IMF rep, business leaders welcome drop in unemployment

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IMF rep, business leaders welcome drop in unemployment

Tuesday, July 23, 2019

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KINGSTON, Jamaica — International Monetary Fund (IMF) Resident Representative, Dr Constant Lonkeng Ngouana, says the reduction in Jamaica's unemployment rate to 7.8 per cent is a “tremendous achievement”.

Noting that the rate was approximately 16.3 per cent at the start of Jamaica's current engagement with the organisation in May 2013, Dr Ngouana contended that “more than halving this in six years is very significant”.

He was commenting on the results of the Statistical Institute of Jamaica (STATIN) April 2019 Labour Force Survey, which were outlined during the agency's recent quarterly briefing at the Knutsford Court Hotel in New Kingston.

STATIN reports that the 7.8 per cent out-turn is two percentage points lower than the 9.8 per cent recorded for the corresponding period last year, and 0.2 per cent lower than the January 2019 out-turn.

The number of unemployed people as at April fell by 25,900, or 19.7 per cent, to 105,900 relative to 2018.

Correspondingly, the overall employed labour force increased by 29,900 people or 2.5 per cent to 1,244,500, with the total labour force rising to 1,349,900 people, some 4,000 more than 2018.

Ngouana argued that the level of reduction in unemployment recorded thus far “is not something that happens very often” in countries experiencing the extent of economic challenges Jamaica faced.

“The trend in the world has been that economies, after their crises, tend to have jobless recoveries,” he noted.

The IMF rep said in Jamaica's case, the opposite has been occurring, where, while growth may not yet be at the desired level, a significant number of jobs are being created.

Meanwhile, there is heightening stakeholder anticipation of further reduction in unemployment.

Jamaica Employers' Federation (JEF) President, David Wan, described the latest figures as “very positive”, citing activities in construction and business process outsourcing (BPO) among the main drivers of job growth for the period.

“On the whole, it seems like it [unemployment reduction] will continue, because we keep hearing announcements of new projects coming on stream [particularly in] construction,” he said, pointing to the potential for further job growth, particularly in tourism.

Wan is of the view that these and other engagements will dovetail into the economic growth figures, which rounded out at 1.7 per cent for the first quarter of the 2019 calendar year, between January and March, and 1.9 per cent for the 2018/19 fiscal year.

He said that regularisation of the informal or “underground” economy will be a significant contributing factor to the out-turn for job and economic growth.

“The multilateral institutions have always said that there is a significant portion of the Jamaican economy that is not being reported because of underground activities. So I think it will contribute to the growth [of] jobs in particular. I believe job creation may be a better proxy for the growth of the economy than the gross domestic product (GDP) numbers,” the JEF President added.

Newly elected Jamaica Manufacturers and Exporters' Association (JMEA), President Richard Pandohie, said further reduction in employment is cause for celebration.

He, too, pointed to the construction and BPO sectors as the main areas generating the growth in jobs and driving down unemployment.

“We have to laud more Jamaicans being put to work… that's a good thing. What we have to ensure, however, is that we are creating a sustainable model for that because activities like construction won't go on forever. So we have to make sure our people are being trained to take on more value-added jobs… we have to make sure we have a plan in place to move employees up the job value chain,” Pandhoie added.

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