Editor’s note: The following is a lightly edited post from the Inter-American Development Bank’s website written by Alana Fook. The exposition highlights that informality, income inequality and a cash-intensive economy are three forces that have brought the local transport industry to its knees and that the Government of Jamaica will need to address them in light of the impact of the coronavirus on transport operators.
Transport operators in Jamaica are feeling the pinch from social distancing measures to restrict the spread of the COVID-19. Many continue to operate by choice or to fulfil obligations to get essential workers to and from their jobs. For drivers, the reduction in demand will certainly translate into depressed incomes, from reduced hours for those employed in the formal sector or lack of passengers for independent operators, registered and unregistered alike. Although still evolving, this pandemic has highlighted a number of important challenges — informality, the dominance of cash, and inequality — that must be confronted if we are to not only survive this crisis, but to capitalise on the opportunity to rethink our car-centric approach to mobility in Jamaica.
To contain the spread of the virus, the Government of Jamaica has emphasised good hygiene and instituted several measures to encourage social distancing — the primary weapon in the fight against COVID-19 in the absence of a safe and effective vaccine, or drug to eliminate the virus once contracted — by placing restrictions on individual movement. For instance, people are encouraged to avoid non-essential trips and work from home if possible. Public passenger vehicles (PPVs) — taxis — are now required to carry one less passenger than their licence allows, buses (Jamaica Urban Transit Company (JUTC) and Montego Bay Metro) are restricted to only seated passengers, and effective April 22, masks must be worn in all public spaces, including in public transportation, and hours of operation for public transportation are restricted to 5 am to 7 pm, daily. Failure to comply with these and other restrictions imposed by the order carries a heavy penalty — a fine of up to JM$1 million and/or imprisonment for up to 12 months. Jamaica also closed its air and sea borders to incoming passenger traffic on March 21, 2020, introduced an islandwide nightly curfew on April 1, 2020, as well as community-specific restrictions on mobility where high concentrations of cases have been detected.
The efforts have been praised by the WHO and the US Ambassador to Jamaica and have helped keep the virus relatively contained. Jamaica still has far fewer cases (223 on April 20) than countries of similar size (such as Qatar, with 7,141 cases) and population (such as Kuwait, with 2,248 confirmed cases), despite having first confirmed cases only weeks before Jamaica.
While effective, social distancing measures have brought the Jamaican transportation sector to a screeching halt.
According to the most recent COVID-19 Community Mobility Report for Jamaica (April 11) location trends indicate a 53% decline in visits to transit stations, 57 per cent decline for retail and recreation, and 42 per cent decline for workplaces. This shift has led to a dramatic falloff in demand for transportation services, which has grave financial implications for transport operators and perhaps even more so for the individuals employed within the sector. Even as revenues decline, transport service providers may face increased costs associated with some of the hygiene measures required to keep employees and passengers safe. While independent operators may choose to amend schedules in response to falling demand, those operating under franchise agreements with the government-owned services like JUTC and Montego Bay Metro remain contractually obligated to maintain certain minimum service levels.
In Jamaica’s recently concluded budget presentations, Minister of Finance and Public Service (MOFPS) Dr Nigel Clarke proposed several measures to provide financial support for small businesses and workers impacted by the economic downturn associated with the COVID-19 pandemic. The COVID-19 Allocation of Resources for Employees (CARE) Programme is a US$180-million stimulus package, which consists of a reduction in the General Consumption Tax (GCT) rate and a spending stimulus. The spending stimulus will be delivered through nine programmes, most of which are targeted at registered, tax-paying small business and formal sector workers who are able to prove COVID-19-related loss of employment. Transport sector workers can qualify for a one-time General Grant, but this is only applicable for those duly licensed and registered by the Transport Authority. Informally employed individuals may qualify for a significantly smaller, one-time Compassionate Grant, as long as they do not benefit from any other programme. Despite the broad scope, the Government has acknowledged that the CARE Programme will not reach everyone and is insufficient to compensate for the economic losses many will face.
This pandemic has highlighted three important challenges that must be urgently addressed: informality, the dominance of cash, and inequality.
We are living in a time where there are more questions than answers, and many sources suggest that social distancing might last for some time and that this way of life will become a new normal, rather than a short-term adjustment. As the Jamaican transport sector grapples with this crisis, it is important to think beyond mere survival and consider ways to evolve and adapt to the new reality. This is an opportunity to make transportation in Jamaica more modern, equitable, sustainable, and accessible for all.
About the author: Born in Trinidad and Tobago, Alana Fook holds a masters degree in International Economic Relations from The American University. She currently works with the Transport Division of the IDB, based in the Jamaica country office, focusig on urban transportation, road safety, electric mobility, and innovative financing models for infrastructure. Prior to joining the IDB in 2017, she worked with the Finance and Markets Global Practice of the World Bank, where she worked on payment systems development, improving the market for remittances and financial inclusion across a number of geographic regions, including Africa, Central Asia, and the Middle East.