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Putting the Clarke appointment into perspective
Dr Nigel Clarke.
Columns, Opinion
August 29, 2024

Putting the Clarke appointment into perspective

No one can blame those who think Dr Nigel Clarke, in his performance at the Ministry of Finance and the Public Service, sang to a concert pitch of perfection to land a top job at the International Monetary Fund(IMF), a multilateral organisation with a chequered history in Jamaica.

Circumstances and history have colluded to put him in the right place at the right time: his academic credentials; his skin colour; his role as minister of finance of a borrowing and monitored country; and last but not least, his ability as an orator to articulate the IMF line.

The IMF has been searching for such a profile to replace the outgoing Liberian deputy managing director. Dr Clarke was ideal in many ways, as he had also helped to usher in a US appointee as managing director of the IMF. It’s a post the US does not normally take, leaving it for Europe or Canada. His rise in the multilateral system has since been notable, but if he felt he had a further mission here in Jamaica, his answer would have been no. Therefore, one can only conclude he does not feel that way.

Dr Clarke is, of course, not the first Jamaican finance minister to join a multilateral organisation, having departed Heroes’ Circle for one reason or another. Jamaica has struggled with IMF prior actions and conditionalities for close to half a century, and different generations of Jamaicans have carried the burden, whether under former prime ministers Michael Manley, Edward Seaga, PJ Patterson, Portia Simpson Miller, Bruce Golding, or Andrew Holness. All agreements ended in failed tests and abandoned programmes.

Many feel the IMF is not the same creature it was in the 1970s, 80s, and 90s. The trophies, though, for our struggles really belong to the Jamaican people, many of whom have never seen a benefit from tightening their belts.

Historical perspectives are necessary for understanding the context of the Clarke appointment of which we are told Jamaicans should be proud. A paradox, if ever there was one.

The 2013 Extended Fund Facility (EFF), replacing the failed 2010 Standby Agreement, perhaps best illustrates Jamaica’s stormy IMF agreements, of which there have been many over 47 years. All, except the 2013 EFF, ended in train wrecks under Manley, Seaga, and Golding/Holness. Former Minister of Finance Dr Peter Phillips can claim to be the only minister who has never failed an IMF test.

Many at the fund did not want Jamaica to get a new agreement in 2012/2013, perhaps as punishment for the failed 2010 Standby Arrangement. But it did come after rounds of tough negotiations. Dr Phillips was almost a casualty, as the IMF dug in to impose conditionalities he knew would not be easy for Jamaicans, just as in many other developing countries. Jamaica’s performance under the 2010 agreement was so poor that it put the country in a weak position to get easier conditions from the IMF and the more powerful countries.

Jamaica was helped by a group of women in the Congressional Black Caucus, headed by Maxine Waters, who held President Barack Obama’s hand to the fire to help Portia Simpson Miller, Jamaica’s first woman prime minister. Conditions such as cutting the capital budget by 66 per cent, the aggressive primary surplus target, another debt exchange, the net international reserves balances, and an almost impossible list of underpinning legislation, in a short time, were seen as very onerous.

Luckily, Dr Phillips understood the assignment and asserted that Jamaica was here by virtue of its own acts, and the remedy would have to be faced once and for all, never to go back. He took on the challenge, having accepted the mission.

It is against that background that Dr Clarke entered and took his seat. His greatest achievement, he says, is never having presented a national budget with revenue measures including new taxes or rate increases. He has never given credit to the real reasons: the tax reforms arising from the Matalon Report and legislative reforms, including the Tax Administration Act, done by the People’s National Party. His focus on the “no new taxes” leaves behind a stalled growth agenda, which has not moved under the Jamaica Labour Party Government at the same pace it did under its predecessor. Prime Minister Holness recently hinted it would now be getting a push in the face of private sector concerns on issues such as the asset tax.

Dr Clarke’s appointment, historical as it may be, will not change the economic power relations between the IMF and its borrowers. I would not advise Caribbean and Latin American countries to rejoice at having a friend in court. The lender of last resort, although somewhat more alive to social and economic realities, is still tough. With the addition of Dr Clarke to its management and to the team preparing submissions for IMF board consideration, no one should also believe Jamaica is up for any special treatment.

I suggest there will be two phases in Jamaica’s processing of Dr Clarke’s departure to join the IMF. The first is well underway, with encomiums and lavish praises being heaped on him by all and sundry for a Jamaican’s entry on the top floor at 700 19th Street and 1700 Pennsylvania Avenue, NW, Washington, DC.

The second will be remorse at Clarke abandoning the prosperity mission when it has clearly not achieved its objectives. This will include many asking what he achieved and why he left now. In this, the last stage will be worse than the first.

 

Colin Campbell is a former minister of information and development

Colin Campbello

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