Public sector job cuts critical for economic growth
(File Photo) Dr. Delisle Worrell
The year 2018 can be one of prosperity if government makes firm and decisive action to turn the economy around- the most urgent of which is the reform of the public sector.
This was the view expressed by the former Governor of the Central Bank of Barbados (CBB), Dr. Delisle Worrell in his monthly economic letter for January.
While the trade unions continue to pressure government for wage increases for its members, going so far as to call for strike action recently, Dr. Worrell has reiterated his previous calls for civil servants to be laid off.
Outlining the areas which continue to keep the economy down, he noted:
"The outlook for the economy is dire: foreign reserves reported by the Central Bank were only $550 million in September, with over $100 million in foreign debt and interest payments due in the final quarter. The NSRL and foreign exchange fee have fallen short of expectations, and Government continues to spend more than it receives in taxes."
He explained the jobs can be done over a three (3) year period:
"A public sector reform package, to be implemented over three years, to eliminate Government’s operating deficit and to achieve measurable improvements in public sector productivity; - As part of that package, job cuts of about 1,500 per year in the public sector over three years, with separation packages to be funded by seeking financial support from international financial institutions."
Dr. Worrell also pointed other areas which needed to be addressed with haste in order to pull the economy out of its current slump. Such action included a program of divestment of "carefully selected public assets", a cut in subsidies to state-owned enterprises of 10 percent per year for three years as well as final approval and start of major works on all tourism projects that were to have started in 2017.
Dr. Worrell also suggested government undertake negotiations with the International Monetary Fund (IMF), the Interamerican Development Bank (IADB), the Caribbean Development Bank (CDB) and other official and international institutions for financial support for a five year program of structural adjustment.