While supporting the thrust of the various measures announced in the Government’s CARE programme, it must be acknowledged that they total a mere $10.65 billion, or about 0.5% of GDP. Other countries have recognized that to protect their economies and societies from lasting damage and improve the prospects of recovery after the health crisis subsides, public resources in amounts which are many multiples of 0.5% of GDP must be expended.
The Governor of the Bank of Jamaica has initially projected a 3% contraction in GDP. The Inter-American Development Bank’s analysis of the economic shock from the Coronavirus crisis to tourism in Caribbean countries, projects that, depending on the duration of the crisis, the direct and indirect impact of the downturn in Jamaica’s tourism industry alone could result in economic contraction closer to 6% of GDP, and this is without factoring in the layering effects of reduced remittances, falling bauxite/alumina exports and overall reduced domestic spending.
Golding, an attorney and former investment banker, said – “Jamaica has moved rapidly into a completely new paradigm, and the former fiscal targets must be put to one side so that adequate resources are found to tackle this existential crisis head on. The Government must be willing to take a courageous fiscal stance and fund a comprehensive safety net to protect our society from unravelling and our economy from lasting damage, so that Jamaica can emerge from the crisis as well positioned as possible to resume sustainable growth and development.”
The MP for South St. Andrew, which includes communities such as Trench Town, Jones Town, Admiral Town and Rose Town, further noted that – “Jamaica’s informal economy, which exists largely among lower income groups, comprises over 40% of the national economy, so the $1 billion allocated for informal business operators is woefully inadequate.”
Mr. Golding continued – “The design of the announced CARE programme, with its emphasis on bureaucratic verification of the eligibility of beneficiaries, builds gaps into the safety net, leaving many vulnerable Jamaicans exposed and unprotected. These informal business persons, such as many of the 10,000 bar owners who have been shut down without any prior notice in the interests of public safety, cannot comply with the verification procedures which have been made a hurdle for accessing benefits. Creative and flexible ways of including them must be put in place, as a matter of urgency.”
He is also repeating the PNP’s call for a $50,000 per family grant for PATH beneficiaries, an increase in the CDF welfare allocation to $5 million per month per constituency for the duration of the crisis, to protect needy persons who will not be able to access the other elements of the CARE programme. Mr. Golding is also calling for:
- a moratorium on student loan payments to the Student Loan Bureau for the duration of the crisis, as has already been announced for NHT borrowers;
- measures to support Jamaica’s small farmers, who are badly impacted by the demise of the tourism industry and should be facilitated to feed the society and reduce the country’s food import bill; and
- A special upfront grant of $15,000 for NIS pensioners, to supplement their normal pension benefit and assist them to survive this crisis.
Overall, the Shadow Minister of Finance & Planning is calling for a substantially larger fiscal programme to be put in place to fund a comprehensive programme, which must include at least an additional $5 billion of upfront support for the informal sector.
Mr. Golding ended – “Unless the safety net is significantly expanded in a comprehensive programme to protect economically vulnerable Jamaicans, life will quickly become unbearable for large segments of the population. The social unrest and resulting economic damage that will follow may well be far worse than the temporary fiscal readjustment required to manage the crisis. Jamaica has earned a position of good standing with our multilateral partners, and we are confident that if Jamaica designs a comprehensive programme to tackle this crisis, they will be willing to provide whatever additional support may be required to supplement domestic resources to fund it.”
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- Countries: Jamaica