No cheer

Chamber President Lalu Vaswani

by Shawn Cumberbatch

Barbados’ private sector is feeling neither cheerful nor prosperous this holiday season and is warning of likely job losses in 2013.

Both the leadership of the Barbados Private Sector Association and Barbados Chamber of Commerce and Industry today sounded a gloomy tone and said solutions would have to be found locally since there were no immediate signs of an international recovery to help the island.

Additionally, while noting it would be releasing an evidence-based review and outlook next week after canvassing the views of its members, the Barbados Employers Confederation also acknowledged the difficulties facing private sector bosses.

Chamber President Lalu Vaswani reported in a statement today that business was so bad one of its members would be “forced to lay-off people” early in 2013, while others had hired 10 per cent fewer staff during the current holiday season. As a result, the businessman urged Government to review its current strategy of not stimulating the economy, implement new employment laws on a phased basis, and to give companies their value added tax refunds.

“This reduction (in holiday season staff) is estimated at around 10 per cent, with one member having to resort to hiring less people for a shorter period of time, that is, one week before Christmas and the week afterwards. In spite of these economic challenges, members in the retail/distribution sector had not resorted to lay-offs, but rather had curtailed all over-time,” Vaswani said.

“Overall, the business community is anxiously monitoring their expenses, particularly labour costs. Try as they might, one of our members will be forced to lay-off people in the New Year. Very little growth is expected in the construction sector while food sales are stable. People will eat, even if it means trading down to cheaper brands or more basic foods,” he added.

The president also said business owners were finding it costly to implement workplace improvements such as holiday with pay, safety and health at work, pensions and securities regulations and that with costs rising and salaries remaining relatively flat, workers were experiencing “an internal devaluation”.

Vaswani was also unhappy with the length of time that it was taking Government to pay VAT and corporation tax returns to the business community. Likewise, BPSA Chairman, John Williams said there had been “no let up” in the difficulties facing the entire private sector and that employment was “absolutely” under increasing pressure.

“I don’t think that there is any change in the wish to maintain employment levels because the private sector, the business community, recognises that the economy benefits the higher the level of employment is,” he told Barbados TODAY.

“There is a reality where businesses, if their revenues are down, they don’t want to go out of business so that pressure will increase on the question of maintaining employment.” Williams said the chamber’s position as outlined by Vaswani was “reflective of that in the wider private sector”.

“The outlook for 2013 really is not looking bright, there is no obvious sign of a recovery in the outside world that would lift our economic fortunes, so our position from the Barbados Private Sector Association is that we have to really focus our efforts on fixing the things that are within our power to fix,” he said.

“Those are areas such as improving levels of service, increasing productivity, reducing or eliminating wastage whether in the public sector, the private sector, the professions, wherever. That really should be our national goal to say, ‘Let us fix the things that are within our control because we are not going to get our rescue from the outside world’.”

BEC Executive Director Tony Walcott told Barbados TODAY his organisation was without “empirical evidence” on some of the matters raised by the other private sector representatives. But he said statements within the business community suggested there were challenges, including cash flow problems related to related tax refunds.

“The delays in receiving these refunds have put some pressure on companies’ cash flows, with the consequential knock-on effects; positive cash flow is the life blood of business operations,” he said.

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