Jamaica Ruling Party Wins Landslide Mandate to Lead Recovery

(Bloomberg) -- Jamaica returned 48-year-old Prime Minister Andrew Holness to power in a landslide election victory Thursday as the Caribbean island tries to claw its way out of its worst-ever economic crisis.

With 98.9% of ballot boxes counted, Holness’s Jamaican Labour Party was ahead in 49 of the 63 parliamentary constituencies, compared to 14 seats for the opposition People’s National Party led by former Finance Minister Peter Phillips.

“We will usher in an era of stability in which we will grow, and usher in an era when Jamaica can fulfill its true destiny,” Holness said after his victory.

On Friday, Fitch Ratings said Holness’ reelection “signals economic and fiscal policy continuity.” But the agency warned the island’s short-term outlook will depend on the administration’s coronavirus stimulus plans, as the future of tourism -- which represents about 20% of GDP -- remains uncertain.

The Jamaican dollar and the benchmark 2045 sovereign bond were both little changed Friday.

Jamaica has undergone one of the most dramatic turnarounds in emerging markets in recent years, slashing government debt, opening the doors to Chinese investment and driving unemployment down to record levels. Holness has pledged to get the island of nearly 3 million people back on track from the devastation caused by the pandemic, which left its tourist resorts empty for months on end.

Speaking alongside Holness on Thursday night, Finance Minister Nigel Clarke said that the country is going through “the greatest crisis that Jamaica has faced.” Gross domestic product will plunge 7% to 10% this year, according to the central bank, which would be the biggest drop since at least 1980.

Jamaica’s stock market is down 36% in dollar terms so far in 2020, the worst performer among more than 90 primary indexes tracked by Bloomberg. Over the preceding decade it provided the world’s best returns.

But voters on the Caribbean island didn’t blame Holness for the Covid-19 crash, and his forceful response to the pandemic as well as his backing for large public works projects bolstered his popularity.

In many ways, the election was a referendum on which of the two men is better suited to pull the nation out of the health and economic crisis, said Kevin O’Brien Chang, an independent political analyst.

“People were asking themselves, ‘Who should I entrust my life and my children’s life and livelihoods to?,’” Chang said from Kingston . “The election showed they trust Andrew Holness, he’s massively popular.”

Holness has vowed to make the central bank independent, keep tight curbs on spending and fight corruption during his second five-year term.

The opposition People’s National Party went into the race holding 29 out of the 63 seats. The prospect of losing half of its representatives in parliament was “quite shocking” and a “severe loss,” said the party’s campaign manager, Phillip Paulwell.

Before the results came in, Phillips, the 70-year-old leader of the PNP, said he would resign from the party and politics if he lost the race.

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