IN last week’s article, ‘Turning post-Melissa confidence into growth’, about the keynote speech by Prime Minister Dr Andrew Holness at the Jamaica Stock Exchange conference I emphasised the critical role of the over US$6-billion financing package from the multilaterals in maintaining confidence in Jamaica’s economy.

However, the prime minister also signalled several significant changes in key elements of Jamaica’s economic policy for the past 25 years.

Firstly, he observed that energy costs remain one of the most important constraints on productivity in small island economies and that post-Hurricane Melissa this remains a major area of focus for the Government as part of the pivot to growth. He said, “That is why the Government issued the notice to JPSCo [Jamaica Public Service Company] in July 2025 regarding the licence which expires in 2027.”

The prime minister advised he has commenced the process of negotiation with JPS “to see whether there can be mutual agreement on new licence terms that will result in a path to lower electricity costs, expansion in renewable energy capacity, improved customer service, and accountability as well as improved grid resilience to natural disasters”. No doubt, in relation to this objective, he has appointed a new permanent secretary in the Ministry of Energy, Telecommunications and Transport.

Critically, he argued, regulatory frameworks are not meant to be frozen in time. This appears to apply particularly to his view of our financial architecture. In his speech, he correctly observed that Jamaica’s post-Financial Sector Adjustment Company (Finsac) regulatory architecture was forged in an era when the central imperative was risk containment — namely “to stabilise an economy emerging from crisis and to protect the system from failure”.

Arguing that it “has been a phenomenal success in achieving that mission”, Prime Minister Holness continued: “We now have a responsibility to build on that success. The architecture that once focused primarily on risk containment must now be recalibrated to enable opportunity.”

In short, “The same framework that shielded Jamaica in a period of vulnerability must now be adapted to support expansion, innovation, and scale in a period of strength. This is not a repudiation of what has worked, it is the next logical step in Jamaica’s economic evolution.”

As justification for this view, he correctly argued that today Jamaica operates in a vastly different macroeconomic environment of significantly lower public debt, robust external reserves, and credible and durable fiscal anchors.

Very importantly, he noted that today Jamaica has deeper, more sophisticated domestic capital markets, but the risks are different, and the instruments are more complex. However, the opportunities are far greater and it is, therefore, time —“deliberately, responsibly, and transparently — to revisit and modernise elements of the financial regulatory framework”.

This is not meant to weaken stability, but to ensure that Jamaica’s regulation is aligned with evolving risk profiles, increased market sophistication, innovation in financial products and instruments, and the imperative for capital markets to play a more dynamic role in fuelling economic resurgence and resilience.

He called this, not deregulation, but “smart regulation” for a stronger economy, promising that stability “remains non-negotiable” and that “financial soundness will always be protected” but, critically, “stability must now serve as a foundation for growth, not a ceiling upon it”.

In summary, he believes: “The regulatory regime must evolve. It must continue to preserve confidence but also focus on unlocking capital, deepening markets, and positioning Jamaica’s financial system to support the next phase of national development.”

In another key part of his speech, entitled ‘Resilience in a Fractured Global Environment’, the prime minister noted that Jamaica is operating in a world of rising geopolitical tensions and economic fragmentation in which “climate events, geopolitical tensions, supply-chain disruptions, financial volatility, and security risks do not occur sequentially, but overlap and reinforce one another”, similar to the arguments of an ongoing global polycrisis by academic Adam Tooze.

Jamaica on the Regional Stage

It is, therefore, worthy of note that at the International Investment Forum held last week in Panama, the so-called Davos of this region, that, of the Caricom countries that attended, Jamaica was the only one highlighted.

The forum was convened by one of our key post-Melissa future funders, the Development Bank of Latin America and the Caribbean (CAF). Unlike other multilaterals, most of Europe, Asia, the US, and Canada are not members of this development bank. The meeting focused on how to take advantage of the historic geopolitical upheaval which is redefining the system that governed the world since World War II.

Commenting on the forum, which he attended, former Inter-American Development Bank (IDB) regional general manager and senior advisor to CAF, Gerard Johnson, observed that the key message coming out of the conference was that the countries of Latin America and the Caribbean (LAC) are at risk of being left behind. They are among the slowest-growing economies, have low productivity, particularly unequal societies, high public debt, are vulnerable to natural disasters, and rely heavily on North America for trade. “Regardless of scale, it is clear that we share the same challenges,” he said.

He notes that CAF organised a specific forum that focused on Jamaica: “Several of our ministers led workshops to attract investments and share our successful policies to manage risks and speed up recovery from external shocks. Our prime minister represented the Caribbean when he joined other regional leaders (Bolivia, Brazil, Chile, Colombia, Ecuador, Guatemala, and Panama) in calling on political and business leaders to look beyond the challenges to grasp the opportunities created by the emergence of a new global economic alignment.”

Observing that the LAC largely produces inputs to production that takes place in other regions and sources its inputs from suppliers in those countries, Johnson observed: “The irony is that much of the inputs the Caribbean imports from North America for our manufacturing, hotel, construction, and food manufacturing sectors is actually produced in other parts of LAC. The forum encouraged the formation of direct trading links, and the new US tariff regime is clearly accelerating this process.”

With respect to Caricom, Johnson said: “The admonition by the PM at the forum that LAC must reduce barriers between our countries to drive competition and forge new trading relationships has particular relevance for the Caricom Single Market and Economy. We should not hesitate to take a hard look at it to ensure it has not become a hindrance to diversification, sustainability, and growth.”

Keith Collister