Labour costs ‘not the only lure’

Low labour costs don’t necessarily attract investors. The assertion came from Henry Gill, senior director of the Regional Negotiating Machinery (RNM) as he addressed a workshop on trade, hosted by the Barbados Private Sector Trade Team (BPSTT), in association with the Small Business Association (SBA) and the Barbados Investment and Development Corporation (BIDC). Speaking on competitiveness, Gill said: “High-cost labour is not a disadvantage in itself but you have to link it with productivity. Some people say that cheap labour is going to bring in investment, but that is not necessarily the case.”  In fact, he described cheap labour as “a sign of low human resource development and a sign of low productivity.” Gill, who is one of the region’s lead negotiators at the World Trade Organisation (WTO) and the Free Trade Area of the Americas (FTAA), argued that there are many cases where international companies invested in the Caribbean, not because of low cost labour but because the labour force was trainable.

The high capacity of the region’s workforce to absorb training is seen as one of its greatest assets. The RNM senior official also offered the Barbadian entrepreneurs some recommendations on how to be more competitive in a globalised market. He warned that it was time for Caribbean governments to hold national consultations to “identify in the society and the economy the various elements that make for non-competitiveness,” whether they be telecommunications, transport or ports. After the elements have been identified, they needed to be prioritised and time frames for action established. “If we can do that then we will start to get somewhere. So that you will have an environment that will be conducive to competitiveness and that will go hand in hand with what you are doing at the human resource level,”  he noted. Gill reminded the audience that the economies of many Caribbean islands relied heavily on services even though the populations cannot conceive how this is so.  “This is a service economy as a share of GDP ‘gross domestic procuct’, as the source of most of your foreign exchange . . . and this is good. You don’t have to produce something that can fall on your toe to be rich, in this day and age. The Cayman Islands is rich and they don’t produce anything that can fall on your toe – just services,” he added.