Sheets/2023/Extended-Fund-Facility-EFF
https://www.imf.org/en/About/Factsheets/Sheets/2023/Rapid-Financing-Instrument-RFI
The SDR rate is calculated as a weighted average of short-term (3-month) government bond yields from a basket of major currencies. Today that includes the U.S. dollar (USD), euro (EUR), Chinese yuan (CNY), Japanese yen (JPY), and British pound (GBP). For instance, current rates are approximately 5% for the U.S., 3.85% for the Eurozone, 5.3% for the UK, 0.03% for Japan, and 2.5% for China. Then you weight them up with their formula.
However, for low-income countries, the IMF offers concessional loans under facilities like the Extended Credit Facility (ECF), Standby Credit Facility (SCF), and Rapid Credit Facility (RCF), which currently have a 0% interest rate.
https://www.imf.org/en/About/Factsheets/Sheets/2023/Extended-Credit-Facility-ECF
https://www.imf.org/en/About/Factsheets/Sheets/2023/Stand-by-Credit-Facility-SCF#:~:text=Interest%20rate,during%20each%20six-month%20period.
https://www.imf.org/en/About/Factsheets/Sheets/2023/Rapid-Credit-Facility-RCF
Do you think the incentive to intervene in exchange rate will go away or at least become lower if there is a long term decline in global energy prices?
I suppose if you have unstable export revenues due to commodities and you're importing food and fuel you'll still see exchange rate interventions.
My assumption is in 2026-2028 the structural decline in fossil fuels prices will begin. By the 2040s the number of energy independent countries will double.
Better than the IMF would be a externally managed insurance fund or sovereign wealth fund for commodity exporters that don't have the capacity to build their own. But as long as the IMF is around to rescue African leaders they'll never go through it.
as long as a currency is terrible and the politician has to pander to the poor to avoid riots, then countries will intervene in their exchange rate.
I think we are already seeing long term decline in global energy prices, peak was 2008, and its been going down since then.
It is easy to be energy independent when most of your population dies off. Fertilizer, plastics, medicine and cement don't come from solar panels
this is a double posting of your comment, I replied to the first posting of this.