Global IssuesECONOMY: Caribbean Bleeding Jobs, With No End in Sight
Earlier this month, the Chinese bauxite mining and processing company Bosai Minerals announced plans to lay off about 20 percent of its nearly 600-member workforce from its mines in southeastern Guyana.
It was the latest of a string of similar cutbacks in the region that are bringing the global economic crisis right to the Caribbean's doorstep.
The announcement by Bosai came weeks after a move by United Company Rusal of Russia, an aluminum giant, to lay off more than 50 of its employees, citing weak market demand and the dearth of investment capital.
Signs are becoming clear that the crisis is sweeping across the region, weakening key sectors like the collective tourism industry, mining, manufacturing, construction and others.
In the last year, more than 25,000 Caribbean nationals have lost jobs in industries that are directly connected to sister groups in North America or Europe, with a fair portion resulting from the demise of two giant regional conglomerates, the Trinidad-based CL Financial and the Texas and Antigua-based Stanford Financial Group. Both collapsed ingloriously earlier this year, pushing hundreds to the breadline.
Critics say that the failure of the firms, jeopardising thousands of longstanding home, vehicular insurance and retirement policies, has brought home the stark reality of the crisis in a way few appear to have envisaged in the 15-member community, where officials had worried more about an anticipated decline in tourism arrivals and financial remittances than the health of foreign companies with subsidiaries in the region.
In some tourism destinations like the Bahamas, hotels have sent home dozens of workers, significantly reduced rates or have closed huge sections of their properties because business is so bad. In the case of the Bahamas, many of the hotel workers are women with long years of service, either furloughed until things get better or simply ‘pink-slipped.’
Caricom trade bloc secretary General Edwin Carrington says the current crisis is clearly the greatest single threat the region faces at the moment.
'The crisis has brought home to the people of the region what the global financial and economic crisis is really all about. This is a serious crisis that calls for serious responses,' he said, as the region braces for a prolonged period of hardship.
Some observers with vested interests like Ancel Roget, president of the powerful Oilfields Workers' Trade Union in Trinidad and Tobago, predict that by year's end, 12,000 more workers will be out of a job in the twin-island oil and gas-rich state alone.
He says that the current crisis, coupled with governmental over spending on this month’s Summit of the Americas and that of Commonwealth leaders in November, will result in thousands more being sent home as their services will no longer be required.
In Jamaica, close to 2,000 bauxite workers were dismissed as Alumina Partners of Jamaica closes its doors after decades of operations, threatening the very existence of thousands in towns that depend entirely on the company for electricity, water, schools and other basic amenities.
In January, the Jamaican labour ministry reported that the island lost 9,331 jobs last year nine times more than in 2007 - while 1,000 more are on the chopping block in areas ranging from airlines to urban transport to mobile telecommunications to the hardware sector.
'The world is going through a kind of economic turbulence that it has not seen in 50 years,' Prime Minister Bruce Golding said recently. 'There is no country in the world that I know of which is talking about increased employment this year.'
Mikey Joseph of the Trinidad and Tobago Contractors Association says that 'things are going to get worse as local contractors have had no new work, only projects from last year.' Already, 2,500 workers are idle since being fired last year and up to the end of last month, 1,800 more have been told there is nothing for them to do.
Other sectors in Trinidad like steel and energy have downsized as well - even global giants like Spanish-Argentine Repsol YPF.
In Antigua, the collapse of the Stanford Group meant hundreds received marching orders, while in the Cayman Islands, one of the world’s largest offshore financial destinations, gloom is beginning to set in as authorities fear the G20 group of developed nations will tighten offshore laws in the wake of several Ponzi investment schemes that have gone under.
Anxious Caribbean leaders say that one way out of the current mess is for multilateral institutions like the International Monetary Fund and the World Bank (IMF) to cease the practice of 'graduating' countries with relatively high per capita incomes from access to concessional financing. The leaders sent a letter to the G20 Summit in London recently asking British Prime Minister Gordon Brown to petition their case.
'The community pointed out that the reforms which were of particular interest include the need for special treatment to highly indebted middle income countries which found it difficult to grow out of their debt without special assistance from the international community, because of a number of structural vulnerabilities,' the letter said.
'Caricom countries should not be graduated out of access to concessionary loans on the basis of mere per capita income, particularly since such a level of income may not be sustainable,' the G20 note argued, pointing to the annual hurricanes that devastate island economies.
Regional leaders noted that they are already battling to control drug crime, with runaway levels in some countries, and fear that thousands may slip back into severe poverty if the crisis persists for another 18 months.
© Inter Press Service (2009) — All Rights ReservedOriginal source: Inter Press Service