The third quarter of 2007 delivered two events that marked the end of one chapter in Jamaica’s history and the beginning of another. On August 19, Hurricane Dean — which would intensify to Category 5 before making landfall in Mexico two days later — passed south of Jamaica as a Category 4 storm, its 150-mile-per-hour sustained winds producing significant damage to the south coast, agricultural parishes, and the rebuilt infrastructure that the island had spent three years restoring after Ivan. Fifteen days later, on September 3, Bruce Golding led the Jamaica Labour Party to a narrow election victory — 33 seats to 27 — ending eighteen years of People’s National Party government and handing power to an opposition whose campaign had been built, above all else, on the promise of a safer Jamaica.
- Hurricane Dean makes Category 4 passage south of Jamaica on August 19, causing widespread damage
- South coast communities, agricultural parishes, and Negril area absorb significant wind damage
- JLP wins general election September 3 with 33 seats; Bruce Golding becomes Prime Minister
- PNP’s 18-year tenure ends; Portia Simpson Miller concedes in historic political transition
- New Golding government inherits tight fiscal position, Dean repair bill, and rising oil prices
- Global credit markets continue deteriorating post-Bear Stearns; Northern Rock runs in UK September
Hurricane Dean had been tracked by the Meteorological Service of Jamaica for days before its August 19 passage, and the island’s disaster preparedness systems — which had been significantly upgraded in the wake of Ivan’s 2004 destruction — had time to activate. Evacuation orders went out to south coast communities whose low-lying geography had made them vulnerable to storm surge, and the agricultural parishes of Clarendon, Manchester, and St. Elizabeth began the pre-storm crop protection measures that three years of storm experience had made routine. Dean’s centre passed south of the island, but a Category 4 storm’s wind field is wide: sustained hurricane-force winds extended well to the north of the track, and the western end of the island, including the Negril tourist corridor that had been rebuilt since Ivan, took the brunt of the system’s northern quadrant.
The damage assessment that followed Dean’s passage in the days and weeks before the election was sobering. Agricultural losses were extensive — banana plantations flattened, sugar cane lodged, and small-farmer crop stands destroyed in ways that would take months to restore to production. Infrastructure damage along the south coast road network and in the areas of greatest wind exposure added another repair bill to a capital budget that had been managing Ivan’s reconstruction costs since 2004. The north coast tourist facilities, benefiting from their location further from Dean’s track and from the infrastructure upgrades that had been made in Ivan’s aftermath, performed better than the south coast: most Montego Bay and Ocho Rios properties reopened quickly, and the forward booking data that the Jamaica Tourist Board monitored showed a less severe cancellation pattern than Ivan had produced in 2004.
Portia Simpson Miller called the general election for September 3 — a decision that would be scrutinised by her supporters for years afterward — just two weeks after Dean’s landfall, when the damage was still being tallied and the government’s emergency response was still in its active phase. The timing exposed her government to the charge that it was managing a hurricane while simultaneously managing an election campaign, and the optics of the two events running in parallel were not favourable to an administration whose record the opposition had been criticising for months. The JLP’s campaign pivoted effectively to the storm response, questioning the speed and adequacy of the government’s disaster management, and adding the Dean damage to its security and economic critique as evidence of a government that was struggling to protect Jamaicans from the threats — human and natural — that shaped their daily lives.
The September 3 election result was among the narrowest in Jamaican electoral history. Bruce Golding’s JLP won 33 parliamentary seats to the PNP’s 27, a margin of six seats in a 60-seat Parliament that represented approximately 45 per cent of the popular vote for the JLP against 44 per cent for the PNP. The electoral arithmetic was almost perfectly divided along the partisan lines that had defined Jamaican politics for decades, and the six-seat majority that Golding had won was thin enough that any significant defection or by-election loss would threaten the government’s working majority. Portia Simpson Miller conceded on election night with the dignity that her supporters and the country had come to expect from her, accepting the verdict of an electorate that had given the JLP its first chance at government since 1980. Golding was sworn in as Prime Minister on September 11, 2007 — the exact third anniversary of Hurricane Ivan’s passage.
The economic environment into which Golding’s new government was inaugurated was considerably less hospitable than the one that had greeted Portia Simpson Miller eighteen months earlier. Oil was trending toward US$80 per barrel and showing no sign of reversal. The global credit markets were in a state of sustained stress that the Bear Stearns collapse had initiated in June and that the September 2007 run on Britain’s Northern Rock building society — the first bank run in the United Kingdom since the nineteenth century — was amplifying into a broader crisis of confidence in the financial system. The Dean repair bill would add to a fiscal framework that had been running on tight primary surplus targets with minimal reserves. Audley Shaw, the incoming Finance Minister, inherited a set of fiscal books that demanded the same discipline as his predecessor’s while providing less room to exercise it.
The international signal that registered most urgently on Jamaica’s economic monitoring in the closing weeks of the quarter was the Northern Rock crisis in the United Kingdom. Northern Rock’s run — in which depositors queued outside branches to withdraw savings after the Bank of England’s emergency liquidity support became public knowledge — represented the arrival of the US credit market crisis in the real economy of Jamaica’s second-largest tourism source market. British consumer confidence was being directly affected by a financial system crisis, and the Caribbean tourism bookings that British consumers made months in advance were the variable most immediately at risk. The Bank of Jamaica began tracking UK consumer confidence data alongside its standard monitoring of US indicators.
What This Means
The third quarter of 2007 was the pivot point that Jamaica’s political and economic history would later identify as the moment when the decade’s two defining processes — the island’s political transformation and the global financial crisis’s development — intersected. Dean added a fifth hurricane-season repair bill in four years, testing the rebuilt infrastructure and the fiscal framework simultaneously. The election ended the PNP’s eighteen-year run and gave the JLP’s Bruce Golding the opportunity to govern that his party had been preparing for since Seaga’s retirement. And the Northern Rock run showed that the financial crisis that had been a Wall Street specialist concern since Bear Stearns was now a Main Street reality in one of Jamaica’s most important source markets. The new government had been elected on a security and economic change platform. It would need every tool available to deliver on it.
The Road Ahead
The fourth quarter of 2007 would bring the Golding government’s first weeks in office, the Dean reconstruction programme’s peak expenditure phase, and the continuing deterioration of global credit markets that would eventually produce the most serious financial crisis since the 1930s. Audley Shaw’s first budget would have to be presented in a global environment that was changing faster than any fiscal planning cycle could accommodate, and the winter tourism season that would sustain Jamaica’s foreign exchange reserves would be booked by consumers who were watching their home equity values and retirement savings fall in ways that had not happened in a generation.
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