Things can become very messy if the Government does not utilise the tripartite approach to a proposed wage restraint plan for public servants for the negotiation period 2017 to 2020, leading economist Dr Ralph Henry said yesterday.
Henry made the comment in response to questions on the issue after Finance Minister Colm Imbert announced the plan during an International Monetary Fund forum yesterday.
Referring to the consequences of the wage freeze of the late 1980s, when then National Alliance for Reconstruction (NAR) government, in its first budget in 1987, froze public servants’ wages and suspended Cost of Living Allowance (COLA) after a drastic fall in oil prices, Henry said, “Without the tripartite approach, it can become very messy. It’s absolutely important to have that platform.”
Imbert’s proposal is coming at a time when energy sector revenue has dropped from $21 billion to $5 billion for the 2014/2015 period due to low oil prices, forcing Government to cut state expenditure across the board.
In the 1980s, Henry, a very active member of the Public Services Association, was chief negotiator for six public sector unions.
He was also chairman of the Minimum Wages Board and Industrial Development Board and was a “kind of advisor” to the NAR government, he said. He is now chairman and a founder/shareholder of Kairi Consultants, a group of former University of the West Indies academics who do work in the Caribbean and Southern Africa.
Asked if he felt a wage freeze in the public sector can have consequences like it did in the 1980s, when prolonged protests by public servants over the wage freeze and COLA cut culminated in a bloody attempted overthrow of the NAR government by Jamaat-al-Muslimeen insurrectionists in 1990, Henry said, “I don’t think workers would not react negatively. And that’s not in the best interest of the country.”
Asked how bad reactions to the current proposal could be, he said, “It will depend on how angry the labour movement gets. People would be upset if things are not in place, suggesting everybody is involved in feeling the pain and sharing the sacrifices and any benefits that may come in the good times.
“It should not be a case of workers making cuts and managers getting fat and expanding. Other players in the private sector have to show that they are also making cuts.”
Henry said Barbados was experiencing a similar situation to T&T in the 1980s, but when they saw what happened here in July 1990, they adopted the tripartite approach in which government, labour and the trade unions got together to manage the situation. Comparing the wage freeze period of the 1980s with the present one, he said the situations were similar but it was worse in the past.
“The difference between then and now is there was a fiscal crisis in the 1980s. Reserves were quite low and the government could not service its international debts. Now, we have reserves, but we have to be careful about frittering it away.”
The Government has already dipped into the HSF, withdrawing $2.5 billion. But according to Henry, they did this in accordance with the rules which allow them to withdraw funds from the HSF if oil and gas prices fall below a certain level.