As the US re-engages and reopens
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After the social and economic battering that economies across the world have experienced over the past 16 months, there appears to be a slow and generally cautious easing of travel and personal interactive restrictions taking place in most jurisdictions. World leaders are attempting to kick-start their individual economies in their efforts to erase the double-digit negative performances within many of those economies. Jamaica, is of course, no exception. After all, as social creatures, humans depend on physical interaction as a critical component of our daily lives. That dependence, though, has been laid waste by an unwelcome pandemic that is still showing signs of a resurgence in some parts of the world. I, for one, welcome the attempts being made by governments everywhere to return their countries and the world to a state of normalcy.
Here in the United States, the economy recorded its worst performance in 74 years with Gross Domestic Product decreasing by 3.5 per cent in 2020, the biggest drop since 1946. Except for government and the housing market, nearly every sector contracted in 2020 with consumer spending having sunk by 3.9 per cent, decimating consumer spending which generally accounts for more than two-thirds of the United States economy. It is little wonder that state and local governments across the USA are pulling out all the stops to get people back to work and to get business activities moving at all levels. That, though, depends on public receptiveness of the continuing vaccine roll-out programme, the major strike-tool in its armory to fight the coronavirus. So far, the efforts seem to be paying dividends as the economy roared to a 6.4 per cent growth in the first quarter of 2021, with analysts projecting a 7.5 per cent rate of growth for 2021 overall.
It is unarguable that the US growth has been stimulated by the stimulus cheques authored by Washington as well as by the ongoing vaccine programme. The latter is, itself, a kind of stimulus as the programme has not only raised people’s confidence to get back outside but also plugged millions of dollars into local economies through the engagement of task workers to provide the jabs in arms. At the same time, the sharp turn from the year-long economic flux has been having a positive impact on wages as businesses in multiple sectors across the country offer increased pay packages to lure workers back. This begs the question of whether workers will take the bait. For one, the pandemic has resulted in a diametric shift in employment demands from potential workers, many of whom used the pandemic period to re-equip themselves and to get a larger slice out of the economic opportunities available. Added to that, millions of women who went home during the pandemic are unlikely to return to the traditional work world, some having created business opportunities for themselves.
The foregoing helps to shape an interesting platform as we look towards the next two quarters. For certain, increased confidence in the US economy and its continued resurgence provides for potential benefits to the wider global economy. After all, the United States of America is the largest consumer economy in the world and a re-engaged US consumer is what most economies are anticipating, most notably Jamaica and its decimated tourism industry.
Tourism is vital to the Jamaican economy as it is a major source of employment, government revenue, and foreign exchange earnings. Its interlinkages with multiple sectors of Jamaica’s economy meant that it contributed to a sizeable proportion of the more than 30 per cent contraction in the Jamaican economy. In the circumstances, most Jamaicans wait with bated breath to see the increased tourist traffic that is being anticipated from a re-engaged US economy and the direct impact that will have on the island’s economic fortunes as Jamaica reopens for business.
We should tread cautiously, though, as Jamaica is still being battered by the pandemic’s long lingering trek through communities across the island. Yes, it is true that the death rates are two-thirds less than the global numbers, but one must consider the insidious nature of this disease and its potential for long-term harm to those affected. We need to de-politicize the island’s response and even more so, we still need to keep our guards up.
Richard Hugh Blackford is a Jamaican creative artist residing in the United States.
