BRIDGETOWN, Barbados, Tuesday January 7, 2014, CMC – The Barbados government Monday urged citizens to “band together” as it seeks to implement a raft of policies, including job cuts and a reduction in expenditure in a bid to reviving an ailing economy.
Finance and Economic Affairs Minister Chris Sinckler told a news conference that the adjustment process was never ever going to be easy and the Freundel Stuart government does not pretend that it was going to be a “painless process”.
But he promised Barbadians that “if we believe we can turn the situation around we will,” urging them to “work harder, smarter and together” in reviving the economy.
“Your government is committed to succeeding and turning around this economy we will not be distracted. Let us band together as a strong and resilience people, working together to make our country better, taking the tough decisions that we have to but implementing the decisions that we know will bring years of lasting growth and development”.
Late last month, Sinckler announced the plan by the Freundel Stuart government to cut public service jobs in a bid to save BDS$143 million (One BDS dollar = US$0.50 cents).
He said government would also institute a “strict programme of attrition” across the central public service, filling posts only where it is absolutely unavoidable, over the next five years, ending 2018-2019.
“This attrition is expected to reduce central government employment levels from approximately 16 970 to 14, 612 jobs – a projected loss of 2 358 posts; and savings of BDS$121 million. Over the current 19-month adjustment period public sector employment will be reduced by an additional 501 jobs with a projected savings of BDS$26 million,” said Sinckler.
The National Union of Public Workers (NUPW), which represents the majority of the 28,000 public servants, has accused the government of already retrenching workers through technical maneuvers.
The government said it intends to trim the service by 3,000 jobs starting from January 15.
Sinckler told reporters that the government had already undertaken a number of measures to increase revenue “and we are of the view that more taxation will not be part of the solution at this point in time.
“The analysis that we have undertaken makes it clear that government expenditure needs to be reduced by a further BDS$143 million at the minimum over the full financial year and meeting this target would mean an inevitable, unfortunate though it may be, an inescapable loss of jobs in the public sector”.
Sinckler said it was crucial that the government now undertake “ a long overdue reform of the public sector” noting that the aftermath of the 1991-93 measures provided a golden opportunity to fundamentally restructure the service.
“However, instead of building on the measures in the succeeding years, the public sector numbers actually increased,” he said, noting that a large number of new statutory bodies were created and the public sector wage bill was made more inflexible to deal with by a constitutional amendment.
Sinckler said the government was now reviewing the operations of 19 statutory operations “with a view of consolidating their operations” following discussions with the relevant stakeholders.
The Finance and Economic Affairs Minister said that in dealing with the economic situation, the government was ‘weighing suggestions from all sectors but we are of the view at this critical moment any alternative policy measures must be clearly implementable in the critical time frame facing us and they must be adequate enough to address the problems we face now”.
He said from a legal stand point the government cannot accept suggestions for a cut in public sector wages as a means of dealing with the situation, adding “government’s hands are tied.
“It will stay that way until the constitutional amendment preventing it is reversed”.
But even then, Sinckler said for such an option to be viable, the cuts must be much higher than what is now being proposed.
“These are difficult and painful decisions but our need to protect our dollar leaves the government with few options at this time,” he said, adding that in keeping with the protocols of the social partnership the government would continue to hold meetings with the partners “as we seek credible solutions to the challenges we face and explore feasible alternatives to the measures we have announced”,.
Sinckler said that the government would, while seeking to reduce expenditure also seek to attract investment and improve productivity in the country, announcing that a series of measures including the construction vital infrastructural projects would begin in 2014.
He said there would also a significant role to be played by the private sector in these projects, to “not only cut government expenditure but to create jobs for those who might be affected by proposed retrenchments”.
Sinckler promised that once the economy stabilizes, “Barbados can restore the modest but persistent rate of growth which has underpinned the steady improvement in the standards of living of Barbadians since the 1950s.
He said the growth rate is expected to firm up by 2015 onwards “to achieve an average we expect of 2.5 to three per cent over the medium term”.
Sinckler said that the fundamentals of the local economy remain intact and that foreign exchange reserves were currently “more than adequate.
“The government is implementing a clear and credible plan to reduce the fiscal deficit and the diversification and restructuring of the Barbados economy is well underway,” Sinckler told reporters.