EDITORIAL: Improving productivity

IT is not difficult to understand where Barbados went wrong with this productivity thing. Having in the early 1990s embarked on a programme to improve productivity with the creation of the National Productivity Council, today Barbados is plagued by low productivity and absenteeism that are threatening the viability of the economy. 

The rationale back then was to link pay increases to productivity improvements. The country was well on the way and with a Social Partnership in place it was the right mix for lifting progress and ensuring that the economy remained on course for sustainable growth. That growth did occur between 1993 and 2000. 

 

However since that time productivity seems to have gone through the window and the programme that was started in the early 1990s does not have the enthusiasm as was the case back then. This situation is quite normal because in good economic times one does not pay attention to such issues as the need to improve productivity, simply because there is no need for it. Pay increases are granted based on the movement of prices in the economy and when the economic environment is such that businesses are doing well and Government does not see the need for such.

It is only when the situation gets dire that improved productivity is considered.

 

To its credit, the Productivity Council has done significant work as it set up systems through which productivity can be measured. It has held a number of seminars/workshops to also heighten awareness about productivity and what it entails.

 

The economic growth which occurred between 1993 and 2000 was interrupted by the impact of 9/11 that resulted in economic declines in 2001 and 2002. Growth resumed in 2003 until 2008 before the onset of the global economic crisis and the devastating effect it has had on both small and large countries. Not surprisingly, that has led to productivity being placed once again on the front burner.

 

It has become a concern for public and private sector leaders who believe that productivity improvements tend to drive the country’s competitiveness in today’s fast changing world and competitive environment. Competitiveness is about selling goods and services at prices which compare favourably with those offered by competing businesses. This is what industries/countries around the are striving to achieve. Increasing labour productivity is at the heart of Barbados’ development strategy, said a leading public sector official. It will enable us to become even more successful in an increasingly competitive international market. It will also allow workers to share in the fruits of that increased competitiveness.

 

The subject occupied the attention of the panelists in last Thursday’s night Economic Forum. Participants took turn in discussing the subject, noting that it is something that has to be tackled urgently if Barbados is to return to growth and economic prosperity. This has to be both a priority and a project for those involved. It was dealt with also in the context of the Doing Business survey, which has positioned Barbados at 119. That survey, which is undertaken by the World Bank, highlights other features like lack of Business facilitation, inadequate financing for business start ups, and, among other things, Government Bureaucracy as issues that need to be addressed.

 

So, if the country is serious about improving productivity then it has to get cracking. There must be no more delays.