GML ENTERPRISE DESK
Economist Dr Ralph Henry has told Government to begin tripartite discussions as soon as possible with labour and business to seek solutions to the current economic crisis.He said he expects the economy, which is heavily dependent on oil and gas, to continue to perform badly and more job losses could be on the cards.
Dr Henry told the GML Enterprise Desk: "It cannot be that trade unions and workers are asked to bear the brunt of the situation."He described the tripartite framework "is a platform we have to make work" and said unions, employers and Government must look at a wages and income policy.
"Everybody has to see and have a sense of equitable sharing of the burden. We need a platform where everybody sits and recognises the need for some kind of sacrifice," he said.He warned that allowing market forces to determine what happens will mean that "more workers will lose jobs."
The economist and UWI lecturer, who recently served as chairman of the Heritage and Stabilisation Fund, and has been a consultant with a number of regional agencies, including the Inter-American Development Bank, the Caribbean Development Bank, the World Bank and the Caricom secretariat, said T&T is faced with a "very difficult stage in the economic history of the country with the collapse of oil and gas prices."
He said since Government revenue is anchored by 40 per cent earnings from oil and gas and foreign exchange earnings are also reliant on that industry, T&T has "become a regular Caribbean economy," but "unfortunately we lack other sectors to take up the slack." He said the country now needs to look beyond North Atlantic markets and finds new revenue sources.
"One cannot decree diversification and make it happen. There is a period of transition–at least two to three years starting now–otherwise it could take time and large numbers of workers could lose jobs."He said with revenue falling "expenditure will be cut and a lot of firms depending on government contracts may have no choice but to lay off workers." The only way to grow government revenue is from new activity, he said.
"New firms hopefully will still emerge, but workers will have to be trained, markets will have to be identified," Dr Henry said.He said T&T can look at other sectors like manufacturing, tourism, the services sector and finances to "earn our keep." In addition, the state has to ensure there are programmes in place to upgrade the work force.
We face major problems, Dr Henry said, and we need to make a transition. In doing so "everyone must be on board."He said purchasing the ArcelorMittal steel plant at Point Lisas has its own challenges. While the steel workers might be able to operate the facility, can they "compete with China and other places?" he asked.
"Would they be willing to take lower rates of pay themselves? Where will they get capital to run it?"Dr Henry said the key is being able to absorb workers into other sectors but there are no institutional mechanisms in place to do that, or train them for other industries.