DPM Turnquest not conclusive on IMF job reduction suggestion

Deputy PM Peter Turnquest Minister of Finance

In a recent communication released by the International Monetary Fund (IMF) agency, the recommendation was made in their Executive Board synopsis following the conclusion of their 2017 Article IV consultation with The Bahamas, to reduce the wage bill in an effort to support economic relief for the country.

The press release from the IMF read in part:

“Directors expressed solidarity with countries, including The Bahamas, that are bracing for or grappling with the impacts of Hurricane Irma. Directors emphasized that restoring fiscal sustainability is a top priority.

“They encouraged the authorities to adhere to their fiscal consolidation plan to reduce the public debt burden and strengthen external buffers. Directors underscored that the consolidation effort should focus on cutting current expenditures, in particular, reducing the wage bill and making state-owned enterprises self-sufficient. They also underscored that reforming the National Insurance Board and the civil servants’ pension system, should support fiscal adjustment and reduce long-term fiscal risks.”

Based on the recommendations to reduce public debt in the form of a decrease in the wage bill, members of the Trade Union Congress assembled with other union representatives on the island recently, to voice their concerns on the IMF’s recommendations and a possible decision by the present Government of The Bahamas to adhere to them.

The unionists noted that such a move would undoubtedly have a negative impact on an already troubled economy, should the government downsize human resources within the public sector at this time.

In a recent interview with this daily, Deputy Prime Minister and Minister of Finance, Hon. K. Peter Turnquest, addressed the issue relayed by the unionists, noting that the recommendations made by the IMF are merely that, and no such decision has been made by the government as yet to heed to their recommendations, in that regard.

Turnquest also expressed that as the present government will continue to remain transparent with the Bahamian populous, any and all major decisions regarding such a major sector of the country, those employed within the public sector, will be shared with all relevant parties prior to a final decision being made.

“I have watched with interest the statements that were made by the unionists, and I presume that they were trying to be proactive in terms of what it is that concerns them with respect to one of the recommendations that the IMF has put forth.

“The fact of the matter is the Bahamas Government has made no such determinations. There is this perception that that IMF somehow runs the government, or dictates to the government. That is not their role, and that is not what they do. They make suggestions, based upon their observations and their experiences in other jurisdictions. It is up to the sovereign government to decide which recommendations they want to take, which they want to ignore or which they want to study further. In our case we have made no decisions about any drastic reduction in staff levels.

“What we have said from the beginning is that we want to make reasonable, rational decisions about the human resources that we have. We know that the public services are overstaffed. There is no secret about that. How we achieve the desired levels is something that obviously takes time. We have to be very careful about it because we do not want to harm the economy in the first instance, nor do we want to put persons who have served this country, in a situation where they are not able to continue to live the life at the standard that they have been used to. We do not want to them on the unemployment line. That is not our objective,” revealed Turnquest.

Moving forward, Turnquest noted that it is the government’s intention to, implement a strategic program, which is being considered, to utilize natural attrition, where those whom have been employed for specific purposes, and those purposes have been completed, are examined.

“We want to look at all of the temporary employment that has been on the books and has been allowed to continue, with no real analysis of the contributions that these persons will be making and to see if we can better utilize their talents by transitioning them to the private sector. We want to also look at those who may want to voluntarily leave the service.

“At the end of the day we want to encourage employment productivity in the private sector. As a government, as a people, we can only afford so much, in terms of taxes, even if we got optimal tax collection, revenue yields, we will still not be able to be all things, to all people.

“We want to encourage the private sector to develop and to absorb these jobs, so that the public sector does not become the employer of last resort. Again, as you bloat the public sector, you have to raise taxes in order to pay for it. It then becomes like a never ending cycle, it keeps escalating, because, until you get to that point, where you just cannot tax anymore and then the weight of the system collapses on itself. We do not want to get there and so we want to start making rationale decisions about how we hire, how we utilize the talent that exists and how we re deploy the talent, either within the service or within the private sector.

“Our job is to facilitate the growth of the economy, to stimulate private sector development as best as we can, to help create entrepreneurial programs, such that persons that may have some innovative or creative ideas, are able to get into business for themselves, to employ themselves as well as to hopefully employ others,” said the DPM and finance minister.

By doing so, Turnquest shared that ultimately the economy will be expanded overall, so that the public sector becomes less of a burden on the public generally.

“They (unionists) are being premature, because we have not reached that point yet, and certainly, as the custom of the government, we will consult with them, before we do any major actions, of any kind.

“We are not going to be knee-jerk about this and we will make sure that we have wide public consultation, particularly with the unions to ensure that everyone understands where we are going and there is proper communications,” concluded Turnquest.

Pin It on Pinterest

Share This