Senator Don Wehby today (June 25) opened the State of the Nation Debate in the Upper House of Parliament. The following is the first part of excerpts from his presentation. See part II here.

Since the onset of the COVID-19 pandemic, we have seen a major decline in the economies across the world with a ripple effect across all sectors of the Jamaican economy.

• The PIOJ reported that during 2020, real GDP fell by 10.2% 1 GOJ Fiscal Policy Paper FY 20/21 Interim Report October 2020
• All sectors of the economy declined during 2020 Tourism-70%
• Debt to GDP ratio increased
• By July 2020 the rate of unemployment jumped to 12.7% (improved in
October 2020 to 10.7%)

The COVID-19 pandemic is a crisis of proportions that we have never seen before.

The World Health Organization declared the outbreak a Public Health Emergency of International Concern on January 30, 2020, and a pandemic on March 11, 2020.

Worldwide there have been over 180M cases of the virus up to June 24 and unfortunately 3.8M deaths. The International Monetary Fund described the economic fallout from COVID-19 as the worst recession since the Great Depression, and far worse than the Global Financial Crisis.

Jamaica recorded its first case of the virus on March 4, 2020. As at June 24, there have been over 49,000 confirmed cases of coronavirus in Jamaica, and over 1,000 deaths. I pause here to express my condolences to the families who have lost loved ones and encourage those who are currently experiencing the virus – you will overcome.

Every opportunity I get I express my gratitude to the nurses, doctors, other health care workers, sanitation workers, immigration and customs officers, the security forces and all other Jamaicans serving on the frontline. They leave their
families behind each day and risk their life and health to serve their fellow Jamaicans.

We appreciate, love and respect you for the job you are doing for our country. A big thank you.

Vaccination Programme

Vaccinations programmes have been rolled out worldwide including Jamaica, to bring hope for recovery and return to normalcy. I strongly believe that the vaccination programme is important to facilitate a faster recovery. In fact, it is the only way.

As at June 16th approximately five per cent of the population has been fully vaccinated and just under eight per cent have received the first dose. My understanding from Howard Mitchell, chairman of the National Health Fund, is that there will be an influx of COVID-19 vaccines in Jamaica over the next few weeks. This is a very good update amid vaccine shortages in some countries. With this expected increase in availability we must now pull out all the stops to ensure we can administer the vaccines quickly. We have to keep vaccinating in order to achieve herd immunity and return to some level of normalcy.

When I make decisions, I like to review what the experts have said and the science that backs up the data. The major vaccines reduce the risk of contracting the virus some by over 90 per cent. The CDC has said the known and potential benefits of COVID-19 vaccination outweigh the known and potential risks, and even if you do get COVID-19 after being vaccinated you will not get seriously ill.

As an example, just this week, there was a report on an outbreak of the virus at a government building in Florida. Six persons were exposed to the virus and the only one that didn’t get infected was the one who was vaccinated. The five others were hospitalised and two died. So, the educational campaigns have an important role to play with assisting persons to understand the benefits of getting vaccinated in order to make an informed decision. I think it is appropriate to take this opportunity to encourage all of us to get vaccinated.

Management of the Economy

The Government must be commended for its management of the economy during the worst economic contraction in Jamaica’s history. No previous economic decline comes even close. The Managing Director of the IMF commented on Jamaica’s management of the pandemic indicating that, “I highly value Jamaica’s sound economic reforms
and fiscal management in response to the COVID-19 crisis”.

The Government has managed the country well through this pandemic and I have confidence that they will continue to lay the foundation for us to Build Back Stronger.

There have been several initiatives which have cushioned the effect of the pandemic and stimulate economic activity. The Government deployed a J$20-billion CARE Programme, the largest social programme in Jamaica’s history.

Over 500,000 applications were received. In addition, billions were also spent on health expenditures and support of public bodies.

All of this was done without incurring additional debt, despite significant falloff in revenues. Jamaica is one of the few countries worldwide which was able to maintain debt sustainability throughout the pandemic. Jamaicans have worked too hard, public sector workers have made too many sacrifices for us to reverse the gains made to reduce our debt and improve our economic outlook.

Two debt restructuring exercises and wage freeze for public sector workers over the years. Because of the debt restructuring and the lack of resources we have not been able to spend enough on social services such as health, education and crime prevention.

We can never go back there. We cannot borrow our way out of our problems, we must grow our way out.

The IMF remains confident in our ability as a country to maintain our commitment to debt sustainability, including our plans to accelerate debt reduction efforts should growth overperform over the medium term. This is not to be taken lightly. It speaks to our fiscal maturity as a country.

This COVID-19 pandemic has been a testament to the resilience of Jamaicans. The entrepreneurial spirit was ignited during the crisis last year. In 2020, entrepreneurs and investors registered 12,809 business names and 3,935 companies.
This reflects a 12 per cent increase for business names and three per cent for companies over the previous year, 2019, despite the horrible pandemic. Over a quarter of the registrations were done using the Companies Office’s electronic business registration platform.

I want to make special mention of the performance of remittances.

During 2020, Jamaica’s remittance inflows increased by over 20 per cent. Regardless of where they live, one thing I know is, our Diaspora is passionate about and love our country. I thank them for their significant contributions through charities and directly to the agricultural, education and health sectors and community development initiatives.

I encourage the Jamaican Diaspora to continue to invest in Jamaica as the Diaspora represents a reservoir of social and financial capital which must be optimised for national development.