The Irish model in the Caribbean part I

Publié le par jean-paul Revauger

Jean-Paul Révauger

Université de Bordeaux

UMR CNRS 5222 Europe, Européanité, Européanisation.

 

 

Importing the Irish model.

Globalization and social partnership in Barbados.

 

 

            This paper is based on primary sources collected over the years, and during field trips to Barbados. They include interviews with major players in the field of industrial relations during the 1990’s, namely Sir John Goddard, chair  of the Barbados Employers Confederation at the time of the 1991 crisis, and a major protagonist in the negotiations, and Sir Le Roy Trotman, president  of the Barbados Workers Union, and equally prominent during the crisis. Leading academics were also interviewed, such as Doctor Lawrence Nurse and Professor  Franck Alleyne . Many thanks to Professor Christine Barrow, of the University of the West Indies, for her help.  Primary documents include the texts of the five  Protocols, i.e. the tripartite agreements  negotiated between government, employers’ and employees’ representatives. Many thanks also to the Barbados Workers Union for giving access to their archives, and in particular to Lady Walcott.  The subject has also attracted a lot of academic interest, and a special issue of the Journal of Eastern Caribbean Studies has been devoted to it. Finally, institutional interest was also very significant, in particular on the part of the International Labour Organisation, which tried to promote the Barbadian way to social partnership in the whole region. In particular, the analysis provided by Tayo Fashoyin on the subject is probably the most comprehensive one.

 

 

            The goal of this paper is to assess the response of Barbadian society, when faced with a major threat to its independence and living standards in 1991. The threat resulted from the fall in the receipts provided by tourism, and the consequent appeal to the IMF. The IMF attempted to impose harsh policies on Barbados, whose salutary reaction can be considered as a form of emancipation. Barbados adopted a high-profile strategy, which was based on social negotiation between government, trade-unions and employers, and led to institutionalised social partnership, based on a drive towards competitiveness, wage moderation, mutual respect, trade-union recognition and security of tenure for workers.

 

Emancipation ?

 

            The concept of “emancipation”, traditionally, was either given a national dimension – i.e. emancipation from foreign oppression, or occupation-, a social one - emancipation from exploitation or domination by an oppressive ruling class, or a political one – liberation from a dictatorial, tyrannical or manipulative regime. At least this is the way the debate was construed in Europe. In the case of the XXth and XXIst century Caribbean, however, the distinction between the national, social and political areas is less clear. National independence has not necessarily totally empowered nations, and the converging influences of foreign trade, foreign superpowers, and international financial institutions, such as the IMF have given a very practical meaning to “the constraints of globalization”.  Indeed some non-independent territories are less subjected to the pressures of globalization than vulnerable independent nations. The IMF has never put pressure on the French DOM, and required them to cut public expenditure. The social and the national dimensions have never been totally separated either in the Caribbean, for obvious historical reasons. Contrary to European countries where, by and large, the upper class and the rest of society had similar national or ethnic backgrounds, the ethnic dimension of “class” has always been present in the Caribbean, since “employers” were originally all white.  Historically, the Trade Unions were training grounds for the emergent  black political elite in the Caribbean, especially at a time where political action was impossible, and the population was denied universal suffrage. Grantley Adams, who held the office of  Prime Minister from 1954 to 1958, led the Barbados Workers Union from 1941 to 1954. In Barbados, however, the division of tasks between the political movements and the Trade Unions became clearer than in Jamaica, as soon as the 1950’s, and the picture was more akin to the British one.    Besides, even though there is a significant and fast growing class of black employers in Barbados, the ethnic factor is still there, at least in people’s minds. Foreign companies and investment are significant. The ethnic mix of the country is simpler than in many other nations, since there are few East Indians, and very few mulattoes, who are not identified as a class of their own, as they are in Jamaica, Haiti or Martinique. In terms of politics, Barbados is a democratic country, with a free press, free speech and free elections. Contrary to some of its neighbours, it has known no major upheaval or challenge since I966.

            Barbados is a relatively rich country. With a Human Development Index of 0,892, it ranks N° 31 out of 177, (France is N°10, the US n°12, and the next country in the Caribbean down the list is Bahamas, N°49). Its GDP per head is 17 297 US$ (France 30362 US$). Such figures rank Barbados somewhere between Portugal and Hungary. Therefore, it is debatable whether the synthetic concept of development, which is commonly used in the South to describe the fight against a motley of social and political evils is relevant to Barbados. It certainly is relevant in more fragile and less successful countries, such as Guyana or Jamaica, or the OECS, but hardly in Barbados, the island where condos sell at half a million dollars, and British Airways’ Concorde used to land. Tourism is, by and large, seen favourably by Barbadians, in spite of the generous use of concrete on the sea front, the quasi privatization of some of the best beaches, and general ecological damage to landscapes, lifestyles and habitats , in an already overpopulated island. Tourism is highly profitable, and Barbadians do not share Derek Walcott’s reservations about it: They do not subscribe to the idea that “the only difference between tourism and slavery was that at least the slaves did not have to smile”. Perhaps the smiles are mercenary, but they are well rewarded.

            Therefore, we may wonder how valid is the concept of “emancipation” in an independent, stable, relatively prosperous country, governed by the rule of law in the field of politics and industrial relations?  What dark satanic forces should Barbados strive to emancipate from?

 

            The answer is clear: Barbados is fragile, and dependent on the ebb and flow of the global economy. Come a recession, should the tourists shun the turquoise waters and the coral sand beaches of Oistins or Sandy Lane, Bajans would lose their jobs and incomes overnight. The economy of Barbados is mostly dependent on tourism, with  sugar production coming next, and a not insignificant manufacturing sector n°3. In 1997, the total value of exports amounted to 176 million $, whereas tourists spent a total of 717 million $, roughly the amount spent by the country on  imports. The exact size of offshore finance is not clearly documented, even though Barbados, once chastised by the OECD for its shady procedures, has now officially toed the line. The border line  between tax evasion and money laundering is probably rather blurred, and offshore finance is not seen or presented  as a reliable activity. It is dependent on the goodwill, or negligence of the tax authorities in the US and Canada, which might not last for ever.  Both tourism and offshore finance are typical products of globalization. Even though the term “globalization” is a rather modern one, the concept itself is not new to the West Indies, since the staple production, sugar, was entirely designed for export, and the whole society was created, from scratch, to this end.

            The vulnerability of Barbados is compounded by its small size: its surface is only 430 square km, less than half the size of Martinique, 12 times less than  Lot et Garonne, 8 times less than Sussex. Its population is 270 000, which means a very high density, comparable to that of the Netherlands in Europe, but remains a very small figure indeed for an independent country.  

 

            For the whole of the 1980’s, the world was dominated by the neo liberal ideas prevalent in the English speaking countries, which brought Ronald Reagan and Margaret Thatcher to power, but influenced governments and experts far beyond the borders of the US and the UK.. In the Caribbean, the chief channel of influence for the ideas of the New Right was the International Monetary Fund. Several countries had to resort to loans from the IMF during the decade, which implied, in most cases, accepting the political conditions imposed by the IMF, under the name of “Structural Adjustment Plans”.  In many countries, the social costs of the IMF-induced policies were disastrous. Trinidad, the next door neighbour, temporarily impoverished by a fall in oil prices, had to slash public spending savagely, and dramatically downscaled its commitment to a publicly maintained universal system of health care, thus paving the way for a dual system, a low standard, free one for the poor, and a private one for the middle class. The ideological motivations of the IMF could not be clearer. Public services had to be streamlined so as to cut spending and let the private sector expand. Although supporters of neo liberalism will probably commend the IMF for exporting such policies, there is a case for considering the pressures exerted by the IMF as a gross infringement upon the national independence of debtor countries.

 

Crisis

            In the case of Barbados, the crunch came in 1991. As a result of the first Gulf war and the economic recession it triggered, receipts from tourism plummeted.  Between I989 and 1992, GDP fell by 13%, and unemployment rose from 15.1% to 23%. The public debt rose from 6.6% to 11.5%, the foreign debt increased significantly and inflation increased moderately but steadily. The government opened negotiations with the IMF, which lasted from October 1991 until April 1993. There is a general agreement among all sources concerning this data. However, there are nuances on the exact scope of the negotiations, and in particular one key measure, seemingly contemplated by the IMF, the devaluation of the local currency. The Barbadian dollar, pegged on the Sterling until 1975, was and still is pegged on the US $, 2 BB$ being the equivalent of one US$.  The version presented by the BWU is that the IMF was intent on imposing a devaluation of the BB$, and only the vigorous response of Barbadian society, and the signing of a national agreement of social partnership between government, employers and the Unions saved the day and prevented this.  Other interpretations suggest that the other measures accepted by the government, in practice a package of austerity, were enough to reassure the IMF. What is rather uncommon, however, is that, in the eyes of all actors, TU, employers, academics, officials, the issue of the exchange rate was and is still seen as absolutely crucial. Never in the history of industrial relations in Europe could one find so much concern for the value of the national currency.

This is not due to small island nationalism or other symbolical reasons. A small country with a puny industrial and agricultural base, a large population of tourists, and a domestic population aspiring to high levels of consumption needs to import a wide variety of goods – largely priced in US dollars. This made the issue of the exchange rate absolutely crucial. Any devaluation would be mechanically reflected in the prices of most goods, and lead to a fall in purchasing power.  Besides, Barbados always aimed for the upper section of the tourist market, and never tried to undercut providers of cheap services, such as the Dominican Republic, and other low wage countries. It is not in the business of selling itself cheap, and devaluation was therefore pointless.

            The austerity package which the Structural Adjustment Plan included, in return for a loan and a line of credit, was harsh. This was conveyed by the IMF to the government, and accepted. The measures included expenditure cuts, a freeze of wages for the private sector, and a CUT of 8% in the wages and bonuses of the public sector, from September 1991 to April 1993. Taxes would be increased, and 8000 jobs would be axed in the public sector.

The Trade Unions’ response was predictably very hostile. Demonstrations took place in Bridgetown, with calls for the government’s resignation. Roy Trotman explained that the BWU contained the radicals who were keen to politicize the protests. In any case, Barbados does not have a culture of street protests, and is a rather conservative place, even though riots did occur in 1938, as they did in the whole of the British West Indies.

What is more unusual is that employers concurred with the Trade Unions. The explanation given by Fashoyin, the ILO researcher who followed the case, is that they resented the ending of the tax barriers which protected some local industries, in particular those destined to import substitution, as well as tax exemptions for business people.

Even more unusual was the involvement of a number of churches in the debate. Religious practice is very high indeed in Barbados, where the Anglican Church enjoys an official status and is the most widespread, and about 100 competing denominations also exist. This was therefore very significant.

The Churches did not demonstrate, but acted as go betweens, and encouraged tripartite negotiations with TUs, employers and government.

 


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