Sandy’s double trouble for the economy

Thursday, November 01, 2012

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HURRICANE Sandy represents double trouble for the already struggling economy of Jamaica based on the extensive damage it has caused, even though most of the island was not severely hit.

Early estimates put the damage from the hurricane in the region of $5 billion overall; with damage to infrastructure at an estimated $2.6 billion; schools at $170 million and health facilities at $160 million. The damage to the country's agricultural sector is estimated at close to $1.5 billion. Approximately 31,000 farmers and 3,000 hectares of crops across the island have been affected by the hurricane.

This is money that the country does not have at this time, despite the brave face that Prime Minister Portia Simpson Miller is putting on it. We note that the Government has promised a mere $200 million in aid in one form or another.

Regrettably, assistance from foreign governments, international organisations and our diaspora, while invaluable, is not likely to cover all of what we will need.

The agriculture setback is especially troubling because of its adverse impact on domestic food supply and the income of farmers particularly in St Mary, Portland and St Thomas. Banana, plantain, coffee, vegetable crops and fruit trees have been damaged and it will take months and even years for new plantings to come to fruition.

Sandy has also hit Jamaica in another way because of the enormous damage it has inflicted on the north-eastern coast of the United States of America, especially to New York, New Jersey, Delaware and North Carolina. Sandy killed nearly 50 people, deprived seven million of electricity and caused over US$20 billion in damage.

This will hurt Jamaica through reduced tourist arrivals and expenditure and the reduced ability of Jamaicans in that part of the US to assist Jamaica in repairing, rebuilding and replanting.

While there was minimal damage to the tourist plant, Sandy has adversely affected the area from which Jamaica gets most of its tourists. The immediate adverse effect was the disruption in airline flights out of New York, Philadelphia, Newark and Baltimore resulting in cancellations and refunds. More than 15,000 flights were grounded, with the two main international airports, JFK New York and Newark, New Jersey closed.

There are bound to be other cancellations in November, particularly around Thanksgiving and Christmas as people adjust to and cope with the damage. This is a great pity since the prior bookings had indicated an outstanding 2012/13 tourist season.

Many Jamaicans here have suffered damage to their homes and business premises and several among the poor have had their habitations destroyed with no insurance to assist in rebuilding. They in normal times could rely on relatives and friends to send increased remittances and relief in kind from Jamaicans in America, most of whom live and work on the eastern coast of the US.

They, too, will have suffered some damage and setbacks and hence will be less able to respond to the urgent needs of their homeland.

Sandy was a double whammy for Jamaica but we know that when the going gets tough the tough get going. Jamaicans are a tough people and this, too, will pass.




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