Migrant Workers

Despite the happy talk of the administration, the current model of development might not be enough to carry Guyana into the future. Guyanese workers are just not earning enough to keep them happy and to keep consumption levels where they are without the substantial help from family and friends abroad.  The government has been reporting positive growth for the last three years but that growth has not translated into lower levels of unemployment, leading some critics to describe the growth as jobless.  The problem might be related to something that the administration has begun to talk about but was unwilling to admit openly until recently.  At the National Competitiveness Summit held in late September 2011, the President referred to the need to attract foreign workers to Guyana.  The issue was brought up recently also by the Minister of Agriculture in a reference to competing contracts from two foreign companies to manage the Skeldon Sugar Factory.  Though phrased differently, the Minister of Finance also appeared to be directing the attention of Guyanese to the problem in his budget speech earlier this year.  In assessing these three statements, it is likely that the administration might be preparing Guyanese for a policy on migrant workers without seeking to admit that its own workforce development policy has failed.

Structural Unemployment

LUCAS STOCK INDEX The LSI edged up by 0.82 percent in trading this week. The stocks of Banks DIH (DIH) and Guyana Bank for Trade and Industry (BTI) rose 4.17 percent and 1.77 percent respectively while that of Demerara Distillers (DDL) remained unchanged. Despite the positive movement, the spread between the index and the risk-free Treasuries due to mature in December 2011 remained below 20 percentage points.

It is not clear that Guyana has the jobs to absorb the large army of unemployed but with many investment projects reportedly in the pipeline such as manganese, gold mining, and oil production, all requiring specialized skills, there may be signs of severe structural unemployment emerging.  Publicly available studies of Guyana’s current labour market are not readily available but it is more than likely that the problem already exists.  Most of the highly skilled workers of Guyana have left the country in search of a better life abroad.  With the highly skilled portion of its workforce already below 10 per cent, one IMF study revealed that Guyana had lost about 89 per cent of its tertiary-educated labour force.  Despite the existence of a free-market economy and changes to the country’s trade laws that also allowed for the free movement of capital and goods, the majority of highly-skilled Guyanese were unwilling to remain and work at home.

Motivating Factors

Data on migration from Guyana is spotty but a factor that is often cited in conversations with migrant Guyanese is safety and security.  As unscientific as the inquiries might be, the anecdotes suggest that crime continues to be a major motivating factor for Guyanese to leave the shores.   Whether the numbers published by the Bureau of Statistics are complete or not, there is a strong perception among the public that crime is out of control, and has been so for a long time.  As much as crime plays a major part in the migration calculus, regional studies point to a series of factors that appears common to all countries in the Caribbean Single Market and Economy (CSME).  A study on migration mentioned in the online publication Public Services International points to several other factors that were driving Guyanese and Caribbean professionals from their homeland. These included poor working conditions, poor management practices, lack of mobility and low salaries.  The same report also ascribes blame to the recent global agreements that support free movement of skilled workers across borders.

Preferred Course of Action

Whatever the reasons, it looks as if the administration is now grudgingly prepared to acknowledge the problem publicly.  In assessing the statements of the President and those of his Ministers, the preferred course of action seems to be to hire foreign workers.  The urgency of the matter might be driving the administration in that direction.  Resolving the workforce problem might not be as cut and dried as it appears at first blush.  The issue for the administration remains how to compete in a global labour market where far more countries offer better compensation packages than Guyana.  Judging from the comments of the President at the National Competitiveness Summit, the administration prefers to place its bets on foreign workers and not on Guyanese.

Opposed

Placing emphasis on a policy of importing foreign workers can hardly be considered consistent with the expectations of Guyanese workers themselves and would be a downright disappointment to them.  It is probably the reason the President accused Guyanese of being opposed to the presence of foreign workers in Guyana, even though their presence has never been problematic.  If that is so, the position of Guyanese would be quite understandable when placed in the context of the human development policy of the administration.

Cost

Foreign workers were unlikely to come to Guyana unless the premium on their opportunity cost was substantial.  Therefore, the cost of importing highly skilled foreign workers cannot be cheap and would be more expensive than paying better wages to Guyanese, improving their working conditions and making them feel safer and secure at home.  In a non-transparent labour market like Guyana, that could mean anything.  Many of these decisions on compensation would be made by the private sector and with the cost of attracting foreign workers expected to be exorbitantly high, only industries with high abnormal profits might be able to do so.  Gold mining, oil exploration and production, and communication are the industries that stand out.  Other industries, especially in manufacturing, will probably have to depend on government support or fiscal incentives to be competitive in regional and global markets.

Option

The other human development choice before the country is invest more in teachers, schools and institutions of higher learning.  This option requires higher levels of spending than currently exists.  Two-thirds of the spending on education is done by the government.  It might be necessary to increase that share to 75 per cent as it is with the health sector.  Whether foreign workers come or not, resolving the human development problem in Guyana cannot be achieved by crowding out private investment in this area.  The dilemma reveals the need for a much more coherent policy on workforce development.  The situation points to the need for fiscal incentives to spur private investment in education and specialized skills development.

It is unlikely that either option by itself would solve the problem.  There would have to be an accommodation of both.  Guyanese have always welcomed foreign workers and that attitude is not expected to change, despite the critical views of the President.  However, a failure to modify the current human development strategy and living conditions in the country could render both options impotent, and
severely limit the current model of development.