KINGSTON, Jamaica _ When the afternoon bell rings at August Town Primary School, children kick around a plastic bottle filled with gravel instead of a soccer ball. When administrators need to buy a copier, they turn to parents, businesses or foreign embassies for donations.

Making do has become a way of life at the school as it has all across Jamaica, where paying off the nation’s punishing debt takes priority.

The country owes creditors $18.2 billion, which is more than its entire domestic economy produces in a year: 132 percent of gross domestic product, according to the International Monetary Fund. That’s a heavier load than crisis-hit Italy, Spain or Ireland face, and nearly as high as Greece’s.

For years, over half the government’s budget has been dedicated to paying the debt, and that has forced the government to scrimp on schools, hospitals and infrastructure.

“The budget’s tight, there’s no question. But it’s been tight for a long while and we’ve had to learn to make things work as best as we can,” said August Town Vice Principal Dwight Peart at the low-slung concrete school in an impoverished valley community in the capital.

Roughly a third of the Caribbean island’s 2.8 million people live in squatter settlements, and there’s little money for housing aid. Public hospitals are hampered by a shortage of medical equipment. Roads are filled with potholes. The thousands of Jamaican dropouts from overcrowded schools become easy prey for drug and extortion gangs.

With the exception of the pearl-toned beaches of Jamaica’s resorts, no corner of the island has been spared by the debt monster.

Jamaica’s experience with austerity holds lessons for other nations struggling to cope with debt, says Mark Weisbrot of the Washington-based Center for Economic and Policy Research.

“Attempts to squeeze the economy in order to maintain unsustainably high debt service can lead to prolonged periods of stagnation and high unemployment.” He said Jamaica’s recent domestic debt restructuring erred by merely reducing some interest payments without writing down the principal.

It’s not the first, or even the worst time Jamaica has faced an avalanche of debt. The debt-to-GDP ratio soared to 262 percent at the start of the 1990s, according to a Jamaica-based think tank, the Caribbean Policy Research Institute.

Most of that, though, was owed to foreign governments and international institutions such as the World Bank and International Monetary Fund at relatively low interest rates. Some of the debt owed to governments was written off. A spurt of growth in the late 1980s helped make the debt less of a burden, while a spike in inflation, which reached 80 percent in 1991, sharply devalued the domestic part of the debt.

Since then, the debt has been more challenging, partly because of Jamaica’s high domestic interest rates, said Damien King, executive director of the think tank. The government was paying as much as 28 percent a year on its domestic currency bonds until a few years ago, with the inflation rate hovering near 20 percent.

“Research shows that the entire increase was due to debt contracted by entities outside of central government, debt that the government subsequently had to assume responsibility for. The largest portion of it derived from bad private bank loans that the government absorbed as part of the resolution of the banking crisis of the late 1990s,” King said.

If the old crisis was caused by too much government intervention, the current one may have been caused by too little.

Before the 1990s banking crisis, Jamaica ended exchange controls while lifting restrictions on lending and interest. Local banks went on a spree of lending while interest rates shot to near 50 percent. Then, in 1996, the system crashed. Dozens of banks failed and the government stepped in to absorb the bad loans and keep the rest of the system from collapsing, taking pension funds along with it.

By 2010, Jamaica’s towering debt and the damaging impact of the global recession forced the government to seek assistance from the IMF. It helped the government carry out the debt restructuring and provided $1.27 billion in standby credits. It also unlocked funding from other global lending organizations, including $600 million from the Inter-American Development Bank and $450 million from the World Bank.

Yet roughly 60 percent of government spending goes to debt and an additional 30 percent goes to pay wages. That leaves just 10 percent for education, health, security and other functions.

The 2010 domestic debt-swap program lowered the government’s debt-service costs by $450 million a year. But it left the amount of capital owed untouched. The interest expense breakdown is about 70 percent for domestic debt and 30 percent for external debt.

“Servicing the debt has undoubtedly absorbed fiscal resources that otherwise would likely have been deployed on infrastructure improvements as well as on needed social services,” said King, who is also head of the economics department at Jamaica’s University of the West Indies.

A sluggish global and local economy has frustrated Jamaica’s effort to grow its way out of the crisis. During the global recession, three of the country’s four alumina refineries were closed and revenues from tourism and Jamaicans working abroad slowed.

In recent months, the economy appears to be on a meager upswing. Recently, the country recorded first-quarter growth of 1.4 percent over the same period a year earlier. The inflation rate for the first five months of the year was 1.7 percent.

Prime Minister Bruce Golding, whose Jamaica Labor Party came to power in 2007, argues that his government is finally putting the country on a solid economic pathway. This year it has divested money-losing entities such as Air Jamaica and its three remaining sugar factories, and Golding says a crackdown on gangs should improve the business climate.

With money short, Education Minister Andrew Holness said he is looking for foreign help in building schools.

“If China wants to build them _ (or) U.S., Canada, Saudi Arabia, Jamaicans _ it doesn’t matter to me,” he said.

Stephanie Black, the New York-based director of “Life and Debt,” an award-winning 2001 documentary that dissected the impact of globalization on Jamaica’s economy and skewered lending policies of international organizations like the IMF, said she does not feel the island’s economic situation has improved since her film was completed a decade ago.

“When one looks at the class divide within the country there is little mobility, (and) the high cost of daily living, low minimum wages, prevailing unemployment, lack of improvements in basic infrastructure, and widespread corruption makes it terribly challenging for too many who are still living hand to mouth,” Black said.

Alvord Unified school board members have voted to delay the opening of Hillcrest High, which was built using a voter-approved bond sale to relieve overcrowding at other district schools.

The Los Angeles Times says the delay will save the district $3 million each year in staffing, utility and other expenses, although it will have to pay about $1 million to secure and maintain the empty campus.

Incoming freshman who had anticipated using the school’s robotics lab, state-of-the art performance space and other amenities will have to attend a different campus with 3,400 students _ more than twice the number it was designed for.

“We have a $20 million budget gap, so difficult, almost draconian, measures have to be put on the table,” explained H.D. Palmer, spokesperson for Governor Schwarzenegger’s Department of Finance.

Ironically, those cuts would come at a time when Californians need the programs most. A new report released this week from the non-profit, California Budget Project, Proposed Budget Cuts Come at a Time of Growing Need, argues that California’s economy hasn’t been weaker since the Great Depression. The 12-page report notes that Californians are ill-equipped to weather the cuts the governor is proposing.

The Golden State has lost more than a million jobs since the recession began, and it continues to lose tens of thousands of jobs every month. Six job seekers are searching for each available job. Enrollment in the state’s Food Stamp Program has increased 43%. The number of Californians receiving CalWorks welfare checks has grown by 86,000; the number enrolled in Medi-Cal has jumped by more than 470,000.

Nearly 900,000 children depend on Healthy Families, the children’s health program Schwarzenegger has proposed to eliminate. More than a half-million families depend on CalWORKS, the welfare program the governor has said needs to be scrapped.

Another program the governor wants to terminate, In Home Support Services for the elderly, disabled and blind, currently serves over 400,000 Californians, according to the state Department of Social Services.

Cutting these services could have dire consequences. For example, “If the Governor eliminates the entire IHSS, it’s going to lead to (poor, elderly people) dying alone in their apartments and SROs [single room occupancy], because in many cases the home care person is the only person who sees them,” said James Chionsini, a community organizer with the San Francisco organization, Planning for Elders in the Central City.

“It’s not even financially sound,” Chionsini said, “because the cost of home care for an entire year is cheaper than one or two trips to the emergency room,” where the old, blind and disabled will be more likely to land if IHSS is cut.

“The Governor has said he doesn’t want this to happen, which is why he’s engaged our congressional delegation and the White House” in an effort to get additional federal aid, spokesperson Palmer said.

Advocates note, however, that Schwarzenegger’s proposed cuts actually jeopardize federal matching funds that are meant to help states continue, and even expand, programs like Medi-Cal, Healthy Families and CalWORKs.

For instance, $2 billion in proposed cuts to social services could cause the Golden State to lose $5 billion from the federal budget, California Budget Project director Jean Ross said in a conference call Tuesday.

“The impact on California families and our state’s economy would be more than triple the savings in the Governor’s proposed reductions,” Ross said.

That Schwarzenegger will stick to his proposal is especially concerning in light of the federal budget announced this week by President Obama.

“There’s some good news for California in the President’s budget,” Ross said. “The President is continuing increased government’s share of the Medi-Cal program here in California. Each dollar the state spends will be more than met by the federal government.”

Palmer said he’s aware of the trade-off. “Given the fact that we have close to a $20 billion budget deficit, it’s pretty natural that we would lose some federal matching funds,” he said.

Palmer said Schwarzenegger will wait until May when the governor usually proposes his revised budget to the state legislature based on mid-year taxes collected and anticipated. At that point, if federal funds materialize, he will rescind his proposed action. Otherwise, Palmer said, “we’ll pull the trigger.”