December 27, 2011 / 5:15 PM / 8 years ago

Ruling party under pressure in Jamaica election

KINGSTON (Reuters) - Jamaica’s youngest-ever prime minister is battling to keep the ruling party in power on Thursday in a closely contested general election in one of the world’s most indebted countries.

Andrew Holness, Jamaica's new Prime Minister, delivers his inaugural address after being sworn-in as Jamaica's ninth Prime Minister of Jamaica, in Kingston, October 23, 2011. REUTERS/Andrew P. Smith

Jamaica, like many small Caribbean countries, has struggled to recover from the global financial crisis and tame a towering debt load. According to the International Monetary Fund, it is one of five Caribbean countries that rank among the world’s 13 most indebted nations.

Whoever wins the election on Thursday will face significant hurdles to resuscitate a tourism-dependent economy that has failed to grow over the last four years and been hard hit by economic troubles in the United States and Europe.

“We have some medicine to take in the New Year,” Prime Minister Andrew Holness said recently, alluding to the challenges.

It will be a close election battle between Jamaica’s two dominant parties — the ruling Jamaica Labour Party (JLP) led by Holness and the opposition People’s National Party (PNP).

A recent poll by Market Research Services showed the PNP with 39 percent support compared to 35 percent for the JLP. The survey had a margin of error of 3 percent.

The PNP is headed by Portia Simpson Miller, who briefly served as Jamaica’s first female prime minister from March 2006 to September 2007.

The new prime minister will serve a five-year term.

Holness, 39, was appointed in October by JLP lawmakers to succeed former Prime Minister Bruce Golding who stepped down after four years amid criticism of his handling of a politically charged U.S. request for the extradition of a notorious Jamaican gang leader.

Golding’s government stalled for months after it received a request in 2009 for the extradition of Christopher “Dudus” Coke, who was wanted on drug-trafficking charges in New York.

When the government finally bowed to U.S. pressure in May 2010 to move against Coke, 76 people were killed in gun battles pitting the police and military against Coke loyalists.

The case dogged Golding and threatened to derail the ruling party’s chances of holding on to power in a general election originally expected next year.

Holness’ youthful image gave the JLP a temporary lift and, with an eye on the unstable global economy, he moved earlier this month to bring the election forward.

Jamaica’s debt load stands at more than 120 percent of gross domestic product, with debt payments gobbling up nearly half of the country’s budget and leaving dwindling resources to pay state workers and fund schools and hospitals.

The economic challenges are very similar to what we’re seeing in some of the European countries right now,” said Carl Ross, managing director at Investments Oppenheimer, which actively trades Jamaican debt.


In a country of pristine beaches but also crime-ridden shantytowns, Jamaica’s jobless rate has risen to 12.9 percent.

The economy shrank just over 1 percent last year. Many Jamaicans say they are worried by what they perceive as a growing number of panhandlers on the streets.

“Things are really tough,” said Jennifer Palmer, a mother-of-two in the capital of Kingston. “The cost of living keeps going up. I don’t know which party I should support, because the two are just about the same.”

Despite a history of election violence, the run-up to the vote has been one of the most peaceful in years.

Buffeted by the global economic crisis, Jamaica turned to the International Monetary Fund in 2010 for a $1.27 billion economic lifeline.

But little progress has been made this year in the so-called standby agreement which lays out plans for Jamaica to sell off some state-owned assets and rein in government spending in exchange for loan disbursements.

Jamaica completed the sale earlier this year of its three largest state-owned sugar factories to a China-based company to help tame a budget deficit.

The government has said it also plans to sell a stake in an alumina refinery, one of its few remaining assets with significant sale value.

The two leading parties differ little in their economic prescriptions for the ailing economy. Both are centrist and pledge to continue to work with the IMF on the economic program.

Holness has said that if he remains in office, he hopes to return the country to economic growth by attracting private investment to infrastructure projects.

Simpson Miller has said she would appeal to the IMF to extend the period the country has to repay any loans.

However, Ross said any new leader ultimately would have few tools to jump-start the economy and likely will be forced to implement more belt-tightening.

“Whatever government is elected will probably be facing several years of austerity,” he said. “It’s a lot like Greece, where you wrack your brain thinking ‘How is this economy going to grow?’” he said.

Additional reporting and writing by Kevin Gray; Editing by Kieran Murray

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