27.I.1 Perhaps somewhat paradoxically, between 1991 and 1997, when there was a remarkable upsurge in economic growth there was a reduction in employment in the public service, the bauxite sector and in the sugar industry. Indeed, in the public service, between 1992 and 1997, the decline was 46 percent; in Linmine for the same period, it was 43 percent; in Bermine the decline was 30 percent; and in GUYSUCO the drop in employment levels was 31 percent.

27.I.2 It appears, however, that in the rest of the economy, the employment position was more positive. So much so, that the Bank of Guyana, in its Report for 1996 stated that the "buoyant economic activity was accompanied by expanding employment opportunities and higher earnings in most sections. The same optimism was recorded for 1997. In 1999, according to the Household Income and Expenditure Survey which was conducted in that year, the rate of unemployment was 9.1 percent .

27.I.3 The truth of the matter is that most of the public servants and those who lost their jobs in the bauxite industry, did not register as being unemployed. Instead, they occupied themselves as hucksters, as petty traders, and as small-time entrepreneurs, many of them eking out a scanty existence.

27.I.4 Possibly because they are mainly unskilled and untrained many of those who enter the workforce for the first time are forced to resort to the informal sector for employment. This is especially true for women and young people. Indeed, even when jobs are secured by them in the formal sector, these new entrants still tend to cluster in low-paying occupations that require few skills.

27.I.5 It follows, therefore, that if the strategies that are put forward in this NDS are followed, although, the rate of job creation would undoubtedly increase, it would be more than probable that many of these women and young persons will not be qualified enough to be employed.

27.I.6 There is a geographic dimension to the consequences of unemployment. In the rural areas, the unemployed have turned to self-employed agriculture or work as manual wage labourers. In urban areas, unemployed women have been forced into the low-paying market of domestic services, while the unemployed youth, with few jobs available for which they are adequately trained, have fended for themselves, sometimes illicitly. Indeed many former junior-level employees of the public service can now be found among the ranks of pavement vendors, the numbers of which seem to be growing. It is evident that if this trend continues, earnings amongst this group are likely to decrease, unless the disposable income in the society increases significantly.

27.I.7 Much underemployment is also to be found in Guyana. This is of two kinds. The first is visible underemployment in which people are not employed for an established minimum number of hours per week. The second is invisible underemployment, in which people are employed in jobs that require a skill-level that is below their qualifications. It would appear that, besides poor wages, underemployment also contributes to poverty in Guyana.

27.I.8 In urban areas there is much invisible underemployment for certain classes of workers. At the highest end of the education scale there is a shortage of skilled personnel. However, many workers with educational qualifications that are at least at the secondary education level have chosen to enter the urban informal labour force, primarily because of the low levels of remuneration in the Public Service. Perhaps not surprisingly, it is often the more entrepreneurial and better motivated workers that choose this course. The impact of this is that the average educational levels are reduced in the formal labour force, especially in the lover levels of the Public Service. Hence, because of the lack of in-house training, and low wages, the Public Service is left with too many poorly trained individuals.

27.II.1.1 While substantially higher real wages will be essential to attract and retain qualified personnel in higher-level positions of the Public Service, there is a great need for training in management techniques, in the use of computer software, evaluation procedures, and in modern approaches to public policy formulation. Above all, placement needs to be based on merit. A rational performance-based system for evaluations and salary increments is an essential requirement. A system of performance based evaluation was instituted in 1998, but it is too early to determine its rationality and effectiveness.

27.II.1.2 To overcome the problem of inadequate wages in some agencies, Government has created semi-autonomous agencies and project execution units with increased salaries and benefits. This has led to anomalies in the Government Structure. The remaining core structure of the Government has further been weakened, exacerbating Government’s ability to fulfill key functions.

27.II.1.3 In addition, not only is insufficient attention paid by senior managers to the development of their staff, but inadequate arrangements exist for setting and maintaining staff establishments, for filling vacancies with appropriately trained staff, and for eliminating nonperforming or surplus staff. Ineffective systems are also in place for the generation, storage and dissemination of operating and management information. Moreover, there appears to be no plan for the systematic computerisation of the service. All activities in this area seem to be piecemeal and uncoordinated.

27.II.1.4 The informal sector, along with emigration, provided a cushion to workers during the 1980s. The sector not only benefited the workers, but consumers gained from its activities. Measures therefore need to be adopted to encourage further, the growth of the activities of this sector and foster its incorporation into the formal economy.

27.II.1.5 Government policies in the past have not directly addressed the needs of the informal sector. For example, incentives and concessions do not generally apply to small and medium scale enterprises, although attempts have been made to strengthen their role through micro and small enterprise development. In addition, high interest rates at commercial banks result in the cost of loans being out of the reach of small scale enterprises. Moreover, the informal nature of these small establishments almost inevitably means that they often cannot fulfill requirements for collateral.

27.II.1.6 It is evident, therefore, that specific incentives should be aimed at the economically marginalised sections of society and, as important, innovative strategies should be formulated to incorporate the informal sector into the mainstream of the economy.

27.II.1.7 Guyana’s industrial relations system evolved out of the enormities of slavery and indentureship and, in general, workers’ rights were obtained through struggle. This has led to an almost reflex reaction of settling disputes through strikes. This almost historical imperative is compounded by the fact that political considerations are often involved in labour/employer controversies. This is not to say that, in contemporary industrial relations, strikes are to be solely attributed to the trade unions. Strikes also occur very often out of the uncompromising attitudes of managers, and because of breakdowns in union/management communication. There is an evident need to resolve disputes in a more amicable manner through better structures and bargaining procedures. There is equally a need for a more proactive role by the Ministry of Labour, in disputes which do not involve the Public Sector.

27.II.1.8 However, in disputes between the unions which represent the Public Sector and the Government, which are settled by the Ministry of Labour, the unions often perceive themselves as appealing from Caesar unto Caesar. New, palpably fair and separate mechanisms should therefore be introduced for resolving such conflicts.

27.II.1.10 Both the public and private sectors must increase their investments in the general economy. The public sector has a specific responsibility to ensure that investments in transportation, communication, power generation, education and training, potable water supply, health and national security are undertaken to bring the quality of services in these sectors up to acceptable and desired standards. The Private Sector has the duty to retool and upgrade plant and equipment. This latter process should be assisted not only by fiscal and other policies, but also by public sector examples in the application of enlightened management techniques and in the constant search for new ideas. This will necessitate significant changes in our Industrial Relation System.

27.II.1.11 A social contract between Capital, Labour and the Government should be formulated, with the monitoring agent being a National Tripartite Committee.

27.II.2.1 Lack of a sufficient number of productive and adequately remunerative jobs in the country.

27.II.2.2 Wages in the public service that are still too low to attract and retain the most skilled and talented people.

27.II.2.3 On the supply side of the labour market, there are not only too few technically skilled people, but there also exists a system of technical and vocational education that is inadequate. It should not therefore be surprising that it does not attract the finances required to sustain it even at its low level of quality.

27.II.2.4 A legacy of a weakened educational system, which produces too many entrants into the labour force who are functionally illiterate.

27.II.2.5 Poor relations between unions and employers, and weak mechanisms for the resolution of disputes. These lead to unnecessary strikes, especially in the Public Service.

27.II.2.6 The absence of a policy framework to encourage workers and enterprises in the informal economy to enter the formal economy.

27.II.2.8 Fragmented efforts for addressing the concerns of micro-, small- and medium-scale enterprises.

27.II.2.9 Lack of an adequate financial and institutional basis for workers’ pension programmes.

27.II.2.10 Lack of an effective investigative arm in the Ministry of Labour capable of anticipating incipient industrial disputes, and quickly responding to them.

27.II.2.11 An insufficiently mobile labour force and a lack of supporting mechanisms to promote labour mobility.

27.II.2.12 Lack of trained personnel, capable of coping with the attitudinal problems which currently exist in the workplace, and with those which will arise in the future.

27.III.1 The broad objective of the labour sector is to reduce unemployment and underemployment, and the concomitant poverty, by creating greater avenues for employment, greater labour flexibility and mobility, and by generally enhancing the productivity of both labour and capital. The attainment of this objective will require the successful implementation of many policies in various Chapters of this Strategy. Labour and Employment Policies per se, cannot alone accomplish their realisation.

27.III.2 The sectoral objectives of the Strategy are:-

(i) To encourage the development of labour-intensive industries and modes of production in the short-term and to increase productivity in the medium- to long-term.

(ii) To increase the skills, education and productivity of the labour force through improved technical and vocational education and an ongoing, structured and relevant on-the-job training programme.

(iv) To facilitate the mobility of labour so that workers may more easily move from one industry to another, and from one location to another.

(v) To promote improved working conditions and working environments.

(vi) To define clearly the role, rights and responsibilities of trade unions, employers and Government and to legitimize the right of collective bargaining.

(vii) To ease the transitional problems of workers affected by the restructuring of industries.

(viii) To improve the actuarial and institutional basis for, and benefits from, national pension schemes.

(ix) To restructure the Ministry of Labour thus enhancing its role in the Industrial Relations System, and its functions in the labour market.

27.IV.1 The overall macroeconomics framework of this Strategy is designed to accelerate economic growth, a process that will increase both employment and real wages. In fact, over the next ten years some labour shortages can be expected to appear in certain areas of development. This will give further impetus to increases in real wages, attract more re-migrants and possibly migrants, and accelerate the process of reallocating labour to more remunerative occupations. A policy framework will be maintained that does not lead to an excessively high indirect cost of labour to employers and does not subsidise capital, so that the nation’s economic growth path is as labour-intensive as possible.

27.IV.2 Specific strategies designed with these purposes in mind, which are also described in other chapters in order to assist the reader who is interested in only particular sectors, include the creation of export processing zones, the promotion of micro, small, and medium-scale enterprises, and the creation of new industrial sites which will allocate space for ‘incubators’.

27.IV.3 The creation of export processing zones will provide sources of growth for the entire country in terms of production, employment, foreign exchange earnings, investment and the transfer of technology. EPZs will absorb some of the unemployed and underemployed, and workers from the informal economy.

27.IV.4 The Companies Act will be amended to eliminate overlaps between the personal income tax and corporate taxes. This measure will negate any double taxation for registered micro, small, and medium-scale enterprises.

27.IV.5 A tax rate will be set for registered small companies that is lower than the current corporate tax.

27.IV.6 Legislation which provides for charging household and not commercial rates for public utilities that service registered micro and small scale enterprises will be enacted.

27.IV.7 Legislation that provides for the waiving of stamp duties and other costs associated with the transfer of personal property to a business will be promulgated.

27.IV.8 Technical and Vocational Education and Training (TVET) will be improved and expanded, through the rationalisation of the utilization of technical education and training facilities; the upgrading of curricula; and the strengthening of teaching through special teacher training courses and the recruitment of more highly trained teaching personnel.

27.IV.9 The provision of technical and vocational education and training will be restructured to strengthen the involvement of the private sector in its management.

27.IV.11 The new council will be authorised to receive and allocate international donations and technical assistance in the area of TVET.

27.IV.12 Training outside established institutions will be undertaken by the private sector without direct Government intervention. The private sector could achieve this at a lower cost than Government and it also tends to be more in tune with the requirements of the market.

27.IV.14 As cost recovery is begun in public training institutions, Government will shift its public financing away from the providers of training to the demand side of the market, enabling targeted workers to purchase training within a competitive environment of suppliers. One instrument for doing this is through training vouchers to targeted individuals such as the young, unemployed and women.

27.IV.15 Trained workers will be required to repay Government part of the training costs after gaining employment at the end of training.

27.IV.16 A Labour Market Information System for Guyana will be established in order to provide job seekers with up-to-date information on employment opportunities, and to establish an adequate statistical basis for continuously formulating, implementing and evaluating policies and programmes for human resources development.

27.IV.17 Merit-based promotions and salary increases in the Public Service will be premised on performance evaluations that will use redefined annual performance objectives as the criteria.

27.IV.18 Retraining also will be mandatory in most cases as workers receive wage increases.

27.IV.19 The co-operation of the unions in charting this new course for public service remuneration will be an important aspect of salary negotiations.

27.IV.20 A special Reconciliation and Dispute Resolution Committee will be established to settle disputes between public servants and the Government.

27.IV.22 The strategy envisaged for encouraging labour mobility requires a multifaceted approach. Creating an environment for such mobility require the implementation of many other policies. Besides a decompression of wage scales, improved labour market information and improved TVET, which are dealt with separately, these include policies aimed at breaking the link between social services and the conditions of employment, while fostering efficient housing and land markets.

27.IV.24 This Chapter does not directly address housing and land markets. However, as discussed before, the availability of land has been directly linked to unemployment, underemployment and poverty. In other sectors of this National Development Strategy, the case has been made for a liberalisation of land markets. Government will pursue policies that ensure that investors and small farmers have forms of land tenure that can serve as acceptable collateral for banks, and that land is made freely available to the poor for housing. Opening land markets is important for increasing the productivity of the land, reducing unemployment and underemployment, increasing the income of farmers, and improving the standards of living of the urban poor.

27.IV.25 Proposals for Public Service Reform have been made in other parts of this NDS. However, it should be noted that the objective is to produce a functional, proactive public service that can support a dynamic economy. A principal requirement for this to occur is that public service workers must be adequately remunerated.

27.IV.26 A Social Partnership Agreement will be entered into by the Government of Guyana, the Guyana Trades Union Congress and the Private Sector Commission. This agreement will be based on the recognition that there is a mutuality of interest and an inherent interdependence among the three parties; and on an acknowledgement that the success of any sustained social and economic progress in Guyana will depend upon their collective commitment to a philosophy of governance which is characterised by participatory democracy and the subjugation of sectoral interests to the national good.