Eight days ago, Jamaica confirmed its first COVID-19 case. This was inevitable as the world has been dealing with the virus since mid- November, when the first case was reported in China. It has taken some three months to get to Jamaica, and during that time it is obvious that the Ministry of Health and Wellness, and the Government, under the watchful eyes of Minister Tufton and PM Holness, have been preparing for the role they are playing.

I think all would agree that the Government has been doing a good job, given the resources we have. When I watch international news and then watch TVJ or CVM, I am heartened by the management of the Government and the responsible actions being displayed by Jamaicans.

Decisive and responsible action is of course very important to prevent the spread of the virus, as we have learned from countries like Italy, which simply took too long to act, and at the other end South Korea, which attacked the threat swiftly in a very targeted and strategic manner.

But even if we are able to start seeing the decline of the virus here, within the next month I think, life and the economy will not be the same after.

That is because even after we have arrested the infections, the fact is that our recovery will be dependent on the global economy, and in particular the US and UK markets, who both, in my view, did not decisively start to deal with the virus when it was first identified.

The first case Jamaica had was eight days ago and since then the Government has been very transparent in acknowledging the problem, quarantined people and monitored others, quarantined the Bull Bay area, and closed down bars and restaurants and banned gatherings of more than 20 people.

In addition, Jamaicans have been taking this seriously as seen in their actions. I think we need to shut down the borders, for movement of people, for the next two weeks also.

Let’s say though that we start to see a decline in three weeks and we manage to eliminate the virus, the economic challenges will still be there. In my view, the situation in the US, UK, and Canada (largest markets) will get worse. They will have cities locked down and productivity and income levels will decline in those markets. This will significantly affect our tourism and remittance earnings.

The irony is that there is nothing that we will be able to do to increase FX earnings, in the short term. So, we may be looking at tourism and remittance earnings declining 70 or 80 per cent, amounting to US$3.5-billion decline in inflows.

This means that the tourism sector will see significant decline, where workers will be laid off. The estimate carried in the news is that 200,000 people could lose their jobs.

In addition to the FX loss from tourism and remittances, exports will no doubt be affected, especially if US job losses result in anywhere near the estimated upper end of 20 per cent unemployment.

This means that we could see more than US$4 billion in FX inflows gone in the short term.

We can, however, limit the fall-out if we reduce the dependency on imports, such as oil and food. More specifically, we have to consider changing economic behaviour, primarily through fiscal initiatives, as monetary policy will not have any impact.

So what are some of the fiscal policy initiatives we can employ?

Firstly, we should ensure we properly fund a formal public transport system like the JUTC. The fact is that economic activity is elevated when we can move people around efficiently, and at an affordable cost. People need transportation to go to work or to visit restaurants and other places of entertainment. Currently, because we don’t have an efficient public transport system, many people acquire motor vehicles as a necessity.

If you think about it the largest import we have is oil, coming in at around US$2.5 billion annually. If we are able to put a proper transport system in place (not one like the current taxi operators who break every law they can), then we can reduce the import bill significantly, as transportation uses 30 per cent of the oil import bill and we could reduce car and car parts imports.

Let’s say we can realise savings of half of the 30 per cent of the total bill, that would mean savings of US$375 million per annum on oil imports and then we would see a reduction in motor vehicles and parts.

Another 30 per cent of oil imports is used for electricity generation. Shouldn’t we be looking more at renewable energy and specifically companies like Wigton — that has had a very successful IPO and broad-based ownership — to provide this alternative to oil (I am a director and shareholder of Wigton to declare interest). We could maybe target savings of around 30 per cent in our oil bill from this, and save around US$330 million per annum.

We also need to target food production, as given what is happening globally food supply may be a problem from imports. In any event we currently import around US$1 billion annually in food. If we target food production, as a substitute, and use policies such as lower GCT on local food then we can target maybe another US$400 million.

Between these three we already see just over US$1 billion in savings, just from changing our behaviour. It is initiatives like this that we have to look at, via fiscal policy to drive better economic fortunes.

The point is that post-COVID-19 (hopefully people are disciplined enough to follow the health guidelines) things will be different. We will lose a significant portion of our FX earnings and we will need to change our consumption patterns in order to avoid a significant decline in the economy.

This means fiscal policy must support this change and the public sector bureaucracy needs to ensure it is efficient in order to drive this change. People must be retrained for the new jobs that are created, as many of the old ones will go.

In the end it comes down to how long it takes for us to get over the virus, and that comes down to personal responsibility, as we can’t do what we have always done and say the Government must fix it.

Dennis Chung is the author of Charting Jamaica’s Economic and Social Development AND Achieving Life’s Equilibrium. His blog is dcjottings.blogspot.com. Email: drachung@gmail.com