Published On: Thu, Nov 7th, 2013

Stakeholders fear employment issue has reached the tipping point

Curacao statisticsWILLEMSTAD - The local economy has now reached the tipping point in which the employment issue has become a society-wide concern.  So is the consensus of the labor and commercial sectors.  Kolaborativo, the national tripartite dialogue platform, has come to this conclusion in their recent review of available data. Further, these stakeholders conclude that the current unemployment levels and the acceleration of layoffs and business closing require national dialogue.

About 2000 persons have become unemployed since January 2013.  This is not the result of just the actions of one government; it is the cumulative effect of non-action and lack of long-term thinking and reform by multiple governments.

Various sources use a formula to compare the same effect in Holland by taking the unemployment rate and multiplying it by 100.  If that were applied, the current unemployment level in Curacao would be equal to 200,000 persons losing their jobs in Holland within 10 months' time.  This would surely be called an economic and social crisis and would require a crisis plan and national dialogue.

It must be stated that due to the lack of transparency, the stakeholders had to rely on reports from KvK, VBC, SSK, CGTC and the dismissal committee to compile this list that cannot be completely validated but shows clearly the trend.

 

Curaçao Increased Unemployment Figures 2013 (January-October)

100 x = comparison to same effect in NL

Entity/sector Number of employees Reason
AMFO projects

375

Government decision regarding local funding/view of NL
DAE

300

Bankruptcy
Aqualectra

250

Government decision regarding budget
Building Depot

75

Fire
MEESPIERSON

45

International corporate decision
Importers (reduction of force)

150

AOV/ZV/9% gov. decision
Small Businesses (less that 50)

160

AOV/ZV/9% gov. decision
Freezone

50

Global economy
Horeca

60

Economy
Construction

50

Economy
Government employees (reduction of force required)

160

10/10/10 requires 1000+ through reduction of force
Veneto Hotel and Casino

15+

Economy
Kura Hulanda Otrabanda

80

Bankruptcy
Kura Hulanda Lodge

70

Bankruptcy
Other

70

 
Total

1910+

 

 

The stakeholders of Kolaborativo, as stakeholders and keepers of the economy and employment, have collected and are reporting this data to inform the community.

On a continuous basis these stakeholders attempt to dialogue with government and hope that by informing the community that government will acknowledge the severity of the situation and will come to the table to discuss possible interventions and long-term solutions.

The segment of society most affected is the skilled worker and the lower middle class.  Some of these people have been absorbed by other businesses in spite of the fact that many businesses are reluctant to hire due to the economic downturn.  The consequence of this will be a diminishing middle class that the government depends on for the government's revenue stream and for their spending power.

The reasons for the unemployment are varied.  The island unemployment is not only due to global factors.  They are also the result of the absence over the years of clear long term economic and labor force planning with flexible labor force laws.

In 2008 Kolaborativo organized a large-scale national dialogue, at the request of the government, on the development of the labor force.  The agreed points were formulated in the Labor Force Development Plan and Policy recommendations (LFDP), in which it was proposed that the integrated approach to developing a globally competitive labor market must include LONG TERM solutions to the jobs and skills disconnect.  This plan included education reform, business and government policy changes, and local and regional public-private partnerships to create a flexible and strong labor force.  This detailed plan was part of the 2006 Master Plan for Curacao approved by the island government and was one of the sub-plans to be developed through tripartite dialogue.

Further, it was reported that the only way to address the growing employment concerns was for the country's principle community players (labor, commerce, and government represented in Kolaborativo, according to ILO Conventions) to formulate a shared vision that helps them reinvent the education to employment talent creation system.  If this had been continued, workers would have a broader set of skills that would create the opportunity for them to move across sectors to remain employed during economic downturns in one or more of the commerce sectors. Such planning and policies would have averted the unemployment situation we are now experiencing.

The lack of a globally competitive education and training and retraining of adults will fuel unemployment and lead to more crime.  If one looks at the data on crime rates, and compare to Holland, there are 12 violent crimes for every 100,000 persons.  In Curacao the rate is 329 violent crimes for every 100,000.  How does the government plan to counteract this steady increase?

Also defined in the Labor Force Development Plan were clearly stated major initiatives focused on rebuilding the jobs pipeline that connects people to good jobs and careers over a lifetime.  This would have reinforced the economic vitality of local businesses and the local economy, and help fend off the effects of the current economy downturn.

The stakeholders take note that it is the position of multiple government to not fully participate in tripartite national dialogue or to implement the agreed-upon large- scale plans that have been developed over the last decade through this proven process, with representative input from all segments of society.

As social partners we lack confidence in the political process due to the lack of transparency, and the lack of political stability.

Most recently, in December 2012, government asked Kolaborativo to coordinate a national dialogue regarding AOV/ZV/BZV.  The recommendations regarding AOV/ZV took into count that, if implemented, these actions would cause vulnerable employers to reduce their workforce.  It was predicted that as many as 1500 persons would be affected. Recent economic indicators show a -1.5% growth beginning in the third quarter of 2013 with a likely negative increase to come.  This will mean a continuation of the negative trend leading to more unemployment.  Did the government plan for this possible employment change?  Has this contributed to the crisis?  What has the government done to counteract this?

The stakeholders are also very concerned about the dysfunction of the Department of Labor, leading to the inability of the Dismissal Committee to do its job.  Although this committee is supposed to be tripartite, its ability to function during this period has been jeopardized by many problems within the capacities of the department as well as the continuous turnover of employees who are responsible for the preparation and data collection regarding the cases related to unemployment.

Possible solutions, scenarios or interventions are available if we look to others in the world.

Counter measures to mitigate the effects of the government austerity measures must be discussed and agreed upon.

What if we worked together and through Kolaborativo's national dialogue platform, we created a stimulus package to counter the negative effects of the current government's austerity measures?

In the very near future, Kolaborativo's labor and commercial sector representatives look forward to a meeting with the Prime Minister to discuss "dialogue".  In this meeting we hope to reestablish the participation of government in ongoing dialogue whereby we can discuss the follow questions, among others:

What is the effect on the government's revenue collection?

What actions have been taken to date by the government to restore confidence in the economy?

What actions have been taken to date by the government to reverse the downward employment trend?

The stakeholders of Kolaborativo's labor and commerce sector hope that government will acknowledge and reply to their request to participate in and listen to the stakeholders concerns and call for national dialogue to this society-wide concern.   Collaboration is always better than confrontation.

 

 

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