Employment Stories in the English Speaking Caribbean Ralph Henry Kairi Consultants Ltd October 21, 2004

Characteristics of Caribbean Economies  Smallness and small market size  Lack of diversification  Imports and Exports high, relative to GDP – highly open economies  Reliance on limited range of products and services  Lack of competitiveness and reliance on preferences  Technological dependence  Vulnerable to trade shocks

Caribbean Development and Employment Creation  Lewis’s Dilemma  Solution Set  Capital and Entrepreneurship from abroad  Markets in metro-pole and brought by foreign capital itself  Low wage and the virtuous circle

Labour Market Features  Endemic unemployment  Labour Market does not clear  Trade Unions and stickiness of wages  Institutional structures and labour markets  Labour and Politics  Labour market segmentation  Reservation wages – mineral export sector, workers can ‘afford’ unemployment  Metropolitan lifestyle and links to Metropole determining wage goods

Economic Strategy  ISI  Agricultural Diversification  Nationalisation and Commanding Heights  Economic Integration  Labour intensive technology  Export promotion – EPZs, and international division of labour, segmentation – garments and assembly operations  Tourism led growth  State sector employment and SEP

Stabilisation and Structural Adjustment Experience  Attempt at Flexibilisation  Retrenchment and Reduction of State Employment  Getting prices right  Informalisation of work  Technological Change

Industrial Strategy and Existing Tradables  Jamaica – bauxite/alumina, bananas, sugar, light manufacturing, data entry, tourism, underground economy and informal sector, music  St. Lucia – bananas, light manufacturing, data entry, tourism,  Barbados – sugar, light manufacturing, information processing, tourism, other services  Trinidad and Tobago – oil and gas, manufacturing and regional markets, financial services, sugar, music

Intervening Institutions  Conflict management and labour markets  Industrial Court in Trinidad and Tobago  Tripartite Accord in Barbados  Open conflict – political taint  People response – Transnational household – remittances, migration (intra and extra- regional, eg. nursing for migration) music and culture, informal sector, underground economy

Role and Response of Government  The Bigger State – subject to revenue  SMEs  SEPs: function of government revenues – Unemployment Relief Programme (URP), CEPEP and OJT for youth, and MuST for , in Trinidad and Tobago – sustainable with high revenues from gas and oil  Human Resource Development with wide open doors to post-secondary education and training in Barbados

Lessons or Moral of Story  Employment generation by diversifying and strengthening tradable sector - HRD implications therefrom  Difficult to avoid mechanisms to share work in the short term, including using SEPs  Managing remittances and savings, including ‘in-shoring’ savings from abroad, and redraining brains, and market penetration by migrants abroad eg music and culture  Empowerment through human resource development rather than certification of labour