Building boom exposes worker shortage, reliance on foreign labour

Economist Jeremy Stephen has described the first 100 days of the Mia Mottley administration’s third term as “performing as expected”, arguing that intense global instability and macroeconomic pressures have forced the administration into a defensive stance, sidelining several of its optimistic campaign promises.

Stephen told Barbados TODAY that evaluating the government solely on its campaign manifesto was impractical given the rapid deterioration of the global geopolitical landscape, including persistent volatility in oil markets and shifts in international relations.

​”Most of the campaign promises that they would have brought about leading into the election at the beginning of the year would not have [been] taken into reality,” Stephen said. “To compare the first 100 days to what the campaign promises were is a bit unfair to them in and of itself. A lot of the policies that they had were more to promote growth, whereas it made more sense to be defensive.”

​Stephen highlighted specific international pressures, such as the ongoing tensions surrounding the Strait of Hormuz, which have disrupted global energy assumptions and driven up local fuel prices despite budgetary projections pointing toward stabilisation by May. He noted that while a defensive strategy may cause “immediate pain,” a small open economy like Barbados has very little choice when navigating global turmoil and shifts in major foreign administrations.

​The economist also strongly dismissed criticism of a lack of economic diversification in the administration’s first three months, calling the expectation of rapid structural reform fundamentally unrealistic.

​”There’s no economic diversification that could be attained in 100 days,” Stephen said. “Any government that promises that is stupid, to be honest. 100 days is too short of a time to see meaningful change, and even setting up the institutions which are supposed to guide the actual diversification. The act of diversification itself is something that takes years to even make your first major mistake, I’m not even talking about success.”

Instead, the economist advised that voters should evaluate the government over a longer horizon, looking for robust legislative frameworks and institutional guardrails by the second or third year of the term.

​Despite macro-level hurdles, Stephen acknowledged that the local economy is seeing aggressive activity in specific sectors, particularly construction and tourism. He compared the current pace of local construction to the historic boom Barbados experienced between 2004 and 2007 ahead of the Cricket World Cup, though he observed that today’s growth is more heavily tethered to tourism infrastructure.

​However, this rapid expansion has brought its own domestic challenges, notably a severe shortage of Barbadian workers that has led to an influx of regional and international labour.

​”I spoke to a major construction player in the country up to yesterday at lunch, and the issue that they’re having is an employment issue,” Stephen revealed. “They’re not finding enough local employment. You’ve gotten Mexicans, Colombians, all kinds of Spanish speakers in Barbados, on top of the CARICOM nationals that have been brought in. It’s a case where you’re getting an unintentional displacement of the Barbadian worker while the industry itself is growing tremendously.”

​Looking ahead toward the administration’s broader strategic vision, Stephen expressed deep scepticism regarding the viability of the government’s long-term “Mission 2030” targets. 

He cited a highly volatile international environment, the unpredictable trajectory of US foreign and economic policy, and the rapid, unregulated proliferation of Artificial Intelligence as major disruptors that local planners are failing to adequately anticipate.

​”I really don’t believe that most of what they think can be attained by 2030 will happen,” Stephen warned, pointing out that domestic labour laws have yet to evolve to protect workers from technological displacement.

 “As long as it doesn’t take in these realities, those targets are not going to be attainable. We can control how we react to things; we can’t control economic phenomena.”

(RR)