Saturday 4 July, 2020

Jamaica has no choice but to remain open - Clarke

Minister of Finance and Public Service, Dr Nigel Clarke.

Minister of Finance and Public Service, Dr Nigel Clarke.

Minister of Finance and the Public Service Dr Nigel Clarke says Jamaicans who are conflicted about the island reopening its economy, before the coronavirus (COVID-19) is completely contained, should understand the consequences of doing otherwise.

Growing economic dislocation could affect the livelihood and lives of thousands, Clarke outlined in an interview with Loop News.

For the hotel sector, he noted, “Economic output that took a generation to build is projected to be erased in a single quarter.”

“It is estimated that tens of thousands of employees in this sector have been laid off and are experiencing a loss of their incomes,” Clarke told Loop News.

“The income of tens of thousands more have been indirectly impacted. These Jamaicans have fixed obligations for mortgage, rent, electricity, healthcare and food and their interests have to be also considered.”

The aim of reopening, he indicates, is to revive employment and economic activity, which has been significantly affected by the spread of COVID-19.

Jamaica first started reopening on June 1, with the government adjusted its work from home orders, permitting persons with no underlying conditions, to return to work.

The government later reopened Jamaica's borders to international travel on June 15. Curfew hours have also been adjusted to allow normal operational hours for most businesses.

Despite these measures, economic contraction will continue to be seen for a while.

The Planning Institute of Jamaica (PIOJ) forecasts GDP contraction of 12 to 14 per cent for the quarter ending June 2020, Clarke outlined.

“This is largely influenced by a forecasted decline in output in the hotels and restaurants sector of 85 per cent for the June quarter.  These seismic levels of economic decline are unprecedented in Jamaica’s history and pose a grave threat to the Jamaican society.”

Clarke said it took approximately 22 years, between 1997 and 2019, for economic output of the hotels and restaurants sector to expand by 87 per cent.

“Economic output that took a generation to build is projected to be erased in a single quarter,” he stated.

He noted that the collapse in economic activity in the hotels and restaurants sector has led to a dramatic decline in employment with thousands still out of work.

“This is the most significant economic crisis that Jamaica has faced since independence," Clarke commented.

He added: “Recovery will take time, but must begin now.”

The Minister of Finance said that the reopening of hotels, with protocols and parameters that assure the health and safety of the tourism worker, is in the national economic interest, and will contribute to the recovery being hoped for.

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