Finance Minister of the Year 2022

Finance Minister of the Year, Global and Europe
Gintarė Skaistė, Lithuania 

Gintarė Skaistė’s first few months as Lithuania’s finance minister was certainly a baptism of fire. The new government — a tripartite coalition of the Homeland Union-Lithuanian Christian Democrats, the Liberal Movement and the Freedom Party — took office in mid-December 2020 and the finance ministry had to quickly prepare the state budget for 2021, ensuring adequate support for the economy and the society in face of the ongoing Covid-19 pandemic. 

At the same time, it also had to develop the government’s programme, New Generation Lithuania, supported by the European Recovery and Resilience Facility (RRF), to ensure the country’s transition towards being a more equitable, smarter and high added-value generating country. In July, the European Commission endorsed Lithuania’s €2.2bn recovery and resilience plan.

Ms Skaistė, winner of the 2022 Global Finance Minister of the Year, is proud of what she considers to be her biggest achievement in the past year. “The RRF will play a key role in enabling Lithuania to emerge from the Covid-19 pandemic stronger, imposing a lasting positive effect on our economy, and transforming it by accelerating our digital and green transition — two cornerstones of our recovery and resilience plan, with almost 68% of the allocation combined,” she adds. 

Impressively, the Lithuanian economy withstood the pandemic shock relatively well. The economy contracted by just –0.1 % in 2020 and has demonstrated strong growth rates of more than 4% in 2021, which should continue in 2022. “Lithuanian society has adapted to the changed conditions due to Covid-19; businesses have shown a dynamic transition to the digital environment, which was one of the reasons that allowed the economy to withstand the shock well,” she says. 

In 2021 Ms Skaistė developed tax aid measures to help the hardest affected sectors, with tax refunds and deferrals based on taxes paid and appropriate sectoral incentives. “This has promoted the transparent payment of taxes and provided the necessary support to business,” she adds. She is also supportive of a new international corporate income tax regime.

Clearly, Ms Skaistė hit the ground running, but her pace did not slow throughout 2021. Some of the notable initiatives she took include: forming a group of market participants and public sector representatives to draw up the Guidelines for the Development of the Lithuanian Fintech Sector in 2022–2027; announcing ambitions for Lithuania to become home to the European anti-money laundering competence centre; issuing a €750m 30-year Eurobond in July and opening it up to domestic investors in September; and signing a memorandum of understanding with Latvia and Estonia to create a pan-Baltic capital market aiming to make the states more visible to foreign investors and increase small and medium-sized enterprises’ (SMEs’) access to broader financing possibilities.

At the end of 2021, the ministry and the European Investment Fund announced €364m in new financing support for Lithuanian SMEs dealing with the economic fallout of the pandemic, part of the Pan-European Guarantee Fund. 

Ms Skaiste’s priority for the national policy agenda in 2022 is fiscal policy encouragement to contribute to tackling the long-term issues identified by the European Commission: education, health and social matters. At the same time, she believes that the effective use of European support is very important because it is creating new opportunities for Lithuanian businesses and residents. 

“When it comes to the European policy agenda, my priorities are completing the Banking Union and reviewing the Stability and Growth Pact, making the rules more fit for purpose — focusing not only on stability, but also on growth,” she says. 

Finance Minister of the Year, Americas
Azucena Arbeleche, Uruguay  

Any investor in Uruguayan bonds would be familiar with Azucena Arbeleche. The country’s finance minister since March 2020 — and the first woman to hold such position — Ms Arbeleche had previously overseen the finance ministry’s debt management unit. 

Now, her leadership will likely have an impact beyond the Latin American country, as she has recently been appointed chair of the International Monetary Fund and World Bank’s (IMF/WB) development committee. In this position, she has made clear her views on emerging markets’ debt: countries with good environmental policies should enjoy cheaper multilateral loans, just as green issuers benefit from more advantageous conditions in the bond capital markets.

Investors have certainly benefited from Uruguay’s environmental, social and governance (ESG) policies, which the finance ministry believe are behind its dollar-denominated bonds’ performance in 2020, outdoing all other emerging markets, according to the Bloomberg Barclays Emerging Markets Hard Currency Index. 

Uruguay’s competent handling of the pandemic also helped, as the small country contained the spread of the virus and the number of deaths, despite spiralling figures across its borders in Brazil and Argentina.

Uruguay is also preparing to issue a sustainability-linked bond — the first of its kind by a sovereign — which would raise funds on the back of the country’s ESG credentials and sustainability plans, rather than having proceeds tied to a specific green project. Interest payments would be linked to environmental indicators: if they are met, payments go down. 

“I feel honoured to receive The Banker’s prestigious award as Finance Minister of the Year in the Americas,” says Ms Arbeleche. “I believe this is a testament to Uruguay’s solid institutional and democratic foundations, its responsible and transparent macro policies during the pandemic, and our ambitious and forward-looking reform agenda.” 

She adds: “More than ever, Uruguay remains at the forefront of environmentally friendly policies and is a sustainable-focused country. In that spirit, in my role as chair of the IMF/WB development committee, I will put forth an agenda to introduce sovereign debt instruments and multilateral loans that link the cost of borrowing to a country’s success in meeting its climate change targets under the
Paris Agreement. 

“Simply put, we need to differentiate lending conditions based on countries’ contribution to global public goods, rewarding sustainable policy-making.”

Finance Minister of the Year, Asia-Pacific
Hong Nam-ki, South Korea  

Holding a country’s economy steady through the Covid-19 pandemic has been a feat few have managed, but this is what South Korea has been able to achieve due to the strong actions of finance minister Hong Nam-ki. 

Mr Hong, who also serves as the country’s deputy prime minister, has held the position since December 2018, bringing all his experience to bear to see South Korea through the pandemic. As a result, the country experienced only a modest decline of 0.9% in gross domestic product (GDP), to $1.63tn, during 2020. With this figure as a baseline, the government set a 4.2% growth target for 2021.

To reach the country’s ambitious economic aims for this year, Mr Hong announced several initiatives to keep the economy on track. Using the excess from the tax revenue and the state budget, Won12.7tn ($11bn) was allocated to assist small and medium-sized enterprises and vulnerable people impacted by the pandemic, with support measures including low-cost loans and reduced electricity bills. 

Other measures Mr Hong introduced included providing more childcare services, with the aim of getting more mothers back into work to stem the decline in the working age population.

To expand South Korea’s trading potential, which would help bolster GDP, Mr Hong announced plans to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade agreement signed by 11 countries on both sides of the Pacific. 

And with an eye to developing the green economy and reaching its carbon-neutrality goal, South Korea has outlined plans to invest Won73tn into green-energy initiatives by 2025. The figure, which represents 3.8% of the country’s GDP, will be used to develop and fund environmentally friendly projects. 

Following controversies in South Korea’s property market, which saw employees of a state-run housing company speculatively purchase land, Mr Hong declared there would be a tough response and committed to confiscating any properties which had been unfairly obtained. More broadly in the country’s housing market, efforts are being made to stabilise the market as both price increases and demand have slowed since the third quarter of 2021. Recent measures include increasing taxes and tightening loan regulations to restrict further rises in house prices.

Finance Minister of the Year, Middle East
Mohammed Al-Jadaan, Saudi Arabia  

Serving at the helm of Saudi Arabia’s Ministry of Finances since 2016, Mohammed Al-Jadaan has overseen the country’s finances through a period of unprecedented change. Under his watch, Saudi Arabia’s finances begin 2022 in rude health, thanks to rebounding oil revenues — and he remains determined to keep public spending at responsible levels for the year to come.

The recovery of oil prices to pre-pandemic levels has enabled the Ministry of Finance to forecast a surplus of SR90bn ($24bn) for 2022 — its first for eight years — following a fiscal deficit of 2.7% of gross domestic product. The ministry remains disciplined in its approach to spending, outlining a 6% reduction, with surplus funds set to boost government reserves and development funds, as well as the country’s Public Investment Fund. 

The International Monetary Fund has praised the Saudi government’s response to the Covid-19 crisis, noting that the country entered the pandemic with strong policy buffers and reform momentum. The fund notes that the government has not hesitated to withdraw or revisit fiscal and employment support measures introduced in early 2020 as the pressures have eased. 

The healthy state of Saudi Arabia’s finances was confirmed in November when Moody’s revised its outlook on the country’s debt from negative to stable, on the expectation that “the government will reverse most of the 2020 increase in its debt burden while also preserving its fiscal buffers”. 

The country was active on debt markets during the year, with a $5bn issuance in January, euro-dominated bonds in February, and a $3.25bn offering in November. 

In late October, Mr Al-Jadaan told Reuters that the country had appointed advisors for a green debt issuance, but had not yet decided on the format. Plans for the issuance came to light shortly after the country announced a partnership with HSBC to stimulate green investment opportunities, identifying sustainable investment opportunities within the country for local and overseas investors, and identifying overseas sustainable investments for Saudi companies.

Finance Minister of the Year, Africa
Ukur Yatani, Kenya   

Kenya’s finances remain under pressure going into 2022, as rising energy and food costs fuel inflationary pressures. Nevertheless, the country’s finances have rebounded strongly in 2021 after the economy’s first contraction in 30 years in 2020. The country’s economic resilience and response to the pandemic have drawn praise from the International Monetary Fund, as has the country’s commitment to economic reform. 

“[The Kenyan authorities’] proactive approach will enable expanding Kenya’s Covid-19 vaccination programme and meeting emerging needs, while achieving their goal of addressing debt vulnerabilities,” said a spokesperson for the fund in a November statement.

As cabinet secretary for Kenya’s National Treasury and Planning Ministry, Ukur Yatani has been awarded The Banker’s Finance Minister of the Year for Africa, in recognition of his management of government finances during a difficult period, alongside his involvement in significant international partnerships and green financing initiatives. 

In July, the Kenyan government announced a landmark partnership agreement with the UK focusing on financial services. The agreement, which follows the ratification by Kenya of a trade agreement between the two countries in March, is set to channel significant international investment into Kenya and the wider east African region. It will also position Kenya as a regional financial hub, competing with Dubai as a conduit for trade. 

The country raised $1bn in July in its first Eurobond sale in two years, with just under $6bn worth of orders. 

In November, Mr Yatani was at the forefront of the Africa Green Finance Coalition, an initiative unveiled at the COP26 summit in Glasgow that aims to accelerate green finance policy and regulatory reform in a bid to attract funding for African green projects from local and international investors. 

In the same month, Mr Yatani announce that the National Treasury was on the verge of signing an agreement with international tax authorities to improve information reporting and sharing, compelling greater transparency about foreign shareholdings, in a bid to reduce tax avoidance.