The umbrella trade union grouping is warning Government against severing public servants in a bid to cut its wage bill.
In responding to a call Tuesday by Acting Governor of the Central Bank of Barbados Cleviston Haynes for belt-tightening, including a reduction in Government spending, President of the Congress of Trade Unions and Staff Associations of Barbados (CTUSAB) Cedric Murrell is advising Government to find another means of achieving its target.
While Haynes steered clear of recommending cuts in the public service, there have been calls from some sections of the society for Government to reduce the workforce in order to help reduce the deficit.
However, Murrell said it was a formula that did not add up and was likely to backfire.
“The question of wages and cutting of the deficit and the whole matter of impacting on public sector employees, we do not think that is the answer to the problem. Once we begin to shrink our economy then it means that ultimately we are not going to be able to satisfy our needs – that is in terms of being able to create sustainable growth [in the] economy.
“The big concern that the congress have is that, is the private sector of Barbados geared at this time to be able to absorb those persons that are being cut? We are not convinced of that and so we do not see that as a strategy that will be able to get us out of the woods,” the CTUSAB president said.
Murrell told Barbados TODAY the latest Central Bank report had confirmed that the economy was “still troubled” despite some “green shoots” in the form of two per cent growth and a small increase in the international reserves.
Haynes had reported Tuesday that the foreign reserves grew slightly to reach $705.4 million or 10.7 weeks of import cover, up from $681.1 million or 10.3 weeks of cover at the end of last year.
The growth continued to be led by the vital tourism sector, which recorded a 4.4 per cent increase in long-stay visitor arrivals.
However, Murrell said with the international reserves not growing as quickly as he would have liked, what the economy needed was more investment in order to create sustainable growth.
“On the question of growth, we in the Congress are still concerned with regard to how we are going to grow the economy, because that is the only way we are really going to have any sustainable basis upon which we can plan. One has to ask the question of the chicken or the egg situation and that is whether we should have confidence in order to invest or whether we should invest to create confidence. I think that debate has to happen,” he said.
In relation to whether the island should seek help from the International Monetary Fund, the trade unionist agreed with the acting governor that “we have to put our house in order by making our homegrown solutions sustainable”.
Meanwhile, President of the Barbados Economic Society Jeremy Stephen said though he welcomed the two per cent growth, the biggest takeaway from the report was the admission that “all is not well”.
Describing Tuesday’s presentation as a “brutally honest” one, the economist said Haynes had admitted that serious reforms were needed in relation to taxation and expenditure management.
However, he warned that unless Government followed through with the necessary steps, the recommendation from the Central Bank for decisive action to bring stability to the public finances would be nothing but talk.
“I believe a government that is prepared or recognizes that it must do, and is committed to doing, what the Central Bank speaks about, that is some form of belt-tightening, especially in a run up to an election, it should be actually commended. If there is will to follow through it should be commended. If they don’t, it just means that we are paying lip service,” Stephen said.