A seven-point prescription for the economy is the correct one to bring about three-per cent annual growth after a stalled decade, insists former Governor of the Central Bank of Barbados Dr Delisle Worrell.
“I maintain that my seven recommendations taken together, are the correct prescription for addressing the ills of Government obesity and poor performance,” Worrell said in his October economic letter.
If his strategy is followed, he argued, it would unlock a potential three per cent growth rate and set the country on the path to even greater future prosperity.
Worrell, who was fired in late February last year by then Minister of Finance Chris Sinckler, recalled that in his January economic letter, he proposed the measures to eliminate bureaucratic delays, improve public services and reduce Government’s spending, to avoid over-burdening taxpayers.
“The cornerstone is a makeover of the public sector to be implemented over three years to eliminate Government’s operating deficit and to achieve measurable improvements in public sector productivity. In May, I suggested the first steps should be to institute a functioning system of timely publication of annual reports by every Government agency, department, ministry and state corporation,” said Worrell.
Last month, he called for new leadership in the public sector and a massive reduction in its workforce.
“The required makeover will eliminate numerous obsolete processes and procedures, and the personnel that are associated with them. Higher levels of skills and expertise are required. To attract people of the right calibre, better salaries must be offered. All this must be achieved within a lower overall spending limit,” the former Central Bank boss said.
It is his view that Barbadians are already paying too much for public services that are deteriorating.
“To achieve the necessary reduction in a way that minimizes economic difficulty, I recommended that retrenchment be planned over three years with about 1,500 separations each year. No one would be left empty-handed. Retrenchment should be funded through negotiation with the IMF [International Monetary Fund] and other international agencies,” he stressed.
Worrell is also recommending that cash grants should be used to reward public servants who volunteered for separation. He also contended that long-serving officers should be allowed to retire early without loss of pension.
“In addition, there should be retraining programmes, family counselling and a safety net for exceptional cases. I also recommended divestment of carefully selected assets,” he added.
The ex-central banker also identified the Bridgetown Port and the Grantley Adams International Airport as primary candidates for privatization. He suggested that the Government could provide a significant fillip to the economy by leasing these two entities to major international operators.
“Such companies would have the finance and expertise to upgrade our port and airport to an international standard. They would fit Barbados into their global network, attracting business far beyond the reach of the Barbados Government,” Worrell said in his October economic letter.
Turning his attention to a restructuring programme, he noted that the Government has been trying, unsuccessfully, to reform itself for more than two decades.
He therefore recommended that the centrepiece of a structural adjustment programme, to be negotiated with the IMF, should be conditionalities on the implementation of fiscal reform.
“There should be an agreed list of specific actions to be undertaken by Government and state-owned enterprises. They would include targets for the reduction of subsidies to state enterprises, targets for the publication of annual reports, targets for the privitization process and targets for the delivery of public services,” Worrell stated, adding that every quarter the targets should be reviewed and disbursement of funds should be approved only if the targets had been met.
Worrell’s focus then switched to the “healthy” private sector, whose efforts, he contended, should be giving Barbados three per cent growth.
“To unlock this growth, action should be taken to remove bureaucratic barriers and to reduce Government to a size our taxes can support,” he insisted.
Much of Worrell’s recommendations seem to mirror a noticeable portion of the Barbados Economic Recovery and Transformation (BERT) programme – except for his suggested 4,500 job cuts over three years.
Government, in a deal with the IMF for US$290 million, has started to send home 1,500 workers this fiscal year with less than 1,000 more expected in the next financial year. It has also announced a massive retraining programme, identified several state enterprises for restructuring or divestment and initiated a programme to modernize the public sector and improve the ease of doing business.