Public debt: Jamaica is the Caribbean’s star performer

 Jamaica has made significant progress in reducing its debt from 147 percent of gross domestic product (GDP), and is projected to fall below 100 percent by the end of the current fiscal year, in March 2019.

Jamaica’s Finance and the Public Service Minister, Nigel Clarke, says the country must remain focused on further debt reduction and maintaining fiscal credibility over the long term, in order to avoid a reverse of the gains in these areas.

“We cannot afford to stop there. We must continue on the path of reducing our debt until we get to our objective of 60 percent of GDP by 2025,” Clarke said as he addressed the Private Sector Organization of Jamaica’s (PSOJ) annual economic forum on Thursday.

Clarke said that Jamaica has made significant progress in reducing its debt from 147 percent of gross domestic product (GDP), and is projected to fall below 100 percent by the end of the current fiscal year, in March 2019.

He said while Jamaica now stands out as the “star performer” among Caribbean economies, based on developments in several other states.

“It’s shocking how quickly the fortunes recorded can be reversed. Countries that we would have held up as role models based on their operations and infrastructure, have, overnight, transformed to countries on the edge, nd we should observe that with a strong dose of humility, which should serve to remind us of the connection between economic resilience and debt,” he said.

Clarke revealed that the Holness administration’s goal to reduce the debt ratio to 60 percent of GDP, requires the collaborative input of the private sector to ensure that this goal is achieved.

Jamaica’s fiscal rules were legislated in 2010 and strengthened in 2014, whereby a fiscal balance is prescribed on an annual basis and, based on the prevailing economic variables; all parameters are geared towards achieving the 60 percent debt-to-GDP ratio.

“The Fiscal Council will simply be the guardian and interpreter of those fiscal rules, which already exist, and will help us to remain on this debt-reduction path,” Clarke said. Meanwhile, Clarke says the government is drafting a Public Financial Management for Disaster Risk Policy and Framework, for submission to Cabinet.

The policy aims to strengthen Jamaica’s response to natural disasters through a streamlined national approach that will, as best as possible, facilitate the availability of dedicated resources for recovery.

Clarke added that the policy will be tabled in Parliament following Cabinet’s deliberations, and emphasized that the Holness administration wants to “ensure that we have consensus through a national approach, because natural disasters affect us all”. He said that Jamaica and other Caribbean countries are vulnerable to natural disasters, citing Sunday’s 4.6 magnitude earthquake that shook sections of the island-nation.

Data from the Association of Caribbean States (ACS) show that the Caribbean recorded 165 natural disasters between 1990 and 2008.

Hurricane Gilbert, devastated Jamaica in 1988, and according to Clarke, “data and experience show that they cost countries like Jamaica tremendously”. -(CMC)