Barbados has always had the benefit of enlightened and intelligent leadership. When faced with fiscal challenges our past leaders have looked at all the associated elements to resolve the problem. In every instance, they have touched on productivity and for all the progress we have made, no matter how short-lived, we have made none with productivity. It’s the elephant in the room that we need to stop ignoring, and it is the one area that will continue to undermine any progress we make.
Productivity is defined as an economic measure of output per unit of input. Inputs include labour and capital while output is typically measured in revenues and other gross domestic product (GDP). In short, the discussion is on how we do more with the same or fewer resources.
The first Prices and Incomes Protocol was signed into effect by the leaders of the day, that being: Prime Minister Erskine Sandiford (for the Government), Mr LeRoy Trotman, (for the workers) and Sir John Goddard (for the private sector), covering the period April 1, 1993, to March 31, 1995. It was developed as part of the response to the grave economic crisis which faced Barbados in 1991 and 1992. The protocol had a very clear economic focus and was in fact, a central part of the efforts to strengthen the economy by enhanced competitiveness through productivity improvement.
Since then, in an effort to support this initiative, the Productivity Council (formerly the National Productivity Board) was established by an Act of Parliament on August 31, 1993, to further the objectives of the Protocol. The Office of Public Sector Reform was established in February 1997 and the National Initiative for Service Excellence (NISE) Inc. was established in 2005.
On February 25, 2015, then Central Bank Governor Dr Delisle Worrell pointed out that a NISE survey carried out in 2013 had indicated that only 30 per cent of the Barbadian workforce felt fully committed to their jobs. He added that the problem was especially acute in the public service and noted that the Global Competitiveness Report identified the inefficiency of Government bureaucracy as the most damaging factor for doing business in Barbados. “Each and every public servant should resolve to play their part in improving that statistic,” he insisted.
We must quickly develop a transformative environment for business to flourish; an environment that allows our businesses to become part of local, regional and ultimately global value chains.
So how do we do this? I want to suggest that like development, transformation is not an end in itself, but a journey and a process – one in which we confront and understand our challenges and constraints – one in which we work together to overcome those challenges and constraints to be better than we were before.
The World Bank will soon be publishing a book called Open and Nimble: Finding Stable Growth in Small Economies, in which the authors Lederman and Lesniak make a number of observations about small economies, many of which are known to us and are very much a lived reality.
One of the central tenets of the book will be that small should be turned into an advantage and that the constraint of small size and diseconomies of scale can be mitigated by small economies becoming more agile and innovative. And that is where our transformation needs to start – it is where we can accelerate our insertion into the global economy by demonstrating that we can punch well above our weight.
To achieve this agility we must accelerate efforts to make it easier to do business in Barbados – with a specific emphasis on those indicators tracked by the World Bank’s Doing Business Report. Business regulation can enable new ideas to come to life – these new ideas propel innovation. When for example, a software engineer realizes that he or she can develop a better and less-expensive product than is currently available, he/she may choose to start a company to develop the idea. They will be more likely to become an entrepreneur in an economy where the rules governing start-ups are accessible, transparent and predictable. Conversely, in an economy where business regulation is cumbersome or ambiguous, they may be less willing to start their own company. In this case, the economy forfeits a new entrepreneur (a young one at that) – as well as the associated capital investment and job creation. In turn, consumers have fewer, lower quality and more expensive product choices.
At the same time, this cumbersome regulation also drives up the cost of providing the service to the private sector and regular citizens.
Reducing the per capita cost of providing public services while at the same time providing those services in an efficient and effective way that facilitates the users rests on two solutions:
First, we must evolve a more cooperative relationship with the private sector and evolve a model of public-private partnership. In this regard, we are not talking about privatization but working with the private sector to arrive at innovative and technology-driven approaches to making public services more readily available across the country – especially in relation to payments of fees for licences, etc.
Secondly, we must accelerate our use of technology. Quite frankly, the pace of what has been called ‘disruptive change’ generated by developments such as cloud services presents an opportunity to change the way the public sector operates and delivers services to citizens and businesses. At the same time, increased availability of government-held information, data analytics, and predictive modelling have the potential to unlock the value of information to help solve complex problems and generate innovative ideas.
In the 2013 Doing Business Rankings report, Barbados was ranked 88th overall; today we are ranked 127th with low percentiles in trading across borders and resolving insolvency, despite not recording a single reform affecting the doing business indicators, since being included in the index. On the other hand, the country’s ranking on indicators for protecting investors, registering property, paying taxes and enforcing contracts was relatively low.
I am encouraged by the creation of the new Ministry of Technology and Innovation by the BLP administration. I am unaware of its mandate, funding or make-up, but if it is created to deliver technological solutions to central government with a focus of firstly addressing the ease of doing business index, it is a step that is desperately needed. A fundamental change here will make a tremendous difference in our productivity index.
(George Connolly is CEO of Business Technology Solutions Firm and a former candidate of the Democratic Labour Party.)