Amid concerns about the public sector retrenchment process, which forms part of the wider public sector reform, one of Government’s economic advisors is warning that there can be no easing up until the course is fully completed.
In fact, likening the reform to a relay, economist Dr Kevin Greenidge, on loan to the Barbados Government from the International Monetary Fund (IMF) said Government could not afford to drop the baton.
“We cannot afford not to do it. Let’s suppose that we don’t do it, what happens? The IMF withdraws its endorsement and we maybe have to pay it back, I don’t know. But the rest of world would say ‘those people are not serious, all they had to do is their part and they can’t do it’.
“Investors would start to wonder ‘are we going to go back to where we came from? Are we going to get another restructuring, what is going to happen?’ So everything will unravel. We cannot afford to not do our part,” said Greenidge, who pointed out that the number of workers retrenched so far was “below 900”.
He was responding to questions during the annual Christmas cheer of the Society of Trust and Estate Practitioners (STEP) Barbados chapter, at Champers restaurant on Wednesday.
Under the Barbados Economic Recovery and Transformation (BERT) programme, government has embarked on a retrenchment process that will eliminate 1500 jobs from the public sector.
Concerns have been raised about the retrenchment process with some critics saying the last-in-first-out (LIFO) method was not being used.
The Social Partnership had agreed to the LIFO policy, except in cases where it could be shown that its use compromised the retention of existing skills not found elsewhere in the public sector.
Greenidge told the STEP gathering that as far as he was concerned the LIFO method of retrenchment seemed to be the fairest at the moment.
“You need a principle whereby nobody can say they were disadvantaged. In the absence of some key performance indicators or systems that grade people’s performance, how else do you let some person go and say that it is fair? To avoid that one could see where the last-in-first-out principle would have come. It is perhaps not the best but it is perhaps fair to have at the moment. So we have to work within the context of that,” said Greenidge.
Under the recovery programme Government has also set aside a $30 million fund to help “retool, empower, retrain and enfranchise” retrenched workers.
Government is also expected to modernize the public sector through greater use of technology and make state-owned enterprises more efficient.
Continuing to make a case for the restructuring exercise, Greenidge said Barbadians should also expect an improvement in the island’s competitiveness, which would lead to increased investor confidence.
“If we stick to the programme and do what is needed then we can expect an environment where we have low debt going forward, which gives us the fiscal space necessary,” he said, adding that it was critical to have fiscal space in order to put mitigation measures in place to adequately respond to natural disasters.
“We can get 1.5 per cent more growth simply by having less debt, and two, we can get 1.5 per cent growth faster just by easing the way we do business. This is the IMF’s analysis. A lot of our gains would come from just reducing the stranglehold that debt has on us,” he added.