The Jamaican economy appears to be in a recovery phase, with economic indicators showing positive trends. How confident are you of maintaining this trajectory? What could threaten recovery and how will you mitigate against these threats?
We are pleased that Jamaica has started to show strong signs of recovery, including the expansion of 12.9% in GDP in the second quarter of 2021 because of the recovery in both the services and goods-producing industries, as well as the recent announcement of our employment rate being 8.5% as of July 2021.
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The services industry, which includes hotels, restaurants and transport, increased by 14.01%, and the goods-producing industries – notably construction, agriculture and manufacturing – grew by 7.8%.
These are excellent developments, and we are optimistic that we will continue to see recovery in these and other sectors as persons and businesses adapt to living with Covid-19, and as we strengthen our vaccination drive.
The government’s planning agency, the Planning Institute of Jamaica, has now revised its growth outlook for the rest of fiscal year 2021/22, from 4–8% suggested at the start of the year to 6–10%.
With that said, I think if the world has learned anything from this crisis, it is to expect the unexpected. We are still in a pandemic and we must protect the gains we have, as well as prepare for any future fallout that can come from threats like new variants of the virus or from supply chain challenges [this interview was conducted before the Omicron variant was known about].
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By GlobalDataThis is where Jamaica’s Building Back Better strategy comes into play. Our aim is not just to recover from the pandemic – we want to put Jamaica in a better position than it was in before. This means focusing on investment in sustainable projects that seek to not only generate revenue but will also help to develop Jamaica as we work towards Vision 2030, the national development plan. It also means increased diversification in key sectors such as digital services/outsourcing, agribusiness, logistics/special economic zones, renewable energy, and manufacturing, and strengthening these sectors.
How did the government of Jamaica support and assist foreign investors during this period of crisis? Were any new incentives introduced?
Supporting local and international investors is a major priority for the government and is part of our overall economic development strategy. This support includes facilitating projects through agencies such as Jampro, giving investors assistance with the investment process, creating viable opportunities for investors and improving our business environment.
We have continued to emphasise these things during the crisis and Jampro’s advocacy efforts were significantly intensified during the past 18 months to ensure that all interested investors were facilitated. The organisation used the downtime in construction and operations to work with investors to get critical business and development approvals in place to allow these investments to happen quickly.
No new fiscal incentives were offered during the pandemic, but the country continued to support investors through our existing cadre of incentives, including the special economic zone regime, the productive input relief programmes for specific sectors and, of course, our general incentives available to all investors through the Fiscal Incentives Act.
How did Jamaica’s long-running efforts towards economic diversification help sustain the country at a time when tourism was shut down?
This crisis made it even more apparent that Jamaica must diversify its economy, by strengthening and expanding in the key sectors that I mentioned before. We saw the decline in tourism and it was therefore critical to implement initiatives to protect that sector. It was also important that Jamaica’s other sectors received support to continue to grow in the period. For example, the government targeted agriculture and manufacturing by reducing regulatory fees to increase production and encourage the growing of food locally. With the disruption of shipping and the logistics sector, food security was a priority.
Manufacturing also saw some diversification. For the outsourcing industry, we made the necessary decisions to secure it and minimise disruptions in services by enabling a work-from-home solution. This led to a 15% increase in employment in the sector, despite the economic fallout resulting from the pandemic.
Now that things are moving in a positive direction, we will capitalise on what we learned in the past year and turn challenges into opportunities. This has only confirmed the potential that Jamaica must be a fully developed, diverse economy that can endure international and local shocks that may arise. We will continue our diversification agenda but with more urgency.
