The COVID-19 pandemic has seen a contraction of the Jamaican economy with many people losing their jobs. This has led to more Jamaicans forming their own companies and turning to entrepreneurship.

Making his opening presentation in the 2021-2022 Budget Debate in Parliament yesterday, Minister of Finance and the Public Service Dr Nigel Clarke said the Planning Institute of Jamaica (PIOJ) expects the economy to contract by approximately 12 per cent this fiscal year ending March 31, 2021.

The finance minister made it clear that the pandemic has brought on the worst economic downturn in Jamaica’s history.

But this crisis has also brought opportunities with enterprising Jamaicans now forming their own companies and making the transition from employee to employer.

Many are not prepared to be tossed upon the heap of desperation and despair, left to face an uncertain future.

Clarke noted this positive approach and drew attention to it.

“In the biggest economic crisis in nearly 80 years where the economy declined in a way no Jamaican has ever experienced before now, we had the largest number of new company registrations and new business registrations in our history,” he said.

“Between 2014 and 2019 the new company and new business registrations had consistently increased each year with the steadily improving economic and business climate.

“The number of new companies for each month in 2020-21 was greater than the number of new company formations in the corresponding month of the previous year with the exception of April when we were in lockdown.

“And, in total, despite the pandemic, more new companies and more new businesses were registered than the previous year and more than at any time in our history.”

He stressed that, though commendable, this is not an indicator of current economic activity but rather an indicator of intentions and possibilities.

For years it has been said that 40 per cent of Jamaica’s  business activity comes from the underground economy. Clarke has long championed Jamaicans formalising their ventures and entering the legitimate world of business enterprise. This now signals a move in that direction.

“Our policies of abolishing Minimum Business Tax and abolishing the Asset Tax and going in the opposite direction of providing a Tax Credit to micro and small businesses and providing benefits to registered entities is increasing formalisation and strengthening the institutional fabric of our country,” declared the finance minister.

Placing context on this move to start legitimate businesses and becoming one’s own boss, Clarke pointed out that it took four years between 2016 and 2020 for the Jamaican economy to add 100,000 jobs to the Jamaican economy and in the first four months of the COVID-19 pandemic more than 130,000 jobs were lost.

“The Jamaicans who lost jobs in the pandemic could fill every seat in the national stadium four times over. That is, it would take four national stadia to seat every one of the COVID-19 unemployed. When we talk about economic recovery, we are talking about eventually getting every single one of those Jamaicans back in a job. That is our goal and our mission,” said Clarke.

In October 2019, Jamaica experienced the lowest level of unemployment in its history of 7.2 per cent. At the start of 2020, it moved ever so slightly to 7.3 per cent but, with the pandemic taking hold, by July 2020, the unemployment rate jumped to 12.7 per cent.

“The good news is that the unemployment rate has improved and as of October 2020 it was 10.7 per cent. It is still way too high, but we are headed in the right direction,” said Clarke.