HISTORICALLY the relationship between capital and labour in the Caribbean has been difficult. The difficulty grew out of a plantation system in which capital was white or near white while labour was predominantly black.
Even today there are still lingering mutual suspicions; suspicions of business as minority controlled, exploitative and price gouging and of labour as unproductive and recalcitrant. Thus, suspicion of private capital renders privatisation a bogey man for political partisans. By the 1970s, labour had secured significant gains against capital, including minimum wage legislation, holidays with pay, workman’s compensation, etc. It could be argued therefore that in a modern competitive economy, the adversarial relationship between capital and labour had become outdated.
The fragility of a small open economy in a competitive global marketplace would imply that good governance and smooth industrial relations are consummate imperatives of viability and sustainability. Confronted with serious macro-economic problems in the early 1990s, occasioned by an IMF structural adjustment programme, the Barbados government fashioned a Social Partnership (SP) between itself, organised labour and the corporate sector.
As a theoretical and practical model for socio-economic corporation and development, the SP was and remains a sound enterprise in collaborative governance. Indeed, for many years it was viewed as an enviable vehicle of progress. Moody’s Investment Services gave the Partnership a highly favourable report for ‘its positive impact on peoples’ lives and the country’s political and economic stability”. Generally speaking, the past decade and a half has been a time in which the accord has served to: (1) Constrain inordinate labour demands, (2) Make the corporate sector somewhat more conscious of its social responsibility, less inclined to lay off workers, (3) In spite of work stoppages between 2004 and 2006, some 38 between January to October 2005, there have been no crippling countrywide disputes.
Like any marriage, the promises of happy ever after are fraught with difficulties particularly where the signatories appear unequally yoked. In recent times capital has gained the upper hand over labour and there are those who felt that the SP has worked to the disadvantage of labour. However, the academically sophomoric whining about the ascendancy of the neo-liberal ideology will not change the context in which the parameters are currently set.
Most marriages can work reasonably well in good times when, for example, the finances are sound and differences are not aggravated by external factors. The relative success of the Partnership was in large measure due to easy communication and sense of trust. Much of that has now dissipated. The global financial crisis, the crisis in government finances, the burden of debt and deficits and pressure on the foreign reserves served to acerbate the latent tensions in the accord. The Government, partly as a consequence of external constraints affecting the productive sectors and partly as a result of its own fiscal imprudence has been unable to pay the traditional public sector wage increases and has been forced to cut spending by retrenching workers while raising taxes on corporations and individuals. The trade unions found a limit to what they could do. There are those who felt that they abandoned the workers. However, to wage an all-out defence of the sacked workers ran the risk of further ruining an already struggling economy, placing Barbados in a situation where it might be unable to honour its external obligations and for the first time default on its debt. Such an occurrence could bring the country to its knees, with devastating consequences. Not surprisingly, the idea of widening strike action never gained traction
The private sector’s disenchantment with the SP seems to hinge mainly on the fact of increased taxation on an already burdened sector, annoyance with an absence of clarity and direction in Government policy, paucity of continuous dialogue and the cumulative silence of leadership, breeding a lack of confidence inimical to growth through business facilitation. It is pathetic that in the current conditions, the full partnership has not met for almost a year. On April 14, the council of the BEC declared its intention not sign an extension to Protocol VI which had expired on March 31. The Government, arguably the weakest link in the chain, contends that the private sector was not doing enough to help pull the country out of the recession even as many enterprises struggle to survive.
Barbados will continue to be a capitalist economy within the context of a liberal democratic polity and with a high level of dependency on prevailing external forces. Capitalism has undergone a crisis, but the idea that it is in peril is misconceived. Indices do not indicate any significant global contraction of entrepreneurial enterprise. It will behove Government and people to manage their business adroitly. What the Social Partnership may require most at this juncture is a dialogue to build a platform for the sustainability of what is essentially a noble project.
Ralph Jemmott is a retired educator and social commentator; email rajemmott@caribsurf.com
