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News - Effects of the Global Economic Crisis on Labour Markets in the Caribbean
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Labour News.


Effects of the Global Economic Crisis on Labour Markets in the Caribbean

VENUE:  Opening ceremony of the Caribbean Development Bank/International Labour Organisation Symposium             on “Addressing the Effects of the Global Economic Crisis on Labour Markets in the  Caribbean and Preparing for Sustainable and Decent Employment: The role of the  Global Jobs Pact"  At the Lloyd Erskine Sandiford Centre on January 25th, 2011

 

 


 

Good morning

 

Let me welcome all of you to this important symposium, and to our visitors, a warm welcome to our shores.  Apart from engaging in robust discussions on the matters before you, I trust that you will have time to relax and enjoy the warm hospitality of Barbadians.

 

The title of this symposium - “Addressing the Effects of the Global Economic Crisis on Labour Markets in the Caribbean and Preparing for Sustainable and Decent Employment: The Role of the Global Jobs Pact", as well as the agenda, are, in the view of  the Government of Barbados, extremely critical at this time, given the current developments within the regional and international spheres. For all of the dialogue and intense discussions that have taken place as to the causes of the crisis, I believe that there is ample room for lively debate as to the effects of this crisis on Caribbean labour markets to date, as well as future effects.  Such dialogue will allow us the opportunity to clearly articulate what systems, policies and programmes we can put in place to ensure that the impact on our labour forces, in terms of displacements and job losses, is kept to a minimum.

 

Allow me at the outset to commend both the Caribbean Development Bank and the International Labour Organisation for their vision in conceptualizing this forum. Indeed let me congratulate Dr. Bourne in particular for articulating the need for such a meeting. This exercise will serve as the platform for generating practical ideas for further developing our labour forces and preparing them for the era of economic recovery that will inevitably arise after the downturn’s harshest effects have subsided. 

 

There is little argument that this crisis has had a debilitating effect on economies across the region, with most of our territories experiencing significant declines in tourism receipts, remittance levels, and foreign direct investment. In addition, the International Monetary Fund notes that real Gross Domestic Product for the Caribbean region declined by three per cent in 2009, and was only expected to grow by an under-par one per cent for 2010.  In analyzing prospects for the region in the October 2010 edition of its World Economic Outlook, the I.M.F noted that:

 

“Growth in most of the Caribbean countries will be subdued amid weak prospects for tourism and remittances and limited room for policy support in light of chronic public debt burdens”

Compounding the adverse effects of the crisis, are several additional threats which we collectively continue to face throughout the region. These include:

  • extreme volatility in the movements of oil prices on the International market;
  • the pervasive threat of increased competition and price cuts for our vital exports such as sugar and bananas; 
  • high fiscal deficits and debt levels; and 
  • severe financial and economic losses resulting from natural disasters such as hurricanes and earthquakes.

Given these challenges to our economies, it is inevitable that there will be direct consequences on our labour markets, as there is a significant relationship between the health of a country’s economy and the dynamism of its labour force. This is a factor that has been readily acknowledged in the I.L.O’s Global Jobs Pact which  has a fundamental objective of providing:

“an internationally agreed basis for policy-making designed to reduce the time lag  between economic recovery and a recovery with decent work opportunities”

 

The Pact recognizes the role of the state in creating the right policy environment to encourage a return to growth.  It also emphasises the role the private sector will play in the recovery and underscores that private enterprise needs to be encouraged and given the confidence necessary to resume activity.  Inherent in this are the key principles that have always guided business, such as efficient markets, adherence to the rule of law, and respect for property rights. It also sends a strong message on the need to avoid protectionist solutions.  In summary, the Pact is a roadmap for the period ahead for the multilateral systems, governments, workers and employers, which will enable each country to formulate a policy package specific to its situation and priorities.

 

Embodied in the Pact is the Decent Work principle, a concept that justifiably places emphasis on the people-centered approach to the globalisation process and the challenges that a changing international environment will bring, examining not only issues of trade, technology, international capital flows, intellectual property rights and market access, but, equally,  other issues such as poverty reduction, gender equality, social security and workers’ rights. 

Based on the Pact, we can confidently report that several recommendations which have been made in light of the crisis are already being pursued by labour stakeholders throughout the Caribbean.  Evidence for this bold statement is provided through a perusal of the I.L.O sponsored Decent Work Country Programmes for several CARICOM territories.

In a review of various decent work country programmes in the region, we are pleased to note that several territories have already made commitments to the pursuit of several of the Job Pact’s policies such as:

  • retaining women and men in employment as far as possible, in particular small and micro-enterprises;
  • supporting Job Creation;
  • protecting persons and families affected by the crisis in particular the most vulnerable;
  • simultaneously acting on labour demand and supply;
  • And equipping the workforce with the requisite skills needed for today and tomorrow.

However, in light  of the problem of limited fiscal space of some Governments to implement counter-cyclical policies and to fund much-needed socio-economic programmes and other measures to effectively address the adverse effects of the crisis, Caribbean countries can readily support the call for International lending agencies to consider providing more funding to assist in the implementation of such policies. 

 

Though collectively we have started on the right track through the formulated country programmes, there are still critical additional issues that we must be prepared to address if we are to not only tackle the effects of the crisis, but effectively prepare for the period of recovery after the crisis has abated. 

 

In the face of the crisis, one immediate response by policy and decision makers (certainly here in Barbados) is to find more job opportunities. However, we must be pragmatic and first ask  ourselves which sectors of our economies will be responsible for generating these jobs? Then in responding to this question, there must be clear guidance given by our economic planners, our businessmen, our investors and our exporters, who are in an ideal position to monitor and continuously analyse trends in the world economy and identify those high growth industries that, with sufficient resources, our countries may be able to penetrate.  This group is well placed to further assist our governments in identifying barriers and gaps that would need to be overcome, in order for our businesses to gain access to these areas. 

 

Once we are provided with a firm picture about the economic sectors that will drive our economies, we must then work to ensure that a suitable macro-economic framework is put in place to facilitate the development of those identified sectors. Arising out of this framework thereafter, must be the identification of a number of employment related policies that are fundamental to meaningful employment creation.  Such policies are outlined in both the Global Jobs Pact and the I.L.O’s Global Employment Agenda and challenge us on the attainment of a number of issues. In using these documents as a guide let us:

  • become more assertive in facilitating foreign direct investment in a number of areas, especially in niche areas like health tourism;
  • aggressively seek employment opportunities that can emanate from trade agreements, especially from the E.P.A and the pending CARICOM Canada negotiations.  This action in turn would necessitate from our end, a clear focus and understanding of the products and services that we would wish to export to overseas markets;
  • create a climate which is conducive to the further development of a vibrant entrepreneurial class which is creative, futuristic and can make a viable contribution to economic activity; and
  • strengthen the capacity of our public employment agencies to source jobs for our citizens in both local and overseas labour markets.

In addition to sourcing adequate employment opportunities for our citizens, we must seek to mould labour forces that are well educated, trainable, flexible and dynamic, simultaneously addressing critical issues pertaining to labour demand and supply.

 

From the perspective of labour demand, we must continuously collaborate with our employers in industry to ascertain the skills sets they desire their employees to have and to ensure that ultimately, such information reaches our major training institutions, in order that they can tailor their training programmes to be reflective of such needs. This information should also be communicated to students at the secondary school level, through presentations and the internet.

 

As for labour supply, the simple, inescapable reality is that employers will want to hire workers who possess relevant skills sets. For this reason, now is the time to place emphasis on diversifying our training offerings, focusing on the competencies of our training deliverers and enhancing the processes of certification of skills sets.  The acquisition by our workers of certification that is recognized locally, regionally and extra-regionally is a challenge, particularly in those occupations where such skill has been acquired primarily by way of on-the-job-training. In today’s world, employers increasingly place emphasis on requisite certification. Therefore our training institutions must place a critical focus on the delivery of competency based qualifications such as National and Caribbean Vocational qualifications which provide the assurance that the holder has demonstrated the skills, knowledge, understanding and attitudes required for their job roles.

 

To date, the Caribbean Association of National Training Agencies has developed Caribbean Vocational Qualifications, which have been approved by CARICOM in areas such as Electrical Installation, Nursery Care, Cosmetology, Carpentry and Training and Assessment. This is indeed positive but as they move forward two critical needs must be addressed:

1.     the need for a physical secretariat for the Caribbean Association of National Training Agencies; and

2.    the need for additional resources to be dedicated to facilitating the ability of training institutions to offer competency based assessments of individuals.

 

Additionally, in light of the heavy focus that needs to be placed on the creation of a facilitating environment for entrepreneurs, we must ensure that all of our training institutions reach the stage where they provide training in entrepreneurship to every student who is desirous of receiving such trainingBy the end of that training, recipients should be well versed in critical areas such as formulating business plans, marketing, research, computer literacy, money management, book-keeping and accounting procedures.

 

At the cornerstone of our efforts to increasingly facilitate labour demand and labour supply however, is the need for accurate and timely labour market information to facilitate more informed decision- making by our students, our job seekers, governments, employers and training institutions.

 

Throughout the years, the need for labour market information has expanded in scope and complexity, from just the provision of simple information on unemployment and labour force participation rates, to the conduct of employment projections and tracer studies. These trends have necessitated that a greater emphasis be placed on the development of labour market information systems and as a result, our labour ministries are increasingly challenged to find adequate resources to devise such systems.  Today, where required information is usually a click away, the information user is more demanding, more informed and wants information in “real time.”

 

To effectively cater to such a user, we must now move towards mechanisms that allow us to produce more sophisticated labour information such as quantitative and qualitative skills projections. These categories of information are already being produced in developed countries such as the United States of America, Australia, Canada and New Zealand. Furthermore, we must aspire to readily provide statistics on monthly job losses and gains by both occupation and the industrial area in which they occur.  The effective production and dissemination of such information is the ultimate goal to which we should aspire.  Other critical types of labour market information that we need to produce as we emerge from the crisis include:

  • occupations coming into our labour markets as recorded by our Immigration Departments;
  • updated Occupational Classification Systems;
  • wages and salary movements over time by Occupation; and
  • longitudinal studies of students. 

Members of the private sector would need to strengthen their commitments with Governments in supplying requested information for input into these systems. Indeed, some information such as tasks and duties associated with specific occupations, as well as levels of remuneration for certain occupations would add significant value to the usefulness and flexibility of these information systems. 

 

Ladies and gentlemen, I can't possibly address this symposium with this  theme, and not discuss social protection for the most vulnerable groups in our societies that may have been disproportionately affected by the crisis. Not only should measures be available to protect such workers, but creative means should also be developed to ensure that they are in a position to make a viable contribution to the societies in which they live. 

 

With the current global financial crisis we have seen bread winners lose their jobs or have their hours at work cut, reducing incomes and effectively pushing some households into poverty, especially against a backdrop of the escalating cost of living. This threatens years of progress made in the Caribbean region with respect to human development and the Millennium Development Goals.

 

As seen from previous crises around the globe, credit tightening, reduction in international aid and contractionary economic forces increase fiscal pressures and compromise expenditure on social services and protection. However, recognizing that social protection is in fact a human right that we all are entitled to, I am encouraged that as a region, we are not willing to make such a compromise.  We know that we have to find the delicate balance between providing incentives for economic recovery and protecting the most vulnerable. We as a region have therefore employed a wide range of social protection measures. Some have increased their minimum wage as a means of protecting the purchasing power of the most vulnerable workers and sustaining overall consumption. As Barbados considers this, and the implications of rising wage costs, we are mindful that such decisions must and will be made in conjunction with our Social Partners.

 

Others have introduced or expanded a number of social assistance programmes such as conditional cash transfers. Such programmes are promoted by the ILO as a critical component of a social protection floor, and where such measures are temporary now, I would want to encourage my colleagues to consider utilizing these measures as permanent features of their social protection framework.

 

Some countries have increased their pensions and extended their unemployment benefits within their social security schemes. I want to encourage the development and strengthening of social security across the region, whether through parametric or structural reforms, to ensure long term financial sustainability and broader coverage. Such systems will not only implement built-in stabilizers to any future shocks, but they will further enhance social protection frameworks across the region and in turn, will be conducive to regionalization efforts and decent work initiatives.

This crisis provides an unanticipated opportunity for strengthening social protection within our respective countries. This is an opportune time to:

  •  encourage more dialogue on addressing social protection issues;
  •  facilitate better policy coordination; and
  • establish monitoring and evaluation mechanisms to continuously assess the effectiveness and efficiency of our programmes.

I do recognize the kind of maneuvering that will be required around limitations such as a narrow fiscal space, limited institutional capacity, and mounting political pressures as our publics cry out over job losses or inflation. But we must be steadfast in our commitment to providing social protection and decent work for all.

 

Finally, colleagues, do not overlook our public employment services. If properly resourced, they can serve to be an integral part of any concerted effort to develop our human resources!  Not only in providing local and overseas employment opportunities, but they can play a vital part in the self-actualization of citizens through employment guidance and counseling and referrals to training programmes. Our employment agencies  must be outfitted to meet the changing times, needs and demands of our nationals. In Barbados, our National Employment Bureau is this year to be enhanced through a restructuring and institutional strengthening exercise.

 

But public employment services must also become more pro-active in creating an awareness of their offerings and must market their services to social and youth groups, community based organizations, guidance counselors and students at secondary schools and student bodies of tertiary institutions.

 

As I close, I believe that the results of this symposium will be very important to all of us; the sharing of ideas, country experiences and alternative points of view. I am also confident that the recommendations that will emanate from this exercise can specifically serve as a blueprint for labour market reform for small open economies such as all of ours.

 

The reports from the sessions that will outline employment-specific policy measures and responses that can be adopted by our countries to combat the adverse effects of the crisis will be valuable, not only to CARICOM entities such as the Caribbean Development Bank and the Council for Human and Social Development, but also to the economic planners, finance officials and labour ministries of each of our territories.

 

I wish us all 2 days of fruitful and enlightening deliberations and anticipate that this exercise will be a resounding success for the region.

 

I thank you.

 

Dr. The Hon. Esther Byer-Suckoo


Published: Tuesday, 25th January, 2011





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3rd Floor West, Warrens Office Complex, Warrens, St. Michael, Barbados | Tel: (246) 535-1400 | Fax: (246) 535-1573 | E-Mail: mol@labour.gov.bb