Lance Neita | Jamaica needs Clarke more than the IMF does

Everyone is busy saying goodbye to Finance Minister Nigel Clarke and hurrying him on to his date with destiny. I share in the good wishes and the enormous pride that Jamaicans have in this appointment.

In my memory, which stretches back quite a few years, I cannot recall any government minister leaving his Cabinet post prematurely and of his own accord, and receiving this level of approbation. If we are not careful Dr Clarke may look at all this hype and change his mind about going. “They are in too much of a hurry to get rid of me. I thought that at least they would have asked me to stay.”

Well, I have news for the minister. This is one person who wants him to stay. I keep hoping that he will reconsider his decision and change his mind.

The IMF managerial assignment is a hugely important post in the context of world affairs and the global economy. We are proud of our Jamaican and Caribbean man’s elevation to this important position.

But Jamaica needs him more than the IMF does. While the perks must be very attractive, the truth is that Dr Clarke is long accustomed to that lifestyle. It must be the challenge, the power and the authority to influence world view and international aspirations that is luring the minister away from Jamaica. The perks matter, yes, but the man we have seen in the finance minister’s chair is more than that.

He has been an awesome minister of finance; some say he is arguably the best. He displays confidence without a swagger, is disciplined but not ascetic, charming but focused, and displays the all-important ability to explain his policies to any level of the population inclined to listen.

MATHEMATICAL GENIUS

He is superbly gifted with a mathematical genius that few can aspire to or lay such claim.

But hold the applause. We could be well served by these qualities right here at home. He is of the prime ministerial material that Jamaica needs post-Andrew and Mark, perhaps after the next five years. Maybe nobody has told him this yet. Maybe he doesn’t believe it is possible.

Yet this man is so technically empowered that his track record reads like an encyclopaedia of achievements.

He has had a legendary career in national and international business and finance. What is not so well known is that in addition to his leadership of major economic institutions, he is also recognised for his role in education and youth empowerment.

There is an interesting parallel in careers and contribution to be made between another finance minister, who was also a prime minister and who stands on the same platform of public service distinction as Dr Clarke. That man is none other than Edward Seaga.

Ever since Dr Clarke’s appointment brought the lending agencies back into public interest, our minds have been cast back to the rocky road that Jamaica has had to travel with trying to satisfy the strictures of the IMF and the World Bank.

They used to say nobody fights the IMF and wins. But there is one landmark period in the history of our relationships when a minister stood up to their strict, rigid, and severe approach to lending and financing.

In 1981, Jamaica had gone back to the IMF after a previous government had opted out of the conditionalities aimed at coercing our economy back into line following a runaway period of depleted foreign-exchange reserves.

The incoming prime minister, Edward Seaga, resumed borrowing from the IMF and the World Bank and saw the economy off to an encouraging restart.

But by 1983 the world recession and the corresponding drastic fall in bauxite/alumina exports, occasioned by the deterioration of the world aluminium industry, put the country right back where it had started.

An IMF standby arrangement of 1984 introduced harsh adjustment programmes that included massive staff cuts across the public service and an insistence on further dollar depreciation as the principal adjustment tool.

The year in which the most severe adjustments were to be applied, 1985, was also the year of the steepest decline in bauxite earnings, which cut the nation’s foreign-exchange earnings by 60 per cent and revenue by 48 per cent.

PRESSURING THE GOVERNMENT

With the IMF and the World Bank pressuring the government to accede to the agencies’ harsh requirements, Seaga took the fight to Washington in rounds of meetings with the IMF managing director and the World Bank president and their staffs in a battle to stay the execution of their devaluation strategy.

“After prolonged attempts to obtain approval to cease any further depreciation, I decided to take matters in my own hands. I instructed the Bank of Jamaica (BOJ) to cease any payment to the IMF, except for debt obligations.”

This rocked back the IMF on their heels. Even his technical team thought he had gone too far.

The prime minister stuck to his guns, with the result that the IMF finally agreed in March 1987 to allow the BOJ to maintain an exchange rate of US$1.00 to J$5.50. From that point on and for the remainder of the decade, the economy operated on a ‘pegged’ exchange rate.

Now the table has turned, and the giant IMF is getting a deputy managing director on their team who possesses the same boldness, steadfastness, skills and determination as Seaga.

It’s not too much to see this man in the future sitting in the same chair as prime minister and minister of finance.

Here is an interesting counterpart story to Clarke’s imminent departure. Shortly after the JLP’s loss to the PNP in 1972, Seaga was approached by the heads of government of the Caribbean countries to be the president of the Caribbean Development Bank headquartered in Barbados.

“For some reason which I didn’t then understand,” he said, “my mind was focused on unfinished work in Jamaica and on the prospect for playing a pivotal role in our future development. I thanked them for the confidence they had shown in me, and declined their invitation.”

Our loss of a possible future prime minister will be the IMF’s gain, unless we can turn him back.

Lance Neita is a public relations professional and an author. Send feedback to columns@gleanerjm.com and lanceneita@hotmail.com.