Clarke interviewed on Bloomberg

Observer writer

Wednesday, April 17, 2019

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Jamaica's finance minister, Dr Nigel Clarke, was featured yesterday on the Bloomberg Television production, Bloomberg Markets: The Close. Clarke was interviewed by the show's co-hosts Caroline Hyde and Scarlet Fu on matters related to Jamaica's monetary policy, economic growth, and the central bank's use of reggae to communicate with the public.

The interviewers listed Jamaica's latest economic achievements — including the upgrading of the country's debt ratings by Fitch, reduction in the debt load, revitalisation of mining, the world's best-performing stock market, and the squaring of finances.

Clarke emphasised the importance of reforms in realising the progress that has taken place so far.

“Jamaica has had a tremendous performance over the last several years with a restoration of macroeconomic stability,” the minister stated. “We have had 16 consecutive quarters of economic growth, and we have been engaging in a series of structural reforms, fiscal, monetary, and a number of other reforms to restore the economy's health — and the results have been getting attention around the world.”

Caroline Hyde noted that Fitch projects Jamaica's growth at two per cent for the next couple of years, but Prime Minister Andrew Holness is targeting four per cent.

“How is that to be achieved?” she asked. “Why is it not yet achieved?”

Clarke responded by giving some background information on Jamaica's economic growth from the past to the present time.

“So Jamaica is emerging from a period of high debt and low growth over a long period of time,” he revealed. “Our growth over 40 years was about 0.9 per cent. Over the last 10 years it was about 0.2 per cent. Over the last five years it was about 0.5 per cent. We are now seeing growth at the level of two per cent and we've had 16 consecutive quarters of economic growth — the longest such stretch of quarterly growth since we started measuring growth quarterly in 1997.”

The minister then went on to elaborate on the measures being taken to improve this economic performance in the coming years.

“We, as you have quoted the prime minister, we want to elevate levels of growth, and so we are invested in infrastructure to allow us to improve the productivity of business,” he explained. “We are investing in training to improve the productivity of labour and we are reforming our tax system — bringing forth greater economic efficiency by getting rid of distortionary taxes, taxes that distort the allocation of capital in the economy.”

Co-host Scarlet Fu made special mention of the successful reggae videos created by the Bank of Jamaica addressing inflation and monetary policy. Clarke responded by explaining Jamaica's monetary regime, which had focused on the exchange rate as a tool of monetary policy, was gradually moving away from a managed float and being replaced by a market-determined exchange rate with an inflation target being the anchor of monetary policy. He revealed, however, that last year he had offered a “light-hearted critique” to the central bank because he felt these changes were not being communicated to the public.

The Bank of Jamaica responded to the minister's critique by producing the innovative videos which went viral and got the message across to the Jamaican public in a musically creative way, while receiving widespread attention from media and monetary policy-makers around the world.

The Bloomberg interview of the finance minister was posted on the social media accounts of Prime Minister Andrew Holness and by 1pm yesterday the post had received more than 1300 likes and 300 comments on his Facebook page.

One comment read, “Good stuff! Proud to be a part of the generation witnessing and participating in national transformation”, while another noted the role of both political parties in charting Jamaica's current economic path stating, “Am so proud and happy that both our governing parties can work together on Jamaican economy to produce this awesome result of improvement.”

This is the second time, this year, that Minister Nigel Clarke and his comments on the Jamaican economy have received attention from foreign financial media. The first was in February when he wrote an opinion piece for the Financial Times entitled ' Lessons from Jamaica for small countries with big debts'.

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