The Social Partnership has been urged to create and implement strategies that will help improve productivity among the workforce.
Governor of the Central Bank of BarbadosDr DeLisle Worrell made the point during his presentation at a recent Social Partnership meeting on the country’s progress with the strategy for economic adjustment and growth, a copy of which was obtained by Barbados TODAY.
Worrell said one of the “major” challenges that Government faced was with the implementation of measures to improve efficiency of the public service.
“In recent reports by the World Economic Forum the Barbados Government’s bureaucratic inefficiency is consistently cited as a major drag on the country’s competitiveness and growth prospects,” Worrell said.
He added that the report also showed that second to the bureaucractic inefficiencies were poor work attitudes in the labour force, with 70 per cent of workers not fully engaged in their work.
“All that is necessary is for each worker to be fully engaged in their work. If each of us is engaged, we will not only be helping our country’s growth and our own future prospects, but we will also find our lives more enriched by having developed a passion for what we do,” said Worrell.
“There is a need to improve labour productivity throughout the economy. A gap has opened up between the cost of labour and the productivity of the average worker over the past two decades. The Social Partnership must devise and implement deliberate strategies that will improve productivity,” urged Worrell.
He said Government would need to barrow to finance its deficit, which stood at about 6.6 per cent of Gross Domestic Product (GDP) at the end of March.
And while pointing out that forecast expenditure of $1.7 billion on hotels, tourism projects and infrastructure was confirmed over the next three years, Worrell said another $1.5 billion in projects was “being discussed”.
“The Barbados Government has established its commitment to fiscal consolidation, reducing the deficit from 12 per cent of GDP in 2013 to under seven per cent last year and setting a target of four per cent this year. However, the deficit must be further reduced in future years, in order to reduce the ratio of debt to GDP.
“Government will need to borrow to finance the deficit, adding four per cent of GDP to the debt stock this year. With real growth expected at just about one per cent and very low inflation, the GDP will likely increase by less than four per cent, and there will therefore be an increase in the debt to GDP ration,” he explained.
He said over the last two and a half years Barbados had offered the world “a textbook illustration” of how a small economy that depends on foreign exchange for its prosperity adjusts when those foreign exchange levels declined.
Worrell noted that growth was being led by the products and services that the island produced at internationally competitive prices including tourism and related services, international business and financial services, rum, chemicals and other exports, as well as green energy.
“The foreign exchange earned and saved by these activities provides the finance for the wide range of imports the economy needs,” he said.