EPOC confident Jamaica will recover next fiscal yearWednesday, June 10, 2020
BY DURRANT PATE
The Economic Programme Oversight Committee (EPOC) is painting a positive outlook for the Jamaican economy next year, having weathered the current COVID-19 pandemic.
In its latest review of the Government's macro-fiscal programme for the fiscal year 2020/21 and over the medium term, EPOC expressed that while the road to recovery will be difficult, Jamaica should return to a path of growth during the next fiscal year.
Speaking at a virtual press conference on Monday last (June 8), EPOC's chairman, Keith Duncan, declared, “we believe that Jamaica has an accommodative monetary policy, sufficient liquidity, adequate international reserves and fiscal buffers that will see us through this challenging current fiscal year and should see Jamaica returning to a growth path in 2021/22.”
Duncan highlighted that through prudent and well-structured economic reform efforts; Jamaica has achieved macroeconomic stability over the past seven years, which has given the economy a foundation to execute Jamaica's recovery path. The Government projects that the economy will contract by 5.1 per cent in FY2020/21 but is expected to return to pre-COVID levels in FY2022/23.
This assessment was supported by the EPOC chair, who contended that moving forward, Jamaica needs to address once and for all some of the structural issues, which have caused the economy not to see any meaningful growth but anemic growth over the past few years. He emphasised that these structural issues have caused four in five not to achieve its much-heralded expectations.
For Duncan, the structural issues found in all sectors of the economy have prevented Jamaica from “enhancing its productivity on the digital side, the agricultural side, the infrastructure side, and the water side”.
The EPOC chairman said the areas that needed to be worked on are Internet penetration, broadband — “all of these areas KYC (know your customer), access to finance…that will move us out of this anaemic growth area.”
He argued the problem in Jamaica is not only structural but also based on equity and other issues such as increasing productivity, which has been a perennial problem. “Productivity has declined over the last 30 years, and our citizens have not become any more wealthier than they were 20-30 years ago,” Duncan observed.
Continuing, Duncan, who is also president of the powerful private sector lobby group, the Private Sector Organisation of Jamaica, declared that the focus now needs to be on the new economy—what does that look like— it's not business as usual.
He spoke about the formation of the COVID-19 Economic Recovery Task Force, which was set up to minimise the extent of the expected economic fallout and to ensure a safe and phased recovery of the economy. The task force is chaired by Minister of Finance Dr Nigel Clarke.
The various subcommittees of the task force have been submitting their reports with recommendations. The subcommittees are on Tourism & Aviation; Agriculture; Global Services; Local Services; Construction & Infrastructure; Manufacturing; COVID-19 Resilient Jamaica; New Economy; and Macro-Fiscal.
COVID ECONOMIC RECOVERY TASK FORCE SUBCOMMITTEES
These subcommittees were first charged with developing solutions geared towards the phased, structured, and controlled reopening of businesses and, secondly, developing proposals for all the sectors to ensure that growth levels for the year 2021/22 may significantly rebound with greater productivity and higher growth levels.
In concluding, the EPOC chairman disclosed that “recommendations have been coming in from the various committees. They are looking forward to the ministry of financing, compiling that report, and releasing in the next two weeks.”
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