Local private sector, labour, voiceless in national response to crisis
The looming regional economic crisis linked to the collapse of some of the key financial edifices in the United States can be traced directly to flawed political decision-making by Caribbean leaders who departed from agreed economic policy directions rooted in self-reliance that were mooted in the region “more than thirty years ago,” according to General Secretary of the Caribbean Congress of Labour (CCL) Lincoln Lewis.
And according to Lewis the job losses that have already begun to occur in some Caribbean territories will continue as the crisis deepens and could trigger serious social upheaval unless governments embrace a genuine social compact with the regional labour movement.
“If we reflect on the nature of the economic crisis facing the region it becomes clear that, in large measure, it has its genesis in the failure of governments to carry through with policies like economic self reliance, South-South cooperation and diversification of our economies. Rather than pursue polices rooted in self-reliance what we have done is to make our economies even more dependent on countries like the United States,” Lewis told Stabroek Business.
“Rather than actively pursue those regional food security proposals that had been mooted as long ago as the post independence period of the early 1970s, most Caribbean countries proceeded to create a dependency that was linked to food supplies from the metropolitan countries. Now that our imported food bill has gone through the roof we are now scrambling as a region to do what we should have done a few decades ago,” he said.
According to Lewis the Jagdeo Initiative to accelerate food production in the region by attracting local, regional and foreign investment to agricultural projects resembled a “better late than never” response approach. “However well-intentioned that initiative is, it offers no definite assurances of success, since its success depends on attracting large amounts of investment capital at a time when international financing is scarce. President Jagdeo himself conceded a few weeks ago that the supply of investment capital for major projects is likely to shrink dramatically in the face of the current crisis,” he added.
And the CCL General Secretary said that he shared the concern expressed recently by Guyanese economist Dr Maurice Odle at a recent forum organized by the Georgetown Chamber of Commerce and Industry (GCCI) that the primary products produced by countries like Guyana will “take a beating” on the international market as a result of shrinking demand, particularly in the United States.
“Once again the consequences of shrinking markets point to the folly of aborted development plans mooted in the region several years ago for a shift away from primary products to manufactured goods. After all those years Guyana, for example, still produces raw sugar, raw rice, raw timber and raw bauxite. The lack of competitiveness of our products on the world market reposes largely in the fact that we have not done anything about adding value to those products,” he said.
And according to Lewis the crisis confronting Caribbean economies also suggests that, among Caribbean countries, there was never any real commitment to the concept of South-South cooperation. “How many trade delegations have we sent to countries in the hemisphere? How much effort have we really made to penetrate markets for our products in Latin America? In the case of sugar we have clung grimly to a protocol that allowed that product access to the European market in the absurd hope that it would last forever. The crisis facing sugar lays bare the absurdity of that position,” he added.
Lewis, who predicts that thousands of jobs in the region could be lost in the months and years ahead told Stabroek Business that he believed that the first “real victims” of the crisis will be those Caribbean territories that are most dependent on the fortunes of the US economy. “The writing is already on the wall. In the past few weeks we have heard of substantial job losses in the tourism sector in Antigua and Barbuda and the Bahamas and it is almost certain that more job cuts will follow in that industry. Those are examples of countries that have failed to do anything about diversification from an industry that is totally dependent on tourist arrivals,” he said.
Meanwhile Lewis told Stabroek Business that the potential “social fallout” from the anticipated job losses has created a new and urgent challenge for the regional labour movement for which it is “decidedly unprepared.” He said that the lack of preparedness was due in part to weaknesses within the movement but was also attributable to the fact that many Caribbean governments failed to take the idea of a social compact involving labour, the private sector and government seriously. “The value of that social compact was that it would have laid the basis for a collective response to the crisis that we face today in terms of addressing both the economic and social dimensions to the crisis. Unfortunately, the experience in some Caribbean countries, including Guyana, is that social partnership was about political grandstanding and photo opportunities,” Lewis said.
According to Lewis the idea of a social partnership in Guyana collapsed because government took the position that it wanted to occupy every space across the social strata. “The truth is that here in Guyana the government did not want a social compact, it did not want an independent labour movement, it did not want an unfettered private sector that was free to create wealth and provide jobs; what the government wanted was to make decisions and have the other social partners embrace those decisions,” he added.
The CCL General Secretary told Stabroek Business that he believed that while the business sector in Guyana “has obviously chosen to make discreet noises about the Value Added Tax” it was obvious that the tax remained “a source of great concern and frustration to the private sector” since what it has done is to make the cost of real investment much higher. “The imposition of VAT, at least at the levels at which it has been set, is not only a disincentive to the growth of the business community; it is an easy option that derives directly from a porous tax net that allows for massive tax evasion,” the CCL General Secretary said.
And according to Lewis “the sidelining of the Guyana Trades Union Congress and the success of the government in securing a compliant private sector” could prove counterproductive in terms of Guyana’s response to the global economic crisis. “What is necessary in a situation such as this is that the response be allowed to benefit from inputs by both the labour movement and the private sector. That is not the case. What is labelled consultation is no more than playing politics, since those purporting to represent labour clearly do not speak for the workers, while the private sector, concerned perhaps that their businesses will be affected if they voice their true feelings, has assumed a posture of near total compliance with the dictates and wishes of government.”
