Prime Minister Dr. Kenny Anthony has described the launch of the National Competitiveness and Productivity Council as “most timely, given the global environment of slow growth, dampened private sector appetite for investment and high debt and limited fiscal space of Government”.
Dr. Anthony, who was the feature speaker at the launch and inaugural meeting of the council, said that the creation of this council brings to the fore the uncomfortable truth that increase in wages in Saint Lucia has not resulted in a commensurate increase in productivity.
In his address, the prime minister reflected on a paper delivered by Wendell Samuel of the IMF during the High Level Forum on Growth recently held in Bahamas, and the sobering reality it highlights.
“Focusing on Saint Lucia, Dr. Samuel demonstrated that public sector wages have grown at a much faster pace than the private sector to the point that private sector wages have decoupled from wage levels in the public sector.”
“Using 1994 as his base year, he observed that public sector wages have increased steadily, to the point that the gap between rates in the public sector is significant, meaning, among other things, that rates in the public sector have grown at a much faster pace than the private sector but it has not yielded any significant growth in productivity,” he said.
“The gap in wage rates dipped slightly in 1997, climbed thereafter, but dipped again below private sector wages in 2001, only to climb steadily from 2003 to the present. Even more alarming for Saint Lucia is a significant mismatch between unemployment and available skills,” he said.
“Dr. Samuel argued that skills mismatch limits productivity growth and employment, and this is exacerbated by the migration of skilled persons within the labour force.”
This, according to the prime minister, represents a problem which needs urgent attention if St Lucia is to survive the competitiveness of the global market.
The National Competitiveness and Productivity Council will be responsible for raising the awareness and understanding of the importance of competitiveness and productivity to Saint Lucia’s economic wellbeing, as well as provide advice to the Government on actions to promote productivity growth and competitiveness in Saint Lucia.
The council is chaired by Rayneau Gajadhar and consists of representatives from the private sector, public sector, trade unions and civil society.