Recovery time

The Economic Programme Oversight Committee (EPOC) says it fully supports the Government’s decision to fully reopen the economy and put the country back on track in order to recover from the loss in earnings due to the COVID-19 outbreak.

Speaking at a virtual press conference yesterday, EPOC Chairman Keith Duncan pointed out that the country cannot sustain the 12 to 14 per cent contraction quarter over quarter which the Planning Institute of Jamaica (PIOJ) has projected for the April to June quarter of this year.

“We have to contain the spread of the virus while increasing economic activity, but it should be done in a safe, structured, and controlled manner,” he said, noting at the same time that the country was never in full shutdown mode, as certain industries, such as manufacturing, construction, and wholesale distribution, remained operational throughout the crisis.

Just over a week ago Prime Minister Andrew Holness announced that Jamaica’s borders, which were closed to all incoming travellers on March 24 following the COVID-19 outbreak here, will be reopened to international travellers on June 15.

Holness said the reopening will require arriving travellers to undergo mandatory screening at the airports, where a determination will be made if they should be tested.

Local tourism analysts have said that the sector which provides a living for approximately 300,000 people directly and indirectly, and which contributed approximately US$3.7 billion to the economy from 4.3 million arrivals last year has been losing approximately US$15 million daily since the COVID-19 outbreak in March.

Yesterday, Duncan said: “EPOC welcomes the decision to commence the phased opening of the borders and the tourism sector. The fallout from the closure of the borders and the tourism sector has had a significant impact, and we see that in the projections by PIOJ. It has also had a significant impact on the workers who are employed in the industry, and all these areas that are connected to tourism manufacturing, agriculture, restaurants, craft vendors, everyone is affected,” he outlined, pointing to the 32 per cent decline which has been projected for imports, another major area of tourism contribution.

Duncan stressed that about 40 per cent of other sectors, such as agriculture, have been impacted by this fallout.

“So we have to really move forward and open the sector in a very controlled manner,” he stated, noting that it is also expected that restaurants and places of entertainment will be allowed to reopen shortly, with the proper safety protocols.

“EPOC does accept that there are risks to opening the borders but appreciates that it is an imperative to begin to prepare ourselves for the new normal in [the] tourism, travel and aviation industries, so we must prepare ourselves as a country,” he said, arguing that the public health system now has the knowledge and experience to deal with any anticipated increase in the number of COVID-19 cases as a result of the opening up.

“We are moving from a place of total shutdown when a cluster develops, to a place where we can intervene in a cluster… they have the capacity, technology, the knowledge of the virus, and the manpower which have now given us a high degree of confidence in managing the increased risk that we face in opening our borders and our economy,” Duncan asserted.

Meanwhile, he gave the assurance that EPOC will be keeping a close watch on Government’s adherence to the fiscal policy rules, in light of the revised timeline to achieve a debt-to-gross domestic product (GDP) ratio of 60 per cent.

“Jamaica is not alone in making these extensions, but what we can be comfortable with is that we will be holding the Government accountable to hitting that 60 per cent in 2027/28 and the trajectory that takes us there,” Duncan said.

The target was moved from 2025/2026 to 2027/28 following amendments to the Financial Administration and Audit Act and suspension of the fiscal policy rules to reflect same.

This is as a result of the disruption to economic activity from COVID-19, with GDP projected to contract by 5.1 per cent for the 2020/21 fiscal year, which the finance ministry and the Government’s chief planners explain has adversely impacted the fiscal accounts.

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