The impact of COVID-19 on poverty in Jamaica has been immense since the pandemic began in 2020. Jamaica has always been a popular vacation destination for people to enjoy the sun, beaches and culture. In fact, according to the World Bank, the country’s yearly tourism numbers reached 4.2 million in 2019, twice the numbers from two decades before. However, since COVID-19 struck the world, the country’s tourism industry fell downward as fewer persons could travel to Jamaica.
Businesses, such as eateries and resorts, have experienced a significant decline in business. As a result, 50,000 Jamaicans working in tourism lost their jobs, illustrating the substantial impact of COVID-19 on poverty in Jamaica. Thus, many persons that finally overcame poverty will most likely face this reality again. Before COVID-19, the World Bank’s graph depicted Jamaica’s poverty rate at around 19% in 2018 and 2019; however, it increased to about 23% in 2020.
COVID-19 Effects on Working Women
According to the World Bank, like other nations, the impact of COVID-19 on poverty in Jamaica has had a tremendous effect on working women. About 78% of healthcare and humanitarian employees and 55% of staff in industries highly susceptible to COVID-19, such as commerce, resorts, restaurants and schooling, are women.
The Inter-American Development Bank stated that women have always had lower-income and less stable employment than men in Jamaica. Now, females are suffering more than males once again, because of higher unemployment rates and business closures. Also, the need for free healthcare has risen due to school closures and households staying indoors. In addition, with less money, more single mothers are unable to purchase sufficient meals compared to males.
How COVID-19 has Impacted Jamaica’s Economy
The Inter-American Development Bank stated that before the pandemic, it expected GDP for FY2020/21 to increase by 1.1% due to more tourist visits and sales of products like bauxite. However, the impact of COVID-19 on poverty has changed this scenario.
Also, the International Monetary Fund projected Jamaica’s economy to decline by more than 5% in 2020. It also forecasts government income to continue to fall twice as much as medical, societal and commercial costs increase. According to the World Bank, GDP declined from around 310,000 in 2019 to 280,000 in 2020, showing an actual reduction of 9.67%.
The Jamaican public system has implemented various strategies to combat the impact of COVID-19 on poverty. The World Bank states that the country has reduced taxes to around 0.6% of GDP and has limited expenditures to 0.5%. Also, the government has diminished General Consumption Taxes for smaller-scaled businesses along with mandatory costs for farming products. Jamaica also relinquished some expenses for tactical gear and cleaning supplies.
Jamaica has implemented its CARE Programme, which provides monetary compensation for the country’s neediest citizens. The Jamaican government implemented this program on March 24, 2020. So far, approximately 500,000 Jamaican citizens have benefited from this initiative, especially individuals who became jobless due to the COVID-19 pandemic. Jamaica Information Service reported that these qualified persons received $9,000 bi-weekly every month.
According to the IMF, this strategy also includes:
- Considerate contributions to persons without work or with casual employment before COVID-19.
- Provisional allowances to persons who were working but lost their jobs due to COVID-19.
- Funding to freelance workers whose income reduced due to the pandemic, as well as small-scale companies.
The program also assists senior citizens and persons who are ill or incapacitated.
Financial Budget Changes
Jamaica is also adjusting its financial plan to fit with reduced income, more medical expenses, changes to initial spending plans and the use of monetary supplies. For instance, the government has suspended import tariffs for essential healthcare materials. In addition, the Central Bank of Jamaica has reduced its required reserves for funds while keeping the rate at 0.5%. Doing so has helped to increase the amount of money in the economy. Also, the country has asked the IMF for $520 million to help them recover from the pandemic.
These various government initiatives have significantly helped to reduce the impact of COVID-19 on poverty in Jamaica. The CARE Programme donated $25 billion Jamaican dollars to assist the economy, which is the most significant accomplishment the country has achieved thus far in fighting the economic effects of COVID-19.
Nigel Clarke, Jamaica’s Minister of Finance and the Public Service, said that due to these strategies, the country has a lesser deficit than it did a decade ago with the global financial crisis. “In addition, we had accumulated cash resources of over [3%] of GDP through public body reform, inclusive of divestment of state enterprises, and fiscal over-performance,” he stated. Also, by controlling prices, the country now has more than $1 billion in reserve funds that it did not borrow. As a result, Jamaica is now in a better place with more possibilities for recovery.
Loop, a Jamaican News Website, reported that the Minister also said that some persons have returned to work due to various government initiatives. As a result, the rate of unemployed persons dropped from around 12% in July 2020 to 10.7% in October 2020. However, it will take two to four years to get back to the pre-pandemic rate of 7.2%.
According to the Statistical Institute of Jamaica, as of January 2021, the percentage of persons unemployed was 8.9%, which is an improvement from the previous year. However, the Jamaican government must continue developing innovative strategies to economically recover and reduce the impact of COVID-19 on poverty in Jamaica.
– Jannique McDonald