With Minister of Finance Dr .Nigel Clarke off to pastures new as deputy managing director of the IMF, the Andrew Holness Administration has to find an adequate replacement and do so quickly.

Since Dr Clarke announced he would be demitting his position, speculation abounds as to who will replace him.

It is generally acknowledged that he did a good job, acquitting himself well in the role, gaining the confidence and trust from the international community and rating agencies. Many approved of his fiscal stewardship and the way he comported himself as manager of the country’s coffers.

A capable candidate

Whoever succeeds him must have demonstrated the ability to be a good fiscal manager while being a good communicator. Explaining fiscal policy and why certain decisions have been taken cannot be opaque and leave one confused as fiscal verbiage is spat forth.

It is said that the current Minister of Education Fayval Williams could seamlessly move into Dr Clarke’s old chair. But who else can the JLP turn to among its elected Members of Parliament and handle what is in effect the second biggest office in Government?

It cannot be a neophyte or someone who “shows promise”.  It has to be someone who inspires confidence.

With a general election expected within the next year, the next minister of finance may very well be in a holding position, as the JLP is looking to secure a third-consecutive term in office.

It may be prudent for Prime Minister Holness to take on the position and delegate some of his responsibilities at the Office of the Prime Minister to someone who he has had his eye on for promotion.

By assuming the role of minister of finance, it will give Holness time to select whom he deems fit to be a steward of the economy during his third term. He may decide to draft someone in from the private sector where there are able candidates.

Why Andrew?

Andrew Holness is an effective communicator and going into election mode, who better to articulate the JLP’s fiscal vision?

The prime minister must guard against critics who will say he is power-hungry and that it is a concentration of power. The multilaterals agencies, rating agemcies and the capital markets will all breathe a sigh of relief if he were to take on the role. It will foster confidence with international partners. He is a known entity. 

Holness will be implementing what has already being laid out by Dr Nigel Clarke and can call on a number of technocrats to help him. Mind you, the double responsibility will draw on his energies, but he is up to it. He is still young and sprightly and has a capacity for hard work. He will not flail and be overwhelmed by the task at hand. He may hold this dual role for less than a year.

It also sends a signal to the party to get behind him as they prepare for what will be a fierce political battle with no quarter given. This will be no 2020 wipe-out!

Andrew Holness has to find the right minister of finance who can serve him for five years, not less than 12 months. He should be looking at the long game. Better to go in, hold the position and wait for the cavalry to arrive after a win at the polls. There’s just too much at stake.

A case study for financial management failure 

On September 5, 2022, UK Prime Minister Liz Truss chose her friend Kwasi Kwarteng as Chancellor of the Exchequer.  A lot was made of the fact that he was Britain’s first black Chancellor who was a super smart Cambridge graduate. He lasted just 33 days in the job.

He planned to abolish the 45 per cent higher rate of income tax paid by people earning over 150,000 pounds a year. His fiscal management saw the pound fall to its lowest-ever level against the US dollar and caused havoc in the government bond market, leading to the Bank of England having to step in with a buy-back operation. 

The IMF said Kwarteng got it all wrong and was steering the UK into disaster. He had to go!

Andrew Holmes’s must avoid all that. This is no time to place his political fate and that of his party in the hands of an untested ingenue. Any wrong move could be calamitous and return him to being the Leader of the Opposition.

Headwinds and shochwaves?

There are storm clouds ahead.  

The Bank of Jamaica is projecting the economy will contract by 1.5 per cent for the remainder of the fiscal year with the PIOJ acknowledging the economy is in decline. There is pressure on the inflation target. The Prime Minister has said his government is not satisfied with the anaemic economic growth pointing to low growth being easily wiped out by events like Hurricane Beryl.

Dr Clarke did a very good job of reducing Jamaica’s debt burden seeing it come down from 144 per cent of GDP to 72 per cent of GDP in a decade. The plan is to get it down further to below 60 per cent by 2028. He  assumed office in 2018 and has been a steady, reassuring hand on the wheel. The IMF has lauded his stewardship and cites Jamaica as a fine example for developing economies.

A growth path needed

Prime Minister Andrew Holness will have to present a growing economy to Jamaicans. He cannot solely focus on reducing Jamaica’s debt obligations. Many are lamenting “nutt’n nah gwaan” and that is not the chant he wants to hear come election time. If inflation begins to climb, measures will have to be taken that may be unpopular. It’s a delicate situation requiring astuteness and political savvy.

Aubyn Hill can help here with spurring growth and he will have to be a factor, working very closely with the prime minister.

The prime minister could roll the dice and call the election sooner rather than later before economic conditions worsen, gambling on his popularity and the PNP’s unreadiness to fight a general election.

He has a lot to ponder. Fortune favours the brave.