A STATEMENT FROM THE BARBADOS PRIVATE SECTOR ASSOCIATION. We must all pull together to restore the economy of Barbados

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1 A STATEMENT FROM THE BARBADOS PRIVATE SECTOR ASSOCIATION We must all pull together to restore the economy of Barbados The Barbados Private Sector Association, like other organisations in Barbados, is deeply concerned about the current economic situation. The status quo, in our opinion, cannot be allowed to continue and hence this appeal for a process to be started towards achieving a consensus on how we best can together meet these challenges. We believe that local circumstances are entirely within our control and that we have the capacity to resolve the problems confronting us. We have two huge advantages that can help make this happen: first, our size - in a small country like Barbados we can turn things around quickly; secondly, the vast, but largely untapped, intellectual potential of our people, both at home and abroad. We still have not fully grasped how to facilitate the large contribution in ideas and investment that Barbadians in the diaspora, especially the younger generation, can make to Barbados. That, too, must now be part of our common thrust. It goes without saying that this is no time for partisan political thinking or advantage seeking by the private sector and the trade unions. This is a time to analyse and tackle all our difficulties objectively and collectively and to do so in that same spirit of cooperation which served us well in not dissimilar circumstances 25 years ago when we correctly rejected devaluation, and fixed our foreign exchange and deficit problems. Let us not dispute the fact that Barbados is now facing the most prolonged socio-economic crisis since Independence. Let us believe instead that we shall be able to overcome these grave challenges once all Barbadians understand clearly the nature of our problems, commit to solving them, and that the resolution of these problems, although a demanding task and requiring everyone to make some sacrifice, is not beyond our capabilities as a country. If we change nothing, then we shall have a situation that invites everyone to break for themselves. This is a recipe for disaster. 1

2 If we do not all pitch in as we did when confronted by the economic crisis of the early 1990s, then the decline will continue and the sacrifices required for recovery will be harsher. On the other hand, if we start now in a truly united effort to pull ourselves out of this crisis, then the sacrifices required will be less harsh and our future can look rosier. It is the fervent belief of our people in Barbados which has preserved our small, resource-scarce country over fifty years of independence and made us as successful as we have been. That is what has saved us from all the storms which we have had to face. We must rely upon it again. The Problems The range and severity of the underlying problems may be summarised as follows: a lack of confidence of investors, lenders and entrepreneurs, both foreign and domestic, in the ability of our government to meet its commitments, especially in the longer term the printing of money and an unsustainable fiscal deficit an imbalance in the earning and spending of foreign exchange worsened by some leakage of that foreign exchange low levels of productivity across all sectors of the economy, including allowing hundreds of acres of arable land to lie idle impediments to entrepreneurial activity, particularly in areas oriented towards earning foreign exchange difficulties in doing business management in the private sector demoralisation among civil servants having to work in an archaic environment where administrative inadequacy creates inefficiencies costs associated with inordinate delays and processes in the judicial system increases in both rumours of corruption, and anti-social behaviour stemming from the prevalence of illegal drugs There are short and long term solutions to all of these and other problems. The short term solutions should, in our view, be initiated urgently through meaningful dialogue at the level of the full Social Partnership. 2

3 Short term solutions We believe that the institution of the Social Partnership, including the potential of its Subcommittee, is underutilized. We believe that the Social Partnership provides the means whereby Government can initiate discussion on each of the major issues besetting the economy, debate the policy options, and thus derive the benefit of making use of that facility before embarking upon any further or additional fiscal policies and infrastructural priorities. The sharing to the greatest extent possible of all the relevant facts and figures allows for objective decisions, including a rationalisation of government expenditure, to be made on the basis of such information. Any policies and proposed changes once determined by Government should then be explained to the Social Partnership in sufficient clarity so that the success in implementation can be assisted at that level. In addition, the rationale of what has been decided should be made known to the public. We advocate the establishment of a broadly constituted Oversight Committee as a subcommittee of the Social Partnership. Its sole purposes would be to monitor the fiscal, monetary and quantitative targets set by the government to ensure they are met and to advise on any necessary remedial action. This in itself would provide a level of accountability and transparency thereby restoring investor and public confidence in the economic recovery. Such a group has been established for that very purpose in Jamaica. It has had remarkable success there and is thus worthy of imitation as part of a new and enhanced collaborative effort towards successful implementation of decisions. We urge the Government to accelerate without any further delay the implementation of the Efficiency Committees of the Social Partnership to monitor public sector reform with the goal of producing a more efficient and delivery-focussed civil service. Such committees would identify the critical departments that effect the ease of doing business in Barbados, such as the Registry, the Customs, the Corporate Registry, and Town Planning, and offer advice on the process of transforming them to function at the highest levels of efficiency. These committees could also serve in a further advisory capacity in any programmes for the partial or full divestment of some entities, or the merging of agencies for greater economies of scale, and/or outsourcing of those 3

4 functions that might be undertaken at significantly lower costs by the private sector. Immediate consideration should also be given to the reestablishment of a separate committee to deal with matters related to the saving of foreign exchange and increasing the earning capacity of all Barbadian businesses in that regard. The private sector, the trade union movement, the public sector and academia should all be represented on these committees. They should publish regular reports, at least quarterly, to keep the Barbadian public informed. Long term goals In the long term we need to work through concerted and sustained tripartite effort for the transformation of our society and our economy so as to forge a Barbados that is truly globally competitive, caring, fair and disciplined. This objective will be achieved if we can ensure the following: reformed governance at all levels that is more transparent, accountable and participatory through a reenergised Social Partnership a government that has the highest credit rating in the country and meets its commitments without delays or doubt, and enforces the same standards in its collection of taxes an innovative, entrepreneurial and competitive business community that is the primary source of wealth creation, is committed to the well-being of its employees, is infused with social responsibility, and understands the need to export and expand beyond Barbados a transformed public sector that is better managed and more transparent; places citizens at the centre of service delivery decisions; provides humane and rewarding work in an environment of industrial relations harmony; and is an effective partner in wealth-creation a trade union movement that is united in its continued protection and advancement of workers rights in circumstances of mutual trust and respect, partners with government and the business community in creating wealth, employment, and job satisfaction, and helps enhance the productivity of all Barbadian workers 4

5 an educational system designed to satisfy and develop the diversity of student potential in its entirety, that produces entrepreneurs and innovators and citizens who understand and value their social responsibilities, their democratic rights, and the principles of accountability and transparency in public governance The Barbados Private Sector Association acknowledges that some of the ideas put forward have been conceived and previously expressed by others. The short term solutions have been broadly discussed with the prime Minister who has committed to improved diologue with the Social Partnership. Our own call now is for the urgent start of a process which can be carried forward by all the Social Partners on the basis of joint involvement and joint ownership. The Barbados Private Sector Association is optimistic that we can pull out of the current crisis and re-establish the basis for a prosperous, competitive and socially just Barbados. The Barbados Private Sector Association urges individuals and the leaders of associations of all kinds to support this call publicly, and to commit themselves to the effort and sacrifice that Barbados needs from them. The Barbados Private Sector Association pledges that it shall do its part in the dialogue and deliberations of the Social Partnership in resolving our problems. 5

6 Highlights to be shown bold in a boxed insert. Let us not dispute the fact that Barbados is now facing the most prolonged socio-economic crisis since Independence. Short term solutions should, in our view, be initiated urgently through meaningful dialogue at the level of the full Social Partnership The Social Partnership is underutilized and should meet urgently and allowed to have meaningful dialogue on fiscal policy and infrastructural priorities. An Oversight Committee should be formed to monitor the implementation of Government s economic policy. Efficiency Committees should commence to meet to focus on the Ease of doing business in Barbados. Government, Labour and the Private Sector have general agreement on the above actions. 6