The island’s largest public sector union has hinted that it was prepared to accept some job losses – although it said its preference was there be no cuts at all – as the Mia Mottley-led administration seeks to steady the economic ship.
The National Union of Public Workers held “cordial” talks with the International Monetary Fund (IMF) yesterday, in which it made its position clear that any job losses must be kept to a minimum, NUPW President Akanni McDowall revealed.
“We met with the IMF . . . . The discussion was cordial, and we emphasized the point that we were trying to minimize, or if not prevent, job losses,” McDowall told Barbados TODAY this morning.
“We indicated to them that we were more concerned about the social aspect of the economic recovery. We told them that the way forward for us was to maintain those social aspects while ensuring that the country gains revenue,” he stressed.
However, despite being satisfied with the case that was made to the lending agency, from which Government is seeking a bailout, McDowall was not confident that the IMF would consider any of his concerns.
“I don’t want to say that we would have impressed upon them any of our positions because that’s anecdotal. However, at the end of the day we would have made the union’s position clear, and they would have listened intently. So, let’s hope that they would have internalized what we were trying to impress upon them,” McDowall said.
The NUPW president also revealed that the union had indicated in no uncertain terms that it was against the privatization of public services, a position which runs counter to that of the lending agency, which has repeatedly recommended shedding Government assets, most recently in its 2017 Article IV report.
“There were not any hard-line positions, but we told them that our aim was to maintain a high quality public service. We also told them that we were not in favour of privatization as was indicated in several IMF reports. In their last Article IV report, the IMF indicated that several public entities could be privatized. We were adamant that the public sector must maintain the responsibilities that it already has. We don’t hold the view that the private sector is more efficient than the public service,” the union boss told Barbados TODAY.
In the IMF’s 2017 Article IV report on Barbados, which was released by Prime Minister Mia Mottley two days after her Barbados Labour Party swept the May 24 general election, the Washington based institution said “while there is significant progress in reducing the high fiscal deficit, the Government will fall short in meeting the ambitious fiscal adjustment targets set in the May 2017 Budget” which was delivered by then Minister of Finance Chris Sinckler.
“The adjustment, if maintained, will lead to a decline in the debt-to-GDP ratio, but debt will remain unsustainable. Further delays in privatization will lead to a continued decline in reserves, while large financing requirements remain a serious challenge,” the report stated.
The IMF said the fiscal adjustment should focus on reducing expenditure, centred on cutting transfers by reforming state-owned enterprises and public pensions. It said the revenue effort should continue by broadening the tax base while increasing the overall progressivity of taxation.
“Strengthening the business climate and competitiveness would support economic growth. Eliminating reliance on the Central Bank financing of the Government deficit would make monetary policy consistent with maintaining the peg,” the IMF said.
Reflecting on the impact of a prolonged recession following the global financial crisis, and inadequate fiscal policy, the IMF noted that Barbados was contending with large fiscal deficits, high debt, and low reserves.