Jamaica's FinMin makes case for independent fiscal institution

Jamaica's FinMin makes case for independent fiscal institution

Capital Markets Economy & Policy Jamaica

Jamaica's Minister of Finance Nigel Clarke pushed forward the case for an independent "fiscal institution" on the island, saying Jamaica could be the Caribbean region's first country to successfully carry out such an endeavor.

Speaking at LatinFinance's 3rd Caribbean Finance and Investment Forum in Kingston, Jamaica on Thursday, the minister said the path to an independent fiscal council communicated the "depth" of the country's resolve, with or without the IMF.

"You have a government proposing to institute a fiscal council. A government that is saying 'this is what we are going to do,'" Clarke told the audience, adding that a credible path ensured prosperity for all Jamaicans.

Jamaica's fiscal discipline since undertaking an IMF program has been widely applauded by the capital markets. In September, the IMF said it could even free up a further $226m for the sovereign this month after a fourth review of Jamaica's financial and economic program.

Clarke said there were "40 or so" independent fiscal institutions around the world, but pointed out that if Jamaica followed suit, it would be doing so based on the wishes of Jamaica.

"There are probably 40 or so independent fiscal institutions around the world. But where they have emerged, they emerged in moments of crisis and pushed onto a government or demanded by creditors," he said.

Last month, Clarke tabled legislation in Jamaica's House of Representatives that aimed to make the Bank of Jamaica independent. The short title of the bill is the Bank of Jamaica Amendment Act 2018, according to local media reports.

"We hope by legislation and by institution to incentivize greater consistency.. and raising the disincentive of pursuing a fiscal path that is less than credible," Clarke added on Thursday.

Earlier this year, Clarke told LatinFinance that the government was drafting the legislation to give the central bank more autonomy with the agreement of the IMF.

 

Image: Nigel Clarke. By Jamaica Information Services