Editorial | Do COVID-style transfers

Garnett Reid, the president of the Small Business Association of Jamaica (SBAJ), succinctly encapsulated the argument this newspaper has been making since Hurricane Melissa devastated the western third of the island a month ago.

“Give them care packages, but that is for a week and you are back at square one,” he told The Gleaner. “It makes no sense.”

Not literally, of course.

But Mr Reid’s point is clear: operators of small businesses in the parishes most badly affected by the Category 5 storm – St Elizabeth, Westmoreland, Hanover, St James, Trelawny – need a leg up to jump-start their recovery.

Or, as Simon Newell, who operates a boutique nine-room guest house, Katama Cabins and Villas, in Treasure Beach, St Elizabeth, puts it: “We are looking to fix back, but due to (lack of) funds and the cost of fixing back, it’s going to be a very, very, very slow process.”

It was only a week before Melissa caused extensive damage to the property that Mr Newell and his wife had completed a J$14-million repair to the facility after Hurricane Beryl struck last year.

The Newells’ new worry is how, and where, to affordably find the millions that it will take to repair the guest house.

However, at least for now, the six persons employed at Katama Cabins and Villas are in a better position than most of the hundreds of thousands who were impacted by the storm and are without jobs and livelihoods. They have been kept on while their bosses fundraise to help meet their salaries and to provide relief to other people in the community.

ECONOMIC STIMULUS

While Garnett Reid’s advocacy is primarily on behalf of owners of small businesses, his case is equally relevant for a large swathe of Melissa victims. The situation demands urgent action by the Government to address the well-being of individuals, while at the same time helping to rev up industry and commerce in western Jamaica. The effect would also be positive for the national economy.

The Gleaner has already proposed job-for-pay schemes, such as clean-up brigades to accelerate the removal of debris left by the hurricane, thus lessening public health risks. A cleaner environment would also help to return a sense of normality to communities and be beneficial to people’s psyche.

The situation, however, demands an economic stimulus far greater than what can be achieved by a relatively narrow job-for-pay programme. The Government already has a template for this larger project. It needs only to revisit, and modify for today’s circumstances, what it did five years ago, at the onset of the COVID-19 pandemic, when thousands of people lost their jobs and the economy tanked 10 per cent.

Should there be questions about the merits or logic of a stimulus package for western Jamaica, the critics need only recall some of the facts about Hurricane Melissa.

Packing sustained winds of 185 mph (with gusts of over 250 mph) it was the most intense storm to make landfall in Jamaica, at least in modern times. Its winds and the floods caused by its rain killed 45 people (there have been another six post-storm deaths from an outbreak of leptospirosis), and damaged or destroyed over 135,000 homes, affecting around 900,000 people. More than 30,000 were internally displaced.

Most commerce in the west and southwest of Jamaica, including the vital, foreign exchange-earning tourism, is essentially at a standstill. In the breadbasket agricultural region of southern St Elizabeth, tens of thousands of tonnes of crops were destroyed.

CURRENT INSTABILITY

While the direct cost of the storm’s damage has been estimated at US$10 billion, or over 40 per cent of GDP, when its indirect impact is taken into account, the figure will be much higher.

Recall that many hotels are closed, their employees now without pay cheques. Businesses that depend on tourism, like taxi and tour services, visitor attractions and craft shops, have either shuttered or are merely limping along. So, too, have shops and stores, itinerant vendors, community bars and other places of entertainment, among others.

Getting money into these people’s pockets, allowing them to restart their businesses, or otherwise consume, will inject life to the region’s economy and spread beyond the west.

In this regard, small businesses, many of which will find it difficult, if not impossible, to put up collateral to back normal credit, need unsecured, low-cost loans and, in many cases, outright grants. The Development Bank of Jamaica (DBJ) has to be aggressive in tailoring its Portfolio Guarantee Scheme (previously the Credit Enhancement Fund) to meet the circumstances.

And similar to its J$15-billion COVID-19 stimulus package for direct transfers and job protection schemes, the Government can send cash to people who are now out of work and/or in desperate need.

The Gleaner appreciates that unlike during the pandemic, the current instability of online systems will make signing up for, and the tracking of, these transfers more difficult. Yet doing it efficiently, and with transparency, ought not to be beyond the country’s capabilities.

The need is urgent.