Addressing the public service

There is no question that public sector reform is desperately needed in The Bahamas.

The public service is overstaffed, inefficient, unproductive, too expensive and, as it stands, an impediment to our national development.

This all began with noble intentions – having Bahamians join a public sector previously ran by foreigners to move them from menial labor to office workers in the shortest time possible.

This was a move that quickly helped create a robust Black Bahamian middle class.

But like so many other Caribbean nations, we came to abuse the public service, stuffing it with people unqualified for unneeded jobs that have been often given out as political favors.

We have backed ourselves into a corner to the point that no government has been willing to seriously tackle public sector reform due to what will surely be the political fallout from such a move.

Our inaction and our capitulation to entitled, unbending unions who fight for employees who are often unqualified to get benefits largely unheard of in the private sector, have led us down a dangerous path.

The Inter-American Development Bank’s (IDB) 2018 report, “Building State Capacity in the Caribbean: The State of the Civil Service in The Bahamas”, pegged the number of people employed by the civil service, including temporary workers and employees of government corporations, at around 40,000, making it by far the largest employer in the country.

However, the report noted that the head of the public service indicated that “the public service is overstaffed by as much as 40 percent”.

“The permanent secretary in the Ministry of the Public Service indicated that, while the staff numbers were high, the civil service had a ‘hollow middle’ and lacked essential skills,” the IDB report read.

“In fact,” the report read, “the Cabinet secretary described the cadre of deputy permanent secretaries as extraordinarily weak.”

The International Monetary Fund (IMF) indicated in 2017, that non-essential temporary workers accounted for 30-40 percent of government workers.

And what has this bloated, “hollow”, “weak” civil service cost us?

The IDB said in 2017, the public sector wage bill accounted for 8.2 percent of our gross domestic product (GDP), 33.8 percent of revenue collected, and 32.4 percent of total expenditure.

Bear in mind, the GDP contracted by 14.5 percent in 2020 and revenues fell dramatically, so we are likely in a much more dire position today.

Additionally, ineptitude and corruption in the public service are also hampering revenue collection.

The state of the public service is costing us money we do not have in more ways than one.

And what have we done about it?

Nothing.

We can no longer afford to continue in this fashion.

The trouble is, no government has been willing to fall on its sword to fix this.

To be clear, sending over 15,000 workers home in one stroke is not what we are suggesting.

The government would be under great financial strain to pay out that many workers and would also likely have to end up supporting many of them.

However, we are not even talking about common-sense approaches to reduce our public sector wage bill.

We note, the previous administration had promised to address the issue of public sector pension reform, which then-Minister of Finance Peter Turnquest said in 2019 “poses a major burden on the sustainability of the public finances”.

We have a non-contributory system of public sector pension in The Bahamas – perpetuated for inexplicable reasons.

In 2018, Turnquest said there was a “need to engage the unions and key stakeholders in a discussion of the issue of pension reform, given its potential future fiscal impact”.

“One estimate suggests that accrued government pension liabilities could exceed $3.5 billion in the next dozen years,” he said.

Of course, that went nowhere.

Fear of unions, fear of political suicide and fear of public backlash has trumped our fear for our nation’s future for far too long.

The reality of the situation is that we can no longer sit back and act like antiquated structures are not crumbling around us.

It will take a government of resolute will and seriousness about structural reform.

It remains to be seen if the Davis administration is such a government.

If we are not extremely careful, we would be headed toward a structured program with a major world lending institution like the IMF, which, we pointed out earlier, believes the public sector is grossly overstaffed.

Better to make the hard choices ourselves now rather than someone else forcing those choices on us.

The post Addressing the public service appeared first on The Nassau Guardian.

source https://thenassauguardian.com/addressing-the-public-service-2/