Clarkenomics Jamaica

CLARKENOMICS: THE ECONOMICPHILOSOPHY OF DR. NIGEL CLARKE!

So, you want to be Finance Minister of an Island economy: 3 minute post-graduate seminar on “Clarkenomics”.

The Principles of Clarkenomics in Jamaica

By Professor Gilbert Morris

Nassau, NP, The Bahamas

Let’s get context: 3 principles of Clarke’s economic management:

1. Macro-economic stability

2. System buffers

3. Targeted intervention

Before these there is a mandate: Clarke’s tenure as Jamaica’s finance minister is proof for the rule “never accept responsibility without authority”.  Keith Duncan led a Jamaica private sector/civil society group, which together insisted on structural/system reforms.  In 2018 they got Clarke elected to carryout those reforms.  This social contract gave Clarke the freedom to fight the economic situation without infighting; it allowed him to choose his team and implement his programme.

Macro-economic stability (MES):

Discuss with your colleagues which metaphor aligns here: is MES terrain, the track or the train?  It was a non-negotiable foundation of Clarke’s approach.  No party favours, no partisan gifts, no patronage for political lackeys.

Buffers:

Buffers are usually thought of as “policy cushions”, softening impacts where policy is delivered.  But Clarke’s approach escapes textbook assumptions by enacting two-way buffers:

1. Buffers where the policy impacts citizens

2. But also buffers where the policy is protected from external impacts

This point is critical for smallislandstates, because we control nothing and our best laid plans may be waylaid by external forces.  Buffers meant the MES programme was flexible and could be nursed through situations; without excuses.

Targeted interventions:

Where there are anomalies (regressions etc.), one can target solutions/corrections/offsets to keep the whole of society engaged. Clarke’s 2019 Budget - finest in history of Caribbean - was a study in these interventions (tax relief, tuition reduction in exchange for charity volunteerism etc.), generating shared commitment to social well-being, whilst maintaining disciplined economic management.

One of the cardinal tenants of Clarkenomics is “trickle up”:  Dr. Clarke turn the age old text book presumption of “trickle down economics” on its head.  He strategised to ensure that people at the bottom felt the benefits first; hence the tax cuts for low wage earners, assistance for students and small businesses.  Clarke resolved that if we want robust markets, customers must have money in their pockets.  He succeeded in that masterfully!

Clarkenomcs resulted in:

1. Reductions in actual debt/reflected in debt to GDP from 144% to 72%

2. Fiscal Deficit reduced to negligible whilst growing economy over 3%; despite Covid!

3. Tax reductions fairly distributed

4. Small Business assistance

5. Half billion in PPPs for infrastructure development

6. Reform of corporate and land registry

7. Thousands of new homes and reduction of unemployment

8. New ICT architecture

9. Best performing stock exchange in the world for 6 years running

10. Upshot in Jamaican Reputational Capital

Clarke didn’t start this movement - Hon. Peter Phillips initiated social partnerships - he maximised it skillfully and with a new disciplined focus. Numerical targets, dates and transparent reporting ensured accountability.

If you want to be finance minister you can’t simply copy Clarkenomics. But the principles are a good place to start!

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