Like most well-thinking Jamaicans, I am pleased to see our containing of the spread of COVID-19 that has prompted acclaim from, firstly, Tedros Adhanom Ghebreyesus, the director general of the World Health Organization (WHO) on March 16, 2020, and, secondly, our being named among 20 nations which are considered to be ‘Beating COVID-19’ by American scientist and founding president of the New England Complex Systems Institute (NECSI) Professor Yaneer Bar-Yam. Be that as it may, the past is in the rear-view mirror, and it behoves us all to learn from it whilst continuing to take precautions.

Still, continued containment will require a collective effort with all hands on deck.

Prior to the outlining of the estimated economic impact of COVID-19 I was of the view that containment in the early stages of the disease in the island did not warrant complete closure of the economy. Whilst history has absolved the bearers of that view, it is helpful the review to reasoning.

Legitimacy of the concerns aside, many of the calls from various sectors betrayed insufficient grasping of the likely implications of such action. The five per cent to 8.6 per cent devaluation of the Jamaican dollar in relation to the US dollar since the date of the first COVID-19 case on March 10, 2020 is a supply-driven harbinger of economic challenges.

The US-dollar shortfall in the range of US$30 million per week (according to the governor of the Bank of Jamaica) is the result of Jamaica’s border closure and, specifically, the shutting of the tourism industry that is the dominant source of foreign exchange inflows. A 10 per cent to 15 per cent fall in remittances was a secondary contributor that has been acknowledged. Local US-dollar demand, however, is fixed, as most of our manufacturers source raw materials from overseas suppliers who are paid in foreign currency. Time will tell whether a return of foreign exchange inflows will cause a reversal of the devaluation. Fair money is that it will create an impact.

Further, a shutdown of the economy would not have been efficacious when one considers the classification of essential workers. Some 60 per cent plus of our manufacturing sector are participants in the food and agricultural space, both of which were considered essential. Additionally, when one considers the significant number of people employed by the ports and financial institutions, who are also essential, it seems a fair number of individuals would have been traversing to and from their place of employment, thus defeating the intention of widespread limited movement.

Lastly, when one considers several of our Caribbean neighbours and recalls that at least one reduced civil servant salary payments (in cash) by 50 per cent, the potential reality became even more untenable. Thankfully, the Jamaican Government took these likely outcomes into account when deciding to allow the wheels of industry to continue turning and in announcing the measured loosening of the restrictions this week.

Thankfully, the revelation of the estimated COVID-19 cost of US$800 million ($120 billion) by Finance Minister Dr Nigel Clarke on Thursday, May 13, 2020 was dreadful enough to awaken many from their proverbial slumber.

Having adequately considered the past, we would do well to ensure that the same mistakes are not repeated. It would serve all well for financial experts such as the finance minister, noted economists, and the like, to lead and provide insight into the financial realities before us. Already, we are seeing misinterpretations abound.

An example of one is that the minister of finance has provided estimates (emphasis added), so the $120-billion cost is not yet a fait accompli. It may very well end up that our debt-to-GDP (gross domestic product) is at the projected 98 per cent on March 31, 2021, or it may be lower. The possibility also exists that it could be higher. This matter of estimated vs actual is an important distinction. There are others.

Shifting gears to solutions, an anecdotal and empirical review of the landscape suggests that there is some measure of liquidity in the established demographic of the private sector juxtaposed with public sector budgetary constraints resulting from budget cuts. This will also be matched by a possible temporary curtailing in foreign direct investments (FDI). It therefore seems likely that one can reasonably expect limited government payouts of local debt, more rollovers, and reduced liquidity in the markets.

Within crisis, however, there are opportunities, and it seems there is an opportunity for private sector investment to lead the way in the completion of existing projects and, more importantly, the beginning of new ones. Infrastructure-driven public-private partnerships (PPPs) would be worth fast-tracking in this environment, especially where the public aspect requires injections of fixed assets, such as land, rather than cash injections. Two projects related to water supply come to mind readily.

While this will be a trying time for all concerned, with accurate information, PPPs, and due consideration for the vulnerable, we will be better off in the end.

Ryan Strachan is a stockbroker, president of Generation 2000, and a director of Urban Development Corporation. omments to the Jamaica Observer or ryanstrachan@generation2000.org.