The Corridor Holds: Jamaica’s Summer 2020 Brought Back Some Tourists, an Historic Election, and the First Proof That Recovery Was Possible

The third quarter of 2020 gave Jamaica three things it needed: a functioning, if partial, tourism industry operating under the resilient corridor protocol; a general election that delivered the most decisive parliamentary majority in the country’s history; and the first statistical evidence that the rate of economic contraction was slowing. None of these amounted to recovery. But they amounted to something that the darkest weeks of April had made uncertain — the proof that a recovery path existed. This is the account, written in July 2021 with a year’s hindsight available, of the summer that kept Jamaica’s tourism economy alive and the election that gave its government the mandate to bring it back.

• Resilient corridor tourism operated through July-September 2020, with occupancy still far below pre-COVID.
• JLP won the September 3, 2020 general election with a historic 49-14 parliamentary majority.
• Q3 2020 GDP contraction moderated from Q2’s 18 per cent as partial tourism operations resumed.
• BOJ maintained record-low interest rates to support economic activity through the pandemic.
• Hospitality workers partially returned to work as some properties reopened under corridor protocols.
• Vaccination planning underway globally; Jamaica preparing COVAX applications for early 2021 delivery.

The summer season of 2020 was, by any normal standard, a disaster for Jamaica’s tourism industry. The resilient corridor that had reopened the island on 15 June allowed visitors in, but under constraints that no pre-pandemic travel marketing had ever required its audiences to accept: pre-departure testing, health screening on arrival, restriction to designated resort zones, limited access to the wider Jamaican cultural experience that had, in normal times, been a primary driver of repeat visitation. The American traveller who had spent three previous summers in Negril or Ocho Rios and who returned under the corridor in July 2020 arrived into a version of Jamaica that resembled the destination they remembered in its physical landscape but not in its atmosphere. The bars were operating at reduced capacity. The craft markets had limited access. The street food that makes a Jamaican holiday irreducibly different from a stay in a sterile resort environment was harder to reach. And yet they came.

The Jamaica Tourist Board reported that July and August 2020 saw meaningful visitor arrivals under the corridor protocol — numbers that would have been unremarkable in any previous summer but that represented, in the context of a pandemic that had closed most of the Caribbean’s competitors entirely, a statement about Jamaica’s willingness to stay open and its ability to manage the health risk that openness created. The occupancy rates were low: properties that had run at eighty per cent occupancy in July 2019 were operating at twenty or thirty per cent. But the revenues those guests generated — and the wages that those revenues paid — kept a portion of Jamaica’s hospitality workforce from sliding further into the long-term unemployment that the closure months had threatened. For the room attendant who had been on unpaid leave since March, a call-back to work at reduced hours was not prosperity; it was lifeline.

The political event of the quarter — and, arguably, of Jamaica’s generation — came on 3 September 2020. Prime Minister Andrew Holness had called the general election at what critics considered an opportunistic moment: a country distracted by a pandemic, an opposition in disarray, and a government that had handled the initial COVID response well enough to retain public confidence. The result answered any question about whether the electorate endorsed the analysis. The Jamaica Labour Party won 49 of 63 seats, reducing the People’s National Party to 14 — the largest margin of victory in Jamaican electoral history. The Electoral Office of Jamaica reported voter turnout of approximately forty per cent, low by historical standards, which some analysts attributed to COVID-related hesitation about voting in person. The PNP’s share of those who did vote was its worst in decades. Holness interpreted the result as a mandate to manage both the pandemic recovery and the longer economic restoration that the COVID shock had made necessary.

Nigel Clarke returned as Finance Minister in the new government, bringing continuity to the economic management at the precise moment that continuity mattered most. Clarke’s first statements in the new term set out a framework that would come to define the government’s approach to recovery: the primary surplus would be restored as quickly as conditions permitted, but not at the cost of the social protection spending that the pandemic had made necessary; the debt reduction trajectory would resume, but on a timeline that acknowledged the reality of a post-COVID balance sheet that had taken on new obligations; and the IMF monitoring relationship would continue, providing the external discipline and market credibility that Jamaica’s credit ratings required.

The Bank of Jamaica maintained its policy rate at historically low levels through the quarter, reflecting the assessment that inflation — subdued by the collapse of domestic demand and the weakness of global commodity prices in 2020 — was not a threat in the near term. Foreign exchange reserves, which had entered the crisis at comfortable levels partly as a result of the pre-COVID SBA’s reserve accumulation requirements, held up through the quarter. The exchange rate, which had depreciated modestly against the US dollar during the worst of the crisis, stabilised as the IMF disbursement and the corridor’s tourism revenues began to provide foreign exchange supply. The macroeconomic management of the crisis, which had been disciplined rather than panicked, was beginning to show in the stability of Jamaica’s external accounts even as the GDP accounts continued to record the damage.

The GDP data for Q3 2020, released in the months following the quarter’s close, confirmed that the rate of contraction had moderated significantly from Q2’s eighteen per cent. The partial tourism operations, the continued performance of the BPO sector, and the resilience of the agricultural and construction sectors meant that Q3’s year-on-year decline was measured in single rather than double digits — an improvement that was relative rather than absolute, since a smaller contraction in a still-contracting economy is not growth. STATIN data would confirm, when the full year was assembled, that calendar 2020 GDP had contracted by approximately 10 per cent in total — a number consistent with IMF projections and broadly in line with peer Caribbean economies that had also reopened under health protocols rather than remaining closed through the second half of the year.

What This Means

Q3 2020 matters, in retrospect, for what it demonstrated rather than what it achieved. It demonstrated that the resilient corridor could function operationally without producing a COVID outbreak that would have required Jamaica to close again — a non-trivial achievement, given that the protocol was designed in weeks by a small team under crisis conditions. It demonstrated that the Jamaican electorate, even under pandemic constraints, was capable of delivering the kind of decisive political mandate that economic reformers had been trying to secure for a decade. And it demonstrated that the institutions built during the reform years — the fiscal rules, the central bank’s independence, the IMF monitoring relationship — were capable of absorbing a shock of unprecedented severity without collapsing. These are foundations, not achievements. But without them, what followed would not have been possible.

The Road Ahead

Writing in July 2021, the picture is brighter than it was a year ago but the work remains enormous. Jamaica’s vaccination programme, which began in February 2021 with COVAX-delivered doses, has accelerated through the second quarter of 2021 as vaccine supply improved. The resilient corridor has evolved into a less restrictive framework as vaccination coverage in Jamaica’s source markets — principally the United States — increased, allowing the island to progressively relax the testing and movement requirements that had defined the protocol’s initial phase. The 2021 summer season, which this publication will report in its next issue, is showing visitor numbers substantially above 2020 and beginning to approach pre-COVID trajectories in some market segments. The debt ratio and the primary surplus remain the central fiscal challenges of the new term, but Finance Minister Clarke has presented a credible medium-term framework for their restoration. The 49-14 majority that September 2020 delivered gives him the parliamentary runway to execute it.

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