Minister of Finance Dr Nigel Clarke has come under intense fire for his management of the national coffers during the worrisome times of the COVID-19 pandemic.

Media pundits, high-ranking opposition party members, so-called economists have lambasted Dr Nigel Clarke for not opening up the flood gates and providing financial stimulus that can resuscitate the economy and spur growth.

They say he is too conservative and is only intent on pleasing both the multi-lateral and rating agencies at the expense of Jamaicans going through tough times and desperately needing financial assistance.

Outlining the crisis facing the nation as he opened the 2021-22 Budget Debate in March this year, Clarke, speaking on the financial impact of the COVID outbreak, said: “No economic decline comes even close. The closest comparisons were the decline of 6.5 per cent in 1975, 5.7 per cent in 1980, 4.6 per cent in1985, 3.9 per cent in 1974 and 3.2 per cent in 2009.”

MASSIVE FALL OFF IN TOURISM RECEIPTS

Last year, the Jamaican economy contracted by 13 per cent. Clarke explained that the decline in 2020-21 was driven by a massive fall off in tourism receipts with foreign exchange inflows dropping by US$2.5 billion (74 per cent).

The finance minister has drawn attention to the large foreign exchange component of the country’s debt. Jamaica’s total debt stands around US$14.5 billion of which about US$9 billion is external foreign currency debt.

This will have to be both honoured and managed despite the onslaught of COVID upon the economy. A further debt burden places Jamaica in a more parlous position. Clarke has said he is committed to reducing the foreign currency exposure in a stable macro-economic framework.

“We have to pursue policies that don’t just focus on today but also consider what will take place tomorrow. These policies must enhance the credibility of Jamaica as an island state in a wide open sea.”

For the fiscal year 2020-21, revenue collection declined by $70 billion yet the Government increased its spending by net $24 billion and had to go way beyond that via capital expenditure by way of supplementary budgets.

Clarke had to find $40 billion just for COVID expenses.

CLARKE DEFENDS HIS STANCE

Clarke has been berated for not reducing the primary surplus, bringing it down from a projected 6.1 per cent to 5.1 per cent and so freeing up expenditure. He has had the brickbats of “more stimulus, more spending needed, create aggregate demand,” hurled at him.

The finance minister has defended his stance, explaining that Jamaica faces both an economic and health crisis and prudent fiscal management is needed at this time. He point to the country’s good fortune, having $90 billion in extra resources available and a further $33 billion programmed for the next this fiscal year.

Only last month, participating in a CVM Television panel discussion, he made it clear that Jamaica needed fiscal buffers not just to absorb the shock of COVID but also the perennial hurricanes, storms, flooding and natural disasters that befall the country.

Earlier this week it was disclosed by Prime Minister Andrew Holness that while Jamaica was spared from the full onslaught of Tropical Storm Elsa, the country nevertheless now faces an $803-million infrastructure repair bill with close to 200 roads impacted.

It is clear that Jamaica will have to upgrade its road network and public infrastructure to prevent this recurring damage to the country by natural disasters.

The Government will therefore have to find the funds and deploy astute husbandry of resources.