Concern growing over impact of coronavirus on local businesses

A day after the St Mary Chamber of Commerce, Industry and Agriculture raised concerns about the likely adverse impact of the deadly novel coronavirus on local businesses, the parliamentary Opposition has added its voice to those warning that even if the virus never gets to Jamaica, it will have a deleterious effect on the business sector.

The possible negative multiplier effects of the novel coronavirus, officially labelled COVID-19, on businesses was among the concerns that dominated the agenda at Saturday’s quarterly luncheon of the business network group at Casa Maria Hotel, Port Maria.

The highly anticipated meeting attracted more than 70 persons from across the island, with chamber president Frederick Young disclosing that prior to the weekend luncheon, the likely impact of the disease had been discussed by several chamber of commerce presidents. The virus is already disrupting global trade and commerce.

“We looked at how businesses are being affected by crime. We also looked at the coronavirus, although not yet confirmed in Jamaica, but we’ve started to feel the pinch of it. The wharf is now almost empty of containers, we saw in Ocho Rios where ships have been turned back, and we saw where stock markets across the globe have gone down, and those things affect us directly and indirectly. Those are some of the things that came up in the meeting,” Young told the luncheon attendees.

Yesterday, the People’s National Party (PNP) in a press release warned that the country should brace for a possible contraction of the economy based on the growing adverse global effects of COVID-19, as well as the continued effects of the local bauxite shutdown.

With the Planning Institute of Jamaica projecting an anaemic 0.6 per cent growth rate for fiscal year 2019-20, following on the 2019 final-quarter growth of 0.1 per cent, Jamaica could, in fact, be heading into a period of economic contraction, according to the PNP.

NEGATIVE TERRITORY

“Key sectors of the economy are already in negative territory, with the construction sector ­shrinking by two per cent in the fourth ­quarter of 2019 and bauxite/­alumina in a deep tailspin with the closure of JISCO/Alpart,” shadow minister of finance and planning Mark Golding pointed out. “Therefore, it cannot be business as usual since it is clear that the economy has been slowing and serious challenges lie ahead,” he said.

“The Government needs to level with the people and indicate what measures will be pursued to mitigate the adverse impact of this economic storm on ordinary Jamaicans. The Opposition stands ready to join in a national response to the looming crisis, but the Government must lead and not bury its head in the sand as events unfold,” he insisted in the press release.

“The situation is ominous,” he further said, with bauxite/­alumina facing waning demand from the dislocation in China and the ­vulnerability of ­tourism to vacationers’ reluctance to risk international travel. In ­addition, manufacturing is exposed to ­serious disruption in the ­international supply chain and much higher prices for alternative sources.

“We are already seeing a sharp reduction in logistics activity at the Port of Kingston, with port workers being told to take a pay cut or face lay-offs,” Golding lamented.

Efforts to get a response from Minister of Finance Nigel Clarke were unsuccessful as his mobile phone went to voicemail and he did not respond to our messages up to press time.