Tourism revival needed to protect Net International Reserves — EPOC
The Economic Programme Oversight Committee (EPOC) is banking on a turnaround in the tourism industry to protect Jamaica's Net International Reserves (NIR), which dwindled in the last quarter, due to the impact of the coronavirus (COVID-19).
According to Keith Duncan, co-chair of EPOC, the financial year started with the NIR being US$3.24 billion but, on September 7, the reserves reduced to US$2.65 billion, with a year-end projection of US$2.47 billion.
Duncan, who was speaking last Friday at a virtual press conference to provide an update GOJ’s Economic Reform Programme, said that with only approximately US$200 million available to the Government of Jamaica (GOJ) for discretionary shortfall use, the stimulant from tourism is needed.
“The recovery of tourism will be critical for us in terms of earning foreign exchange so that we can minimise our call on our Net International Reserves going forward,” Duncan said.
He noted also that tourism earnings were critical despite an increase in net remittances, which was up of 20.l9 per cent over the April to June quarter last year.
Duncan is, however, sceptical that the GOJ will have to draw from the NIR in the manner it did during the last quarter, when Jamaicans were offered COVID-19 assistance through grants and relief packages, as a coping mechanism.
Co-chair of the Economic Overisight Committee (EPOC), Keith Duncan
According to Duncan, the GOJ and tourism sector will have to aggressively market Jamaica as a safe destination, to ensure a bumper winter tourist season, which runs from December to April.
This Duncan reasoned, will be effective in the revival, since the island has had minimal transmission in the hotels, since the government reopened the borders to tourists on June 15,
“The GOJ and the tourism sector, they have done a really good job in creating that safe corridor and we have to ensure that we build on that, the protocols are being observed and there have been minimal or no cases of transmission within the hotels,” the EPOC co-chair said.
“So, therefore, we have to effectively market this as a safe corridor for our country so we can get the necessary forward bookings and give ourselves the best chance to be ready for the winter season,” Duncan said.
Meanwhile, According to Duncan, there was a downturn of 98 per cent for both tourist arrivals and expenditure between April and June. The island only had 7,188 arrivals with a spend of US$16.2 million, all coming after the borders were opened.
Tourism arrivals improved significantly in July and August with 85,000, but that was still an 87 per cent decrease of the same period last year when over 600,000 tourists each month visited the island. Duncan said the projection is that the local industry will continue to grow for the winter season.
“A key imperative is, to put in place measures to support a relatively buoyant winter season, with increase tourists arrivals and expenditure, Duncan said. “So we are going to have to work with tourism interests and the Ministry of Tourism. We are going to have to drive the marketing to ensure that we can get tourism, tourist arrivals up through that winter period so that we can look to ensure that we hit our monetary and fiscal targets."