Employment Employment Stories in the Stories in the English Speaking English Speaking CaribbeanCaribbeanRalph HenryRalph HenryKairi Consultants LtdKairi Consultants LtdOctober 21, 2004October 21, 2004

Characteristics of Caribbean Characteristics of Caribbean EconomiesEconomies

Smallness and small market sizeSmallness and small market size Lack of diversificationLack of diversification Imports and Exports high, relative to GDP – Imports and Exports high, relative to GDP –

highly open economieshighly open economies Reliance on limited range of products and Reliance on limited range of products and

servicesservices Lack of competitiveness and reliance on Lack of competitiveness and reliance on

preferencespreferences Technological dependenceTechnological dependence Vulnerable to trade shocksVulnerable to trade shocks

Caribbean Development Caribbean Development and Employment Creationand Employment Creation

Lewis’s DilemmaLewis’s Dilemma

Solution SetSolution Set Capital and Entrepreneurship from Capital and Entrepreneurship from

abroadabroad Markets in metro-pole and brought by Markets in metro-pole and brought by

foreign capital itselfforeign capital itself Low wage and the virtuous circleLow wage and the virtuous circle

Growth of Employment Barbados (1970-2001)

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Year

Barbados Growth

Growth of Employment Jamaica (1975-2001)

-8.0

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

Year

Jamaica Growth

Growth of Employment Trinidad & Tobago(1970-2001)

-6.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Year

Trinidad & Tobago Growth

Labour Market FeaturesLabour Market Features

Endemic unemploymentEndemic unemployment

Labour Market does not clearLabour Market does not clear Trade Unions and stickiness of wagesTrade Unions and stickiness of wages Institutional structures and labour markets Institutional structures and labour markets Labour and Politics Labour and Politics Labour market segmentationLabour market segmentation Reservation wages – mineral export sector, workers can ‘afford’ Reservation wages – mineral export sector, workers can ‘afford’

unemploymentunemployment

Metropolitan lifestyle and links to Metropole determining wage Metropolitan lifestyle and links to Metropole determining wage goodsgoods

Economic StrategyEconomic Strategy

ISIISI Agricultural DiversificationAgricultural Diversification Nationalisation and Commanding HeightsNationalisation and Commanding Heights Economic IntegrationEconomic Integration Labour intensive technologyLabour intensive technology Export promotion – EPZs, and international Export promotion – EPZs, and international

division of labour, segmentation – garments division of labour, segmentation – garments and assembly operations and assembly operations

Tourism led growthTourism led growth State sector employment and SEPState sector employment and SEP

Stabilisation and Structural Stabilisation and Structural Adjustment ExperienceAdjustment Experience

Attempt at FlexibilisationAttempt at Flexibilisation Retrenchment and Reduction of State Retrenchment and Reduction of State

EmploymentEmployment Getting prices rightGetting prices right Informalisation of workInformalisation of work Technological ChangeTechnological Change

Industrial Strategy and Industrial Strategy and Existing TradablesExisting Tradables

Jamaica – bauxite/alumina, bananas, sugar, light Jamaica – bauxite/alumina, bananas, sugar, light manufacturing, data entry, tourism, underground manufacturing, data entry, tourism, underground economy and informal sector, musiceconomy and informal sector, music

St. Lucia – bananas, light manufacturing, data entry, St. Lucia – bananas, light manufacturing, data entry, tourism, tourism,

Barbados – sugar, light manufacturing, information Barbados – sugar, light manufacturing, information processing, tourism, other servicesprocessing, tourism, other services

Trinidad and Tobago – oil and gas, manufacturing and Trinidad and Tobago – oil and gas, manufacturing and regional markets, financial services, sugar, musicregional markets, financial services, sugar, music

Intervening InstitutionsIntervening Institutions

Conflict management and labour marketsConflict management and labour markets

Industrial Court in Trinidad and TobagoIndustrial Court in Trinidad and Tobago Tripartite Accord in BarbadosTripartite Accord in Barbados Open conflict – political taintOpen conflict – political taint

People response – Transnational household – People response – Transnational household – remittances, migration (intra and extra-remittances, migration (intra and extra-regional, eg. nursing for migration) music and regional, eg. nursing for migration) music and culture, informal sector, underground economyculture, informal sector, underground economy

Role and Response of Role and Response of GovernmentGovernment

The Bigger State – subject to revenueThe Bigger State – subject to revenue SMEsSMEs SEPs: function of government revenues – SEPs: function of government revenues –

Unemployment Relief Programme (URP), Unemployment Relief Programme (URP), CEPEP and OJT for youth, and MuST for 18-CEPEP and OJT for youth, and MuST for 18-50, in Trinidad and Tobago – sustainable with 50, in Trinidad and Tobago – sustainable with high revenues from gas and oilhigh revenues from gas and oil

Human Resource Development with wide open Human Resource Development with wide open doors to post-secondary education and training doors to post-secondary education and training in Barbadosin Barbados

Lessons or Moral of StoryLessons or Moral of Story

Employment generation by diversifying and Employment generation by diversifying and strengthening tradable sector - HRD strengthening tradable sector - HRD implications therefromimplications therefrom

Difficult to avoid mechanisms to share work in Difficult to avoid mechanisms to share work in the short term, including using SEPsthe short term, including using SEPs

Managing remittances and savings, including Managing remittances and savings, including ‘in-shoring’ savings from abroad, and ‘in-shoring’ savings from abroad, and redraining brains, and market penetration by redraining brains, and market penetration by migrants abroad eg music and culturemigrants abroad eg music and culture

Empowerment through human resource Empowerment through human resource development rather than certification of labourdevelopment rather than certification of labour