Feature Address by the Honourable Freundel Stuart, Q.C., M.P., Acting Prime Minister, at the Inaugural Regional Tripartite Productivity Conference – July 15, 2010
Madame Master of Ceremonies
Mr. Anthony Johnson
Chairman of the Productivity Council
Mr. John Pilgrim
Executive Director of the Productivity Council
Mr. Thomas Tuttle
President of the World Academy of Productivity Science
Representatives of the Barbados Social Partnership
Representatives of the Inter-American Development Bank
Representatives of the World Academy and World Confederation of Productivity Science
Inductees to the World Academy of Productivity Science
Special Invited Guests
Ladies and Gentlemen
Let me say how very pleased I am to be here this morning to speak at this very important Conference which brings together some of the best minds in the region to deliberate on the topic of productivity.?? This Conference comes at a time when almost all countries are grappling with economic downturn and are searching for ways of staving off economic disaster.?? Your theme "Higher productivity in the Caribbean – Yes we can" must therefore become our clarion call if we as small open economies are to survive the global challenge before us.
Global pronouncements on the current state and likely performance of economies around the world can be reasonably described as tentative and nervous at best. Global recovery is anticipated to be slow and uneven and conditions for sustained growth remain fragile. Aggregate demand remains tentative and by all indications seems far from being self-sustaining in many economies.
Market nervousness concerning the fiscal positions of several high-income European countries is disquietingly pervasive. As developed countries try to get their act in order, less attention is being paid to the plight and challenges of developing countries. Tension is further exacerbated as efforts are pursued to hasten economic recovery and to effect the transition toward a more stable and mature phase.?? Fiscal stimulus programs are fading as viable policy options and greater hope of economic recovery now rests in GDP gains accruing from private investment and domestic consumption.??
Hence, Caribbean economies are in anguished search of a compendium of policy options which are both suitable and feasible enough to weather the potentially negative effects of the economic recession. Our economies, unlike Europe, cannot support fiscal stimulus packages without increasing our debt to GDP ratio. Neither can we continue to approach fiscal reform as individual states without due regard for congruence. If nothing else, this recession is highlighting the fact that there is a need not only for national budgetary management, but for discussion on a regional approach to fiscal convergence.
Global prospects are still highly uncertain even though a number of risks have receded. Global growth is projected to improve to 4.2 per cent following the 0.6 per cent decline recorded in 2009. Interventions by the State, even though there was limited room for fiscal manoeuvre, have stabilized activity in several economies.??
Real GDP in the USA is expected to grow by 3.1 per cent in 2010, while GDP is projected to reach 1.3 per cent in the UK. GDP growth in Canada declined by an estimated 2.6 per cent in 2009 but is expected to grow by 3.1 per cent in 2010.
Regionally, there was an estimated decline in Real GDP by 2.6 percent in 2009 with modest positive growth projected in 2010. Sharply declining tourist arrivals and a fall-off in Foreign Direct Investment (FDI) have negatively affected investment in tourism-related construction projects, reducing output and employment in both the tourism and construction sectors.
In addition, the financial crisis has adversely affected offshore sector activity in all major jurisdictions and the value of total exports from Latin America and the Caribbean fell by 24.0 percent in 2009.
In Barbados alone there has been an estimated loss of foreign exchange from tourism of approximately $170 million. This loss, and an estimated shortfall of $465 million in net private capital inflows relative to initial forecast, were the main factors in a lower than anticipated Net International Reserves (NIR) position. The contraction in tourism output had a knock-on effect on the traded sector which fell by an estimated 6.3 per cent in 2009, following a 1.2 per cent decline registered in 2008. Thankfully, there are signs of improved tourism activity as tourism GDP expanded by 1.7 percent during the first quarter of 2010 as a result of the increase in long-stay arrivals.
Thus far, evolving economic developments in Europe have had limited effect on the financial environment in Barbados. Although this is indeed good news, it should not predispose us to complacency, since the one lesson that globalisation and trade liberalisation have taught us is that contagion effects are much more fluid than ever before. What affects one country will either directly or indirectly impact on another.
I am keen, therefore, to stress, reiterate, and underscore the importance of strategic and contingency planning as essential management and governance tools for a typical economy, and particularly so for small, open economies such as ours. We can ill-afford to wait until something happens before we take protective or precautionary measures. Regional economies require the ability to analyse, forecast, and make decisions influenced by data and information, all the while being guided by the precedents set by our past and the vision we have carved for our future. This imperative ought to be given some consideration in the scope of objectives for this conference.
Academics around the world indicate that fiscal consolidation, particularly on the part of developed countries, will be a necessary economic tactic if they are to climb out of the economic doldrums. Although the fiscal challenges facing developing countries are somewhat less marked, if aid flows from developed countries are compromised as they have been following past recessions, then the consequences for investment and long-term growth prospects of developing countries could be serious.
Our fiscal position could be improved with greater contribution to productivity through not only increases in labour productivity, but also greater acquisition and use of technology for domestic production and exports.
According to Paul J. Meyer, founder of The Leading Edge Publishing Company in the United States, "Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort." I interpret Mr Meyer to be saying that productivity is first and foremost an attitude and a state of mind. If that is indeed so, then one of the first priorities of this conference should be the tackling of the issues of productive attitudes, mindsets, and ethics. Although I have spoken about the need to make greater use of technology, it is our human resource that will operate the technology. Training for focussed and productive approaches to what we do is crucial at both the personal and professional level. A good example of this is in the area of time management which is as important for the student as it is for the CEO.
Our Caribbean economies have lagged behind in the initiatives needed to boost our productivity to levels which would propel our trade competitiveness and economic development. Too many of our economies are characterised by labour intensiveness and insufficient emphasis on innovation; and innovation need not be a radically new way of doing things. More often than not the innovator expects that the product or service will be novel, and faster, cheaper, bigger, or smaller than what already exists. He or she can design, however, an innovation to have increased capacity, a more significant impact or greater marketing appeal.
Similarly, productivity is concerned with finding new ways of producing outputs, outcomes, and filtering work through the organization so that the result is an increased quantity, that is cheaper, or more adaptable to market requirements.
If we are to be serious, and if this conference is to attack the issue of competitiveness in a serious way, then we need to table for discussion a Caribbean Productivity and Innovation Index.
The last available figures on productivity growth in Barbados in 2008 were recorded at 1.8%. This was higher than that of Jamaica (-6.7%), but lower than Trinidad and Tobago which was 3.3% and Guyana 2.7%. What were the reasons underlying the productivity increase in T&T and Guyana? What lessons are there to be learnt for the rest of the region? What do we know of the figures recorded for the OECS sub-region? And where and how do we begin to tackle the issue of Caribbean Productivity, Competitiveness and Innovation?
Perhaps an oppropriate place to work on these indices and questions would be to establish them as working priorities of the proposed Caribbean Association of Productivity Professionals (or CAPP).
I have been informed that the proposed CAPP would:??
- develop public relations campaigns to promote productivity measurement and performance-related activities in the Caribbean
- establish Productivity Centres throughout the Caribbean
- develop Caribbean Productivity Indices.
Barbados, through the establishment of its Social Partnership, made a commitment to stakeholder-involved social dialogue as a mechanism for building national consensus in the search for socially and economically acceptable public policy. Part of the original protocol also called for the promotion of productivity initiatives. For far too long, we have talked our way around the issue of productivity. But if we take the advice of Paul Meyer, and we agree that productivity begins with a change in attitude then we are, I feel, at the point in our development where we are obliged to move beyond the promotion of productivity to the second-nature use of initiatives which:
- Engage our employees to higher levels of effort, output, and commitment
- Move our companies to use performance measurement data to promote profitability
- Radically transform the approach to how; pace at which and enthusiasm with which things are done.
Our ability to move this conference beyond a discussion forum will depend on our determination to do whatever is necessary to make productivity an intrinsic part of our everyday living.?? The by-products of this conference should be a positive affirmation to questions critical to the national changes required:
- Does the average Barbadian or Caribbean citizen understand the link between their consumption preferences and increases or decreases in the country’s GDP?
- Does the average worker understand the implications of time efficiency for the workplace – getting to work on time, completing assignments within a particular timeframe, or, being able to deliver within a particular timeframe?
- Do we practice productivity in our levels of service delivery – committing to standards of excellence and performance?
I venture to suggest that commitment to standards of excellence whether at a personal or national level is not beyond our capability as a people and as a region. What pledge are we intending to make by the end of this conference which will define the path to our region’s competitiveness? This conference more than any other needs to make a mockery of the idea that events such as these are merely discussion fora without any substantive commitment to expand, act on or improve the core objectives.
Although it has been used repeatedly Singapore can be cited again as a model of productivity excellence. Singapore’s Economic Strategies Committee report has placed productivity as the key growth strategy for Singapore’s economy and has been able to execute a phenomenal programme with enterprise development centres assisting over 36,000 SMEs.
Canada has also been able to weave performance and results-based management into its system of public governance. Strategic plans are used as the mechanisms for execution and implementation. This is buttressed by a reporting structure which promotes a refreshing approach to transparency, accountability and effectiveness.
Canada has certainly raised the bar as far as strategic planning and execution are concerned. Now, this country has been able to diffuse its strategic master document to the operational levels of ministries and departments to determine how objectives and priorities will be met and to respond in a focused, effective and innovative way to the challenges to be faced.
This system of reporting and accountability occurs with our budgetary and estimates processes. Government is duty-bound to demonstrate the utmost prudence in the conduct of the country’s affairs, and in its financial appropriations.
I am heartened to know that the Budget Unit in the Ministry of Finance is working collaboratively with The Productivity Council to deliver workshops which expose Government officials to the tools in Performance Budgeting and Strategic Planning. The time is at hand for us to be able to highlight the direct correlation between requests for funding, actual spending and the results achieved from the programmes undertaken.
Today, we find ourselves in difficult economic times which may threaten to undermine the optimism which drives what you are trying to achieve. Such vicissitudes, however, ought never to triumph over the pursuit of innovation, growth, or competitiveness.
Our present circumstances highlight the need for reform and for working smarter through collective effort. The templates for effecting change in the public and private sectors are already established and need only to be modified for individual territories. I certainly endorse the establishment of the Caribbean Association of Productivity Professionals and the transformational role it is expected to play in standardising productivity tools and initiatives across the region.
I wish you a successful Conference and I eagerly look forward to the report on the outcome of your deliberations outlining particularly how productivity will be infused into regional initiatives to promote economic growth and development in the Caribbean.
I thank you!????