Saturday, April 13, 2024

STRONG SUIT: The high cost of patronage


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This time last year there was heavy public debate around the competing promises of parties vying to be elected. This year, the discussions are even more intense around a failing economy and how to fix it quickly.
There is an age old adage, “to the victor go the spoils”, and six years ago, there were blatant statements of dividing up the “fatted calf”. The traditional methods of patronage have been in the creation and awarding of jobs. Certainly the previous Government engaged in patronage and after three terms, the electorate decided to correct the imbalance. However, it has not turned out to be a “correction” but further accumulation.
We find ourselves in a situation where the Government must borrow to pay wages to a public sector workforce that is admittedly overstaffed with a record of poor productivity. It is also unable to meet its debts without further borrowing. Our “safety net” of funds collected by the National Insurance Scheme (NIS) was intended to provide unemployment and retirement benefits.
Due diligence
Now it is a source of funding for operational needs and projects that would not meet its normal requirements of due diligence. Technically, the NIS has become a lender of last resort and Government is in default.
Two promises made by the governing party during the election campaign were: no job reduction and the International Monetary Fund (IMF) would not be able to dictate to Barbados. Both are now occurring and many are saying it is long overdue.
The reality of downgrades to Barbados creditworthiness has created a necessity for the IMF to be a guarantor. IMF terms and conditions call for Barbados to demonstrate a level of fiscal discipline that requires a reduction of expenditures. As the employer of 28 000 people, the public wage bill is an inevitable target.
Cutting jobs is probably the most politically and economically sensitive issue in Barbados. The labour unions are extremely vociferous about the preservation of jobs and have managed to obtain legislative reforms that make it very difficult to terminate employees or reduce their compensation.
Against this backdrop, a reduction of 3 000 jobs is clearly a last resort to stave off devaluation of Barbados’ currency.
I submit that patronage, in the form of appointments to positions and creation of agencies and programmes to facilitate employment, is a leading cause of our current economic plight. On the surface, the calculations focus on salaries, severance and other monetary settlements.
There is also the understandable hue and cry about people not being able to manage without a job. However, it is hard to find a financial statement, economic forecast or annual report (if they are filed) that measures the effects of poorly aligned HR practices.
When people come to work knowing that things are poorly organized, it is an emotional chore and saps your willingness and ability to contribute. When recruitment, selection, orientation and performance management are not aligned with key tasks, people cannot be held accountable and leaders cannot make developmental corrections.
Barbados is a small country and the results of these dynamics are heavily criticized in public and in private, which takes an ongoing emotional toll on workers, including ones who are striving to be effective. Others have simply retired on the job and are waiting to be paid out.
The opportunities for savings and new job creation are available. God bless.


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