The island’s premier financial institution, which is tasked with developing monetary and fiscal policies for the country’s economic development, says the ongoing retrenchment of public sector workers may be a bitter pill, but it has to be taken.
Governor of the Central Bank of Barbados Cleviston Haynes said Government needed to cut its expenditure, which meant that sending home some public servants was a critical component.
Responding to questions during the November luncheon of the Barbados Chamber of Commerce and Industry (BCCI) at the Barbados Hilton Resort on Wednesday, Haynes said while the retrenchment was not popular it was necessary if Government was to cut back on its spending.
“It is difficult medicine but medicine that we have to take,” said Haynes.
“Not everything is going to be popular but it is part of what needs to be done in order to restore the fiscal discipline that is necessary,” he said.
Under its ambitious Barbados Economic Recovery and Transformation (BERT) programme, the Mia Mottley-led administration has started a process of laying off public sector workers while carrying out other major reforms of state-owned entities.
Government, which is said to employ some 25,000 public servants, said it was hoping to cut about 1,500 jobs, while indicating that measures were being put in place to retool, retrain and enfranchise some of those workers. Some public sector workers have also opted for voluntary separation packages.
Stating that BERT was designed to help Government reduce its deficit and borrowing requirements, Haynes said it was critical that Government’s expenditure was cut “in such a way that we are able to meet payments on a timely basis”.
“No one wants to lose their job. It is, at this stage, something that really cannot be avoided,” he said.
“What we have to look at is how quickly can we reposition the economy to generate new jobs, to get new investments . . . What we will have to do is try to make sure that those persons who are impacted in the short-term, are not allowed to fall through the cracks. We have to look at our social safety net to see the extent to which we can protect such persons. But it is going to be difficult to maintain all of the jobs in the public sector during an adjustment programme,” he explained.
Looking back at the 1991 economic situation, which resulted in a cut in salaries as well as thousands of job losses, Haynes said that was very painful “but we were able to recovery from that”.
“I think this time around the number of job losses appears to be less significant and I think that we do have it within ourselves, once we get the new investments going, to be able to create new jobs that will be able to absorb many of those who are being displaced at this time,” he said.
Governor Haynes said he was aware that there were a number of new investments in the pipeline mainly in construction, which were scheduled to come on stream during the next 12 to 18 months. This, he said, would hopefully generate jobs in several areas that some of the retrenched workers could benefit from.