Biden's vaccine plan raises recovery hopes for Jamaican Gov'tThursday, March 04, 2021
BY BALFORD HENRY
NEW United States President Joseph Biden's plans to secure delivery of enough coronavirus vaccines for all Americans by May got the thumbs up yesterday in Parliament, as a positive for the ailing Jamaican economy.
Minister of Finance and the Public Service Dr Nigel Clarke saw the move as an upside risk for the Government, as he launched a “risky” 2021/22 budget, which he is confident will come through for the cash-strapped Government with the help of actions like Biden's.
Clarke admitted, as he addressed the Standing Finance Committee of the House of Representatives which is reviewing the Estimates of Expenditure at Gordon House, that there are risks for the projections in the 2021/22 new budget, but argued that there are both upside and downside risks and Biden's announcement would have an upside effect on the economic risks.
“Just yesterday (Tuesday) President Biden announced that by May there will be sufficient vaccines in the US to vaccine all of the population. That's an upside risk there, because what it means is that, potentially, we could have more tourists interested in Caribbean destinations sooner than we would otherwise have thought,” Dr Clarke said.
“I agree that the news out of the US is absolutely positive for us. [But] I think the concern I would have is when you look at the Caribbean region and see we are the last out of the box in terms of getting out vaccination programme,” Opposition spokesman on finance Julian Robinson said in reaction.
“So, while I think there are tourists who will look at the region, they may choose to go to other countries which have begun a vaccine programme prior to us, because they feel safer there,” the Opposition member added.
Biden said Tuesday that the US expects to take delivery of enough coronavirus vaccines for adult Americans by the end of May, two months earlier than anticipated, as he urged states to get at least one shot into the arms of teachers by the end of March to hasten reopening of schools.
Clarke also stated that, in terms of the issue of projections on rising oil prices, it is another risk facing the country. But, he ignored suggestions from the Opposition for a hedge fund. He suggested that huge bumps in oil price are often triggered by war, but it is also likely when global economic activities start picking up and people start travelling, again.
“Yes, global economic activities could start increasing faster than projected, then maybe oil prices will increase higher than we projected. But, the other side of that would be the pressure on our balance of payments, through the current account, and if that is to materialise faster than our recovery, then it could exacerbate the situation.
However, Dr Clarke said that the “good news” was that, so far, local resources have been adequate and sufficient to withstand the social and economic pressures. He also noted that the country has access to a maximum of US$500 million in drawdown from the International Monetary Fund (IMF), while the global economy is picking up and other sources of foreign exchange become available.
He urged the Opposition to bear in mind, too, that the new estimates were not yet in effect, and there were still some two weeks to go before the end of the current fiscal year which lasts for 12 months, starting April 1.
“Make no mistake about it, we are making projections and making budgets in a time of great uncertainty. There are a lot of variables that we are not in control of, for example, how the disease evolves internationally, the variants and so forth. So there is a risk, and that risk informs the approach that we are taking,” the minister said.
He said that the Government is protecting inflation of about five per cent, and real economic growth at the same level. He said that this is achievable, provided that the roll-out of the vaccines can cover the vulnerable population in the time frame that is envisaged.
He officially informed the House the new estimates are designed to ameliorate the pressures on the health system, which is mainly affected by hospitalisation problems currently, because of the fixed capacity in terms of physical space and human resources.
Responding, Robinson said that, while economic fallout and inequality were not new to the Jamaican economy, the Opposition was concerned that the budget would not adequately address the current fallout and the rising inequality that have arisen since the onset of COVID-19.
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