How Jamaica and its prime minister are becoming a mini-superpower in the Caribbean
New commercial and high-end condominiums are rising from the dirt, the minimum wage is going up, unemployment is the lowest it’s been in years and tourism — the engine of the economy — is once more booming. After years of being hobbled by crippling debt, double-digit deficits and negative growth, Jamaica, the largest island in the English-speaking Caribbean, is showing its ability to weather crises — and its hard-won economic stability is getting noticed along with the leadership of its prime minister. In just the past four months, Prime Minister Andrew Holness has met with Canadian Prime Minister Justin Trudeau and welcomed United Nations Secretary-General António Guterres and the newly appointed president of the World Bank Group, Ajay Banga, to the island. Banja’s visit, just 12 days into the job, was part of his months-long global tour and the first by a World Bank president in an official capacity in recent times.
And all of it is happening as the country continues to emerge from the COVID-19 pandemic, whose adverse effects had the economy shrinking by nearly 10% — its largest decline in history. “We have implemented policies that are on the one hand empowering but on the other hand competitive and efficient,” Holness said in a recent interview with the Miami Herald at his office in Kingston. “We have sought to manage our debt, to bring it down.” Known for its white sandy beaches, reggae music and world class sprinters, Jamaica had the dubious distinction just a few years ago of being one of the world’s most indebted countries. Its public debt was a record 147% of Gross Domestic Product just a decade ago. Today, with its economy in recovery, its debt at the end of March was 78% of GDP — a feat, Holness says, that “tells the story of our fiscal management.”
“Jamaica is a unique case in the Caribbean because we have owned our problems and shortcomings,” he said. “We start from the position that we cannot borrow our way to development. We start from the position that whatever resources we have, we must manage them efficiently. And for the benefit of the people.”
Jamaica’s ongoing economic transformation — its GDP is projected to grow by 4.3% this year — is not only raising the country’s profile outside of the region but that of Holness. He is quickly emerging, along with Barbados’ Mia Mottley, as a go-to leader on the world stage. Holness, 50, is the youngest person to become prime minister in Jamaica’s history after he was first appointed to the job in October 2011, and then winning his own mandate in March of 2016. He is a longtime advocate of debt-relief and reform of the global financial system that has shut vulnerable middle-income developing countries like his — considered too rich for grants and too indebted for high-interest loans — out of low-cost financing.
Now with such countries increasingly vulnerable to external economic and environmental shocks like the COVID-19 pandemic and climate change, their lack of access to financing is getting noticed and calls for reform are getting support. Leaders like Trudeau, Guterres and U.S. Vice President Kamala Harris — who earlier this month met with Caribbean leaders in The Bahamas and announced that the U.S. will lead a diplomatic campaign on multilateral development bank reform to increase access to financing — are all joining the call, and in the process citing Jamaica’s experience and Holness’ leadership. Along with Trudeau, Holness co-chairs the international Financing for Development initiative. “Mr. Holness has been a champion,” Guterres said during his May visit to the island. “A champion in relation to climate action, and a champion in relation to an effective reformed multilateral financial architecture in the world.”
The visit came days before the G7 summit of industrialized nations in Japan where Guterres called on the world’s wealthiest economies to support him in reforming the international financial system to better support small developing states. It was important for him, he said, to come meet with Holness ahead of the meeting because he and his government had pursued policies “that allowed the country to reduce substantially its dependency in relation to debt.”
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