The smaller economies within the Caribbean region appear to be better managed than the larger economies in the region. IC Insider.com looked at the exchange movements of Jamaica, Costa Rica, Guyana and Dominica Republic between 1972 to date, to see how they performed against each other.
No studies appear to be have been done on this feature of the region and the major reasons why large states seems to be managed so poorly compared to the much smaller ones. The major movement in exchange rates of the countries’ currencies against the United States dollar speaks eloquently of the differences in management quality or could it be that the larger countries are much more difficult to manage? The smaller islands of Barbados, the Eastern Caribbean and the Cayman Islands have maintained the value of their currencies to that of the US from 1972 until now.
At the beginning of 1972 it took 6.635 colon to purchase one United States dollar, by 1989, the amount increased to 79.7335 colon for an increase of 12 times the 1972 value. By the end of 1999 it required 50 times the amount in 1972 or 331.796 colons to buy the US dollar. By 2009 it took 554.5 colon to buy the US dollar or 83.6 times the amount in 1972. As of September this year it requires 80.2 times the amount in 1972 to purchase the US dollar which trades at 532.45 colon to US$1.
In the case of Guyana it took GY$2.087 in 1972 to buy the Us dollar but by 1989 it required 13.4 times the amount as in 1972 as the rate slipped to GY$27.95. By 1999 it was taking GY$178.63 or 85.6 times the 1972 figure, for the next ten years the change slowed markedly to GY$202.876 or 97 times the 1972 and in September 2015 the rate inched up to GY$205.79.
In the case of Dominican Republic it took 1 peso in 1972 to buy the Us dollar but by 1989 it required 6.53 times the amount as in 1972 as the rate slipped to 6.53 pesos. By 1999 it was taking 16.09 or 16 times the 1972 figure. By 1999 the Dominican peso fell further in value, requiring 35.35 pesos or 35 times the 1972 figure to buy the buck. In September 2015 the rate climbed to 44.26 pesos to the US dollar or 44 times the amount in 1972.
Jamaica has turned out to be by far, the worst performing currency in the Caribbean region since 1972 and probably the worst managed economy. Between 1972 and September this year, it takes 154.55 more Jamaican dollar to buy one United States dollar as the country’s economy has performed poorly. Having been trading at 77 Jamaican cents to the US dollar for a number of years, by the January 10, 1973, the Jamaican dollar was devalued by 15 percent to 91 cents to one US dollar. On the January 13, 1978, the official rate had moved to $1.05, by May 10, the rate ended at $1.55 and ended at $1.69 on the last day of the year. On May 2, 1979 the rate moved to $1.78 where it stayed until November 1983, at which stage the rate moved to $3.15. By 1985 the rate climbed to $5.50 and to $6.50 by the end of 1989, taking 365 percent more Jamaican dollars to buy the US dollar, since 1983 and requiring 8.44 times the amount in 1972.
Ten years later in 1999, the rate reached $41.42, requiring 637 percent more local currency to but one US dollar than ten years before, and 53.8 times the amount in 1972. By the end of 2009, the rate moved to $89.60, requiring just over twice the amount of Jamaican dollars for one US dollar. At the end of trading on Friday September 25, 2015 at just over $119 to 1 US dollar for the first time, requiring 33 percent more Jamaican dollars to purchase the US dollar, than at the end of 2009.