The private sector is expecting a possible decline in business in 2014 following the announcement by Minister of Finance Christopher Sinckler that Government will be sending home some 3,000 public sector workers between January and March next year.
Head of the Barbados Private Sector Association John Williams, reacting to the announcement, said while the move was “not unexpected”, there could be a major negative impact on business as spending among the population would be reduced.
Williams told Barbados TODAY the announcement did not come as a surprise because “the state of the Government finances seem to dictate that we would require serious measures”.
“That was made clear by the Minister of Finance in his Budgetary Statement in August. So whereas it is unwelcomed, it is not wholly unexpected,” said Williams.
“This is a serious austerity measure and there will be an impact on business because of the reduced spending power in the economy,” he added.
Williams said while there was “not much opportunity” to carry out detailed consultations with members of the association following the announcement, “the fact is that the contraction in the economy will mean less spending power and will have an impact on business”.
He said while there was the concern about less spending power, “on the other hand there is an appreciation” that Government had taken some action towards trimming its expenditure.
“Because as you would be aware there was a high degree of uncertainty as to what the measures would be and when they would be announced. So although the news is not good, at least we know what the Government’s plans are now,” explained Williams.
Asked whether there was any way the private sector could absorb some of the thousands of people expected to be unemployed in a matter of weeks, Williams said it would require investment to do so.
“In the private sector the increase in employment will come about with investment and that will follow the question of confidence. As we said before, if the business community can regain confidence because it understands that the national economic issues are being addressed we expect investment will follow and with that investment will be jobs,” he said.
“But,” he added, “that will take some time and clearly those jobs are not going to be created overnight. Although if we can get some of the larger projects that involves construction going then those jobs can be created quite quickly”.