Political activity is heating up in The Bahamas, where a general election is due soon... ...On the current standing, there could well be another one-term administration in the works with the Hubert Ingraham-led Free National Movement (FNM) seeming to be highly vulnerable... ...Although investment activity in tourism, its leading sector, is picking up, the negative impact of the global downturn is still being felt in The Islands

Government's Paying The Price For Recession

By Dennis Morrison, jamaica-gleaner Contributor:



One does not have to be a student of political economy to understand how the global financial turmoil of the last four years has shaken up the political landscape.

In the United Kingdom, the Gordon Brown-led Labour Party was the first in a string of casualties arising from the sharp economic downturn which is still reverberating across the globe. It seems not to matter whether ruling parties are of right or left orientation, as dissatisfied voters express their anger by discarding incumbents.

Across the globe, the political environment remains volatile under the impact of widespread joblessness, record mortgage foreclosures, and the massive destruction of wealth.

The prospect that there will be no early relief, and the seeming intractable nature of the European debt crisis, mean that the sour political mood will persist.

In America, the Obama administration and the Democrats have borne the brunt of voter dissatisfaction, even though they inherited the crisis and had acted rapidly to halt the precipitous slide in the economy.

In mid-term elections at the end of 2010, American voters turned on the congressional Democrats and booted them out, as economic malaise deepened, and the ranks of the unemployed swelled. With the slow pace of the recovery and gridlock in Congress, the 2012 elections could see another wild swing of the political pendulum.

In the presidential race, the weakness of the Republican candidates could prove decisive, although President Obama's re-election chances are seen to be heavily tied to the pace of improvement in the job market.

gov'ts toppled

Governments were toppled in Belgium, the Netherlands, Iceland, Hungary, Ireland, Portugal and Spain. In France, the second-largest economy in Europe, presidential elections are due in April, and the latest opinion polls are showing President Nicolas Sarkozy trailing his main rival from the Socialist Party. While it is too soon to count him out, his ratings are being depressed by the slow progress in settling measures to stave off the debt crisis in the Eurozone.

Farther afield, the Opposition Democratic Party of Japan won a historic landslide victory in 2009, reflecting deep economic anxieties in that country which have still not eased. Japan's economy has been undergoing two decades of lethargic growth and is the cause of its continued political fragility.

Latin American countries were among the best-performing economies in the turbulent conditions since 2008, recovering fast from the recession and returning to strong growth. A region which is usually highly volatile, the political mood in Latin America has mirrored the economic stability experienced in recent times. Incumbents in Argentina and Brazil were returned to office, and in Brazil, in particular, the anti-poverty programmes of the Lula administration brought political stability.

Governments in the Caribbean have not been immune to the political backlash from the recession. The ruling People's Progressive Party in Guyana won its fifth consecutive term, helped no doubt by the fact that the Guyanese economy had fared better than most in the region. In St Lucia, the incumbent United Workers Party was thrown out after one term, weighed down by political wrangling and leadership issues, but more important, by difficult economic circumstances.

Role in jlp defeat

History was made in Jamaica with the Jamaica Labour Party administration being the first to have the dubious distinction of losing after one term in office since adult suffrage in 1944. Analysts have put arrogance and corruption at the top of the list of factors responsible for the party's defeat.

I would argue, however, that the fact that the Jamaican economy shrank by more than five per cent in the past four years and job losses climbed to more than 100,000 was a more powerful influence on the electoral outcome.

Political activity is heating up in The Bahamas, where elections are due later this year. On the current standing, there could well be another one-term administration in the works with the Hubert Ingraham-led Free National Movement seeming to be highly vulnerable. Although investment activity in tourism, its leading sector, is picking up, the negative impact of the global downturn is still being felt.

Barbados' election cycle runs to January 2013, and the incumbent government there will also be navigating strong economic headwinds.

Growth-inducing strategies and activities that generate employment are not only important to get regional economies moving again but will influence the political tide in the Caribbean. Politicians will have to show their skills at policymaking and management to survive the tide.


Dennis Morrison is an economist. Email feedback to columns@gleanerjm.com.

February 5, 2012

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