In an excellent series of articles in the Sunday Gleaner over the past three weeks, Finance Minister Dr Nigel Clarke summarised the core recommendations of his “Rebuild Jamaica” COVID-19 Economic Recovery Task Force Report. The first article was about the importance of maintaining macroeconomic stability, while addressing structural bottlenecks that impede growth. The second — and in my view the most interesting — addressed the need for economic formalisation, strengthening the social safety net, and digitising public and private sector services. The final article addressed various measures to help the private sector drive growth, including public-private partnerships in infrastructure and the Government helping to catalyse private sector equity vehicles, including notably a first loss provision “if conditions allow” for those companies needing recapitalising due to the effect of the pandemic. Notable other suggestions included a “transparent” land bank for the purchase, sale, lease, and other land related transactions with the Government, and the long-awaited national business portal for business-to-government transactions. Other areas included financial deepening and inclusion and the need for economic diversification.

It is therefore highly commendable that Private Sector Organisation of Jamaica (PSOJ) President Keith Duncan is today holding their annual economic conference online under the title ‘Crossing the Charm: The Road to Economic Recovery’.

Duncan explicitly cites the collaboration of COVID-19 Economic Recovery Task Force in driving their digital conference as it brings together thought leaders to consider the critical questions and the way forward.

“Notwithstanding the positive signs, we are by no means out of the woods, as tourism, while being opened, faces great challenges, and this impacts all sectors that have linkages to this anchor sector. This will create significant challenges to our business community and those employed directly or indirectly to this sector. The SME [small and medium-sized enterprises] sector is most vulnerable to the economic contraction and we at the PSOJ remain committed to advocating, creating solutions and strategies and ensuring that they are engaged to give this sector the best opportunity to pivot and grab the opportunities. It is particularly critical that, as best as possible, our SMEs remain resilient through this unparalleled period in Jamaica’s history,” he said.

According to Nevada Powe, chief project architect of the PSOJ’s Access to Finance Facilitation Panel (AFFP), this digital conference is the first of its kind anywhere in the world. Duncan adds that the discussions are to provide critical input on how best to align the various stakeholders on a national economic strategy to cross the chasm between March 2020 and a robust economic recovery on the other side.

Other speakers at the conference include the Inter-American Development Bank’s (IDB) Henry Mooney, Bank of Jamaica Governor Richard Byles, Jamaica Manufacturers and Exporters Association (JMEA) President Richard Pandohie, and Nicola Madden-Greig representing the Caribbean Hotel and Tourist Association (CHTA) respectively, as well as National Commercial Bank Chairman Michael Lee-Chin as part of a very welcome section ‘The road to a new economy’, and many others.

In short, many, if not most of the topics mentioned in the ‘Rebuild Jamaica’ COVID -19 Economic Recovery Task Force Report are addressed.

In his second article, Finance Minister Clarke specifically mentions the Baltics — Latvia, Lithuania and Estonia (For more on Estonia specifically see my Jamaica Observer interview with the IDB’s Therese Turner-Jones, who has encouraged study groups from the region to go there) — as having made great strides in reducing the size of government and increasing their overall productivity, economic competitiveness, and resilience by embracing digitisation in their everyday life. In particular, he correctly argues that a robust and secure national identification system (NIDS) is crucial to improving the delivery of government services, particularly social and welfare, as well as facilitating much greater financial inclusion by making the satisfaction of ‘Know Your Customer’. If combined with a digital payment platform, as proven in other countries, this would also help the expansion of SMEs and increase formalisation.

Indeed, Minister Clarke now seems particularly sensitised to the issue after his experience in trying to enable access for the ‘informal’ to the special government assistance programmes required by COVID. He notes that the Bank of Jamaica is working on a “national payment switch”, a digital platform which offers the prospect of greater inclusion of Jamaicans in the financial system, offering transformative, seamless payment options while lowering transaction costs.

The main emphasis of his second article, rightly in my view, is on the need to formalise the informal sector. He notes that approximately 60 per cent of the January 2020 employment of 1.269 million is informal — the shocking statistic is that only approximately 500,000 out of that number are active contributors to the National Insurance Scheme (NIS). He, again rightly, seems particularly concerned about the plight of those who work around the home informally, where, according to the Statistical Institute of Jamaica (STATIN) data, a staggering more than 90 per cent are informally employed. He suggests later on moving to a single statutory consolidated deduction, rather than being calculated on four different bases as currently occurs, and that for some groups, like domestic workers, they could pay into it just once per year. Other key groups are not much better, with Clarke noting that more than 80 per cent of those in construction, 60 per cent of those in wholesale or retail, and more than 50 per cent of those who work in transportation being informally employed.

This disgraceful state of affairs is a future old-age crisis in the making when most of the population is not even part of the main State pension system — never mind having private sector provision. Elsewhere he notes that in his last budget this way why he had introduced a “social pension” to address this gap, but that the true solution is to increase the coverage of the NIS.

Keith Collister is the longest-continuous serving member of the Private Sector Organisation of Jamaica’s Economic Policy Committee.