The IMF and Jamaica: Some Reflections*

Professor Canute Thompson

The announcement of the appointment of Jamaica’s Finance Minister, Dr. Nigel Clarke, as Deputy Managing Director of the International Monetary Fund, with effect from October 30, 2024, has triggered an avalanche of public commentary and discussion.  One of the positions highlighted is the question of whether the IMF has changed from what it was forty, or so years, ago to the place where it is employing someone from a developing country to serve as Deputy Managing Director.  Another point, raised by others, is that the employment of Nigel Clarke, is a testament to the stellar performance of the Jamaican economy under his leadership, and thus his appointment reflects the view of the IMF that he could deploy his skills to support other developing countries.

Minister of Finance and the Public Service, Jamaica- Dr Nigel Clarke

            The appointment of Nigel Clarke to this role, is undoubtedly a commendable personal achievement. Some commentators have been quick to point out that this is not an achievement for Jamaica, per se, and have argued that Clarke being in that position does not mean that Jamaica will get preferential treatment by the IMF. In response, others have argued that Jamaica does not need (and presumably will not need) any preferential treatment.

I submit, however, that there is a bigger and more important and compelling story about this appointment and that story is really about Jamaica and the Jamaican people of whom Clarke is one of many key players. To understand this story, we need to reflect on the history of Jamaica’s relationship with the IMF.

I submit, however, that there is a bigger and more important and compelling story about this appointment and that story is really about Jamaica and the Jamaican people of whom Clarke is one of many key players.

A brief history of Jamaica’s relationship with the IMF

            In my recently published book, Reimaginative Leadership: Concepts and Applications, I examine Jamaica’s relationship with the IMF. In one chapter, I explore and seek to apply three concepts of “reimaginative leadership” namely, alternatives-thinking, reliance on influence rather than power, and trust. In examining these concepts, I relied on the work of several authorities.

 Wigglesworth (2020) traces the economic history of Jamaica over the forty-year period between 1973 and 2013, and argues, with support from multiple sources, that Jamaica had experienced forty years of anemic economic growth and had been through periods of crises and fiscal incontinence. He further suggests that Jamaica (during the forty-year period) was highly indebted, had high levels of poverty and crime, and was being propped up by international development institutions.

Watershed Year – 2013

The year 2013 was a watershed year for Jamaica’s relationship with the IMF. One of the key issues for which debate is merited is how was that watershed moment handled and what are some of the outcomes of that moment. The World Bank in characterizing Jamaica’s economic journey starting in 2013, argued that we set out on an ambitious reform programme to stabilize the economy, reduce debt, and fuel growth, as well as gaining national and international support.  By 2015, those efforts had begun to bear fruit.

The year 2013 was a watershed year for Jamaica’s relationship with the IMF. One of the key issues for which debate is merited is how was that watershed moment handled and what are some of the outcomes of that moment.

Miami Herald journalist Jacqueline Charles, in a 2019 article, chronicles the journey of Jamaica’s economic turnaround from 2013 when, according to her, but corroborated elsewhere, the then People’s National Party Administration laid the foundations for what begun to bear fruit in 2015.  Charles notes that the successes which began in 2015 continued through to, and were built upon, by the JLP administration of 2016 (to then 2019) and now to 2024.

It is the fact that the journey and experience of the Jamaican people, since 2013 (now 11 years) has been one of economic policy continuity with the stability of 2013 to 2016 being reinforced from 2016 to the present day, which makes Nigel Clarke’s appointment as Deputy MD a statement about his achievement, but more so the sacrifice of the Jamaican people.

It is the fact that the journey and experience of the Jamaican people, since 2013 (now 11 years) has been one of economic policy continuity with the stability of 2013 to 2016 being reinforced from 2016 to the present day, which makes Nigel Clarke’s appointment as Deputy MD a statement about his achievement, but more so the sacrifice of the Jamaican people.

Had Clarke and the JLP abandoned the economic programme which was in place in February 2016, Jamaica would likely have been in a different place today, and Clarke being seen as a finance minister with the qualities valued by the IMF would likely not have happened.

Corroboration of the foregoing assertions can be found in the words of former governor of the Bank of Jamaica Brian Wynter, whom Charles quoted from her 2019 interview with him saying: “What we’ve seen over the last five, six, seven years are things that nobody thought you could tackle.”

In addition to Wigglesworth, the World Bank, Charles, and Wynter, who testified to the watershed moment of 2013, we have the testimony of Dr. Nigel Clarke himself.

As I wrote in Reimaginative Leadership, “Clarke, writing in the Financial Times in February 2019 notes that in 2013, Jamaica’s debt to GDP ratio was 147 per cent.  Four years earlier in 2009, Clarke notes, the debt to GDP ratio was 124 per cent. This growth by twenty-three percentage points or eighteen per cent in four years represented a deadly movement in the wrong direction.  Thus, as Clarke concludes, despite Jamaica securing an agreement with the IMF in 2009 and embarking on a local debt exchange, fiscal restraint could not be delivered and the agreement with the IMF collapsed”. (Page 112)

It is against the backdrop of the collapsed 2009 IMF agreement that the watershed moment of 2013 (which really begun in 2012) is to be seen.  It is also against the backdrop of that collapsed agreement that the increase in the debt to GDP ratio moving from 124% in 2009 to 147% in 2013 is to be placed. Jamaica was without an IMF agreement for approximately four years, and between 2009 and 2013 when the pivotal agreement was secured, upon which Jamaica has successfully built subsequent agreements, the whisper in international financial circles was “Has Jamaica crashed as yet?”

The fact that Jamaica did not crash, or implode, as happened in Greece, is a testimony not only to the wisdom and endurance of the Jamaican people but to the vision and wisdom of its leaders. Some may argue that the JLP administration had no choice in 2016 but to stick to the programme it found in place. I disagree. It could, but it wisely chose to stay the course. Today’s fruits then, are the products of eleven years of planting, nurturing, and sacrificing by the “ordinary Jamaican”, since that watershed period of 2012-13.

Some may argue that the JLP administration had no choice in 2016 but to stick to the programme it found in place. I disagree. It could, but it wisely chose to stay the course. Today’s fruits then, are the products of eleven years of planting, nurturing, and sacrificing by the “ordinary Jamaican”, since that watershed period of 2012 -13.

Some important lessons

If it can be agreed, as the evidence shows, that policy continuity between 2013 and the present is the major explanation for the stability of the Jamaican economy, and that the sacrifices of the Jamaican people are a major contributor to that stability, the question that arises is: “what are the lessons?”.  I suggest that there are, at least, four lessons, as follows:

  • Cooperation and collaboration between the political parties on major issues is possible, and thus no effort should be spared in spreading and replicating that cooperation. Areas such as national security, the environment, education,  corruption and constitutional reform are among those which cry out for strong bipartisan cooperation.
  • That we have had over a decade of macroeconomic stability but still have a low tech, low growth, low-income economy proves beyond a doubt that while macroeconomic stability is important, it is not, by itself enough to spur economic growth and produce high-paying jobs.  There is, therefore, an urgent need for collaboration on those policies and resulting actions which will facilitate economic transformation.
  • Mindful that despite a decade of macroeconomic stability, the economy continues to grow at a mere 1% (as it has in the forty years between 1973 and 2013), should serve as an invitation to our political and academic leaders to conceive of sustained socio-economic transformation as a task for the next two decades, commencing with incremental steps now.  Notions that sustained socio-economic transformation can happen in a flash should be resisted and rejected, and a recognition that it is a task for the long haul embraced.
  • That the people have been willing to pay the high price to earn us the stability of which we now boast, highlights the importance of leaders taking citizens into their confidence, engaging them thoughtfully and relying on their wisdom as we seek to make the next steps.  In simple terms, in the same way economic stability was made possible because the people made great sacrifices, sustainable socio-economic transformation is not possible without widespread people engagement. This is the next watershed which awaits Jamaica. Will she meet it with wisdom?

References

Charles, Jacqueline. Jamaica once couldn’t pay its light bill. Now its economy is welcoming

Porsche and BMW. June 15, 2019. Accessed April 16, 2020. https://www.miamiherald.com/news/nation-world/world/americas/article231234653.html

Clarke, Nigel. Lessons from Jamaica for Small Countries with Big Debts: Reform of Monetary Policy and Iron Fiscal Discipline have been the Keys to Recovery. February 19, 2019. https://www.ft.com/content/04870fa8-2e12-11e9-80d2-7b637a9e1ba1 Accessed April 16, 2020.

Thompson, Canute. Reimaginative Leadership: Concepts and Applications. Kingston: UWI Press, 2024

Wigglesworth, Robin.  Inside the IMF’s Outrageous, Improbably Successful Jamaican.

Programme (Pt. 2). February 17, 2020. Accessed from https://ftalphaville.ft.com/2020/02/13/1581590046000/Inside-the-IMF-s-outrageous–improbably-successful-Jamaican-programme–Pt–2-/ April 16, 2020


* This article relies on work published in the author’s recently published book Reimaginative Leadership: Concepts and Applications. The book is published by The University of the West Indies Press.


Canute Thompson is Professor of Educational Policy, Planning and Leadership and Director of the Caribbean Centre for Educational Planning at The University of the West Indies, Mona Campus, a social activist, and author of eight books and eighteen journal articles.

His academic achievements include:

Two Principal’s Awards in 2020 for Most Outstanding Researcher and Best Publication for his book, Reimagining Educational Leadership in the Caribbean.

Two Principal’s Awards in 2023 for research activity generating the most funds, and research activity with the most development impacts, serving as Project Director for a project executed by the Caribbean Centre for Educational Planning.

A 2022 Bronze place winner in the Independent Publisher Book Awards for his book, Education and Development: Policy Imperatives for Jamaica and the Caribbean.

A 2021 finalist in The Vice-Chancellor’s Award for Excellence for all-round excellent performance in Outstanding Teaching, Outstanding Research Accomplishments, Outstanding Service to the University Community, Outstanding Public Service.

A 2021 Principal’s Award for Most Outstanding Researcher. 

2 thoughts on “The IMF and Jamaica: Some Reflections*”

  1. I strongly recommend this article to ALL Jamaicans. Particularly those in leadership positions . All Jamaicans including those in the diaspora .

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