Two thousand and fourteen was another very challenging year for most employers in Barbados. It is useful for us to take a look back at 2014 and use any lessons derived therefrom to chart our path for 2015 and beyond.
The political environment
The very slim Parliamentary majority now enjoyed by the governing party has, in our opinion, limited the options available to the Government to engage in significant parliamentary debate; this was clearly evident in December 2014 when the Minister of Finance and Economic Affairs, with the support of Cabinet, opted to present a Ministerial Statement on the state of the Barbados economy and deferring the presentation of a substantive Budget debate until April 2015.
The economic environment
The major economic concerns continued to be the expansion of the national debt, to finance current expenditures and the urgent need for tighter fiscal consolidation. These had been identified as far back as 2010 as being the areas most likely to present a drag on economic activity, unless major corrective action was taken.
Even as the economies of our major trading partners have been showing sustained signs of recovery since 2009, our local economic position continued to worsen with continuing declines in tourism arrival numbers and the concomitant decline in foreign exchange receipts. However, it is to be noted that in the final quarter of 2014, signs emerged of an improvement in arrivals from the United Kingdom, a major source market.
Unemployment statistics reflected a marked increase, driven in large measure by the Government’s actions in the first quarter of 2014, when more than 3 000 public sector employees were made redundant as a result of the need to rein in Government’s expenditure to meet fiscal targets. These unemployment numbers were further exacerbated by continuing net job losses in the private sector as the economy continued to contract.
As we close off 2014, we have had to deal with the challenge of having our credit rating suffering a further downgrade by Standard & Poor’s.
The legislative environment
While no new legislation was proclaimed in 2014, two issues of significant note are: Holidays with Pay Bill – while discussions commenced on a new Holidays with Pay Bill in 2013, no further meetings were held in 2014 and there is no indication on when further tri-partite discussions will resume.
Employment Rights Act – while it has been recognised that there are issues which have been identified by industrial relations practitioners and staff of the Labour Department, a promised convening of the Social Partners to discuss the identified issues and challenges is yet to happen; it is hoped that this will be addressed as a matter of urgency in 2015.
Employment Rights Tribunal – the ERT imploded on December 5, 2014, without hearing any cases brought before it for adjudication and this matter has been addressed in earlier comments. It is our hope that the reconstituted ERT will be in place during the first quarter of 2015 and be in a position to commence its substantive work during that period.
The Social Partnership
During 2014 it was expected that the proposed mechanism of quarterly meetings of the full Social Partnership, under the chairmanship of the Prime Minister, would have been brought to bear as we sought to discuss the economic challenges facing us; regrettably, there was no regularity of such meetings.
Unfortunately, the subcommittee of the Social Partners which typically met on a monthly basis under the chairmanship of the Minister of Labour, Social Security and Human Resource Development in previous years, had the number of meetings actually called, significantly reduced for various reasons.
The confederation must at this point, express the hope that the recently announced rationalisations to take place across several statutory corporations, are brought before a full Social Partnership meeting before any decisions are taken on the new structures to be put in place and consequent redundancies.
The confederation, however, restates its commitment to work in the context of the Social Partnership framework as we collectively seek to address the necessary restructuring of the country’s economic model with a view to significantly reduce the cost to the Government of Barbados, while simultaneously growing the economy.
The way forward
As we move into 2015, the most significant national challenges to be addressed are the need to:
Promulgate a coherent, well-articulated set of growth strategies, especially for the tourism, international business and manufacturing sectors; implement a structured short, medium and long-term set of strategic initiatives for the revitalisation of our agriculture sector to ensure our food security, to limit dependence on external producers; rein in the burgeoning national debt; implement tighter fiscal consolidation measures; implement aggressive national strategies to restore fiscal discipline; become more efficient at business facilitation; encourage significant restraint in wage demands; and urgently address the requirements for greater labour flexibility.
Current world economic outlook and forecasts suggest that, while the United States and the United Kingdom are recording sustained recovery, it is unlikely that Barbados’ other major trading partners in the eurozone will reflect sustained economic recovery for another 18-24 months; this can have significant negative impacts on our key foreign exchange earnings sectors of tourism and international financial services.
Foreign direct investment inflows are expected to continue at relatively low levels, further compounding our foreign exchange receipts challenges. While the outlook remains very challenging, we must approach 2015 with confidence in our own abilities to be the change we want to see! Innovation has to be a key pillar in our strategies as the environment around us evolves rapidly and it will be no longer “business as usual”. We must make greater use of and embrace the rapidly changing information and communications technologies.
At the level of the business organisation, greater emphasis needs to be placed on: improving individual and corporate efficiency; improving individual and corporate productivity; enhancing our international, regional and local competitiveness; being innovative in problem resolution; identifying and developing new opportunities to grow economic activity and job creation; working smarter!
To support the foregoing needs, the Confederation offers a menu of services and support facilities which include but are not limited to: training interventions; risk assessments/audits; human resource audits; HR support services.
The confederation’s membership represents employers in all economic sectors from large conglomerates to small and micro-enterprises and we look forward to working with you in 2015 and beyond as we seek to support your efforts to get your organisations ready for the inevitable changes that lie ahead.
The confederation’s continued participation in and contribution to dialogue at the national level with a view to the revitalisation and restructuring of our economy, will guide our advocacy responsibilities in the years ahead.
We must not fear change, but embrace it as necessary for our long-term survival and prosperity. We must adopt a “can do” attitude; nothing is impossible.
Anthony Walcott, executive director of the Barbados Employers’ Confederation
