Understanding Proposed Changes to Barbados' National Insurance Scheme and Other Reforms

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By Ralph Jemmott

I watched Prime Minister Mia Amor Mottley’s television address to the nation on Wednesday, August 25, 2023. It lasted just over 120 minutes and focused primarily on the thorny issues related to the proposed changes to the National Insurance Scheme (NIS) Pension Scheme over the next ten years.

However, the discourse did not stop there. She spoke briefly to the Integrity Commission, proposed reforms to state-owned enterprises and the departure of Mr Jens Thraenhart from the Barbados Tourism Marketing Inc. (BTMI).

Our Prime Minister was as articulate as she has ever been and she did a reasonably good job in explaining the nature of the problems our country faces. There are problems we have to face and, if possible, fix. Not all problems are fixable, at least not with the ease that some politicians seem to think. Prime Minister Mottley put the NIS problem realistically, in what she called “context”.

Certain undeniable truths have to be confronted and the NIS needs to be reformed and stabilised. Linear logic or simple common sense would indicate that any national social security system cannot long endure in a context where increased payouts of pensions exceed diminishing revenues, or where low population growth is compounded by a dependent, increasingly ageing populace.

No amount of politicking on either side of the great divide can ignore the reality of the problems facing Barbados’ social security scheme.

The Prime Minister indicated that 52 per cent of Barbadians whose pensions started in 2000 were still alive up to the middle of 2022 and being paid pensions by the NIS. Having myself retired two years after 2000, one appreciates the benefits of the NIS. It keeps me solvent.

As the late Sir Frank Alleyne used to point out, Barbados has developed a fairly comprehensive welfare structure which it currently struggles to sustain given the last two decades of marginal economic growth. The newest pension reform proposals that increase the pensionable age, first from to 67.5 years in 2028 and then to 68 years in 2034, is viewed by Ms Mottley as fair and reasonable. The Prime Minister herself has pointed out that Barbadians’ contributory pension of $1 052 was the highest in the Eastern Caribbean, compared to $900 for Trinidad and Tobago and $792 in The Bahamas. We should perhaps be thankful for small, or not-so-small, mercies.

My major bone of contention with the Prime Minister’s address was her notion of Barbados becoming “a world class” society, apparently by the year 2030 – that is, in seven years’ time. Her predecessor of fond memory, Owen S. Arthur had suggested that Barbados was on the way to achieving “first world status”.

One was never sure what exactly that implied. What we do know is that he sold off controlling interests in some of our national companies, including the Barbados National Bank (BNB) and the Insurance Corporation of Barbados Ltd (ICBL), to keep Barbados going. Increasingly, it is felt that the sale of BNB was a grossly short-sighted error of judgement. But politics is the art of the possible. That is why talkative academics find it so easy to discourse about politics while working politicians find it increasingly hard to implement successfully.

Now we are promised world class status in seven years. Pray tell, what is this “world class” condition that we are aiming at? When Barbados becomes world-class, what would it look like – Monaco, Geneva, Cap D’ Antibes, Tokyo or Singapore? The talk about world class comes with the notion that if the country’s growth continues on an upward trajectory, thus achieving world class status, then the possibility exists that in time, the pensionable age might actually be lowered below 68 years. What in the Barbadian polity today, both economically and socially, would suggest that Barbados is on a progressively upward trajectory to something that would be regarded as world class? What in the index of economic indicators might incline one to think such? High inflation, debt and deficits, persistent borrowings? Tell that to the growing number of homeless and vagrants or ‘scrunters’ within the Barbadian underclass. Will the economic surplus that brings about a world class Barbados be equitably redistributed or will it fall into the hands of a few?

The Prime Minister responded to a question posed by the media during the question and answer session related to the leadership of the BTMI. Her reply was that the BTMI and Mr Thraenhart had come to a mutual parting and that it was now a “top priority” to find “the right person” to fill the vacated post. Minister of Tourism Ian Gooding-Edghill and the Board of the BTMI have been tasked with finding a replacement for Jens Thraenhart. Ms Mottley concluded that “we have to get it right.” One can only wonder what would constitute getting it right and what was so ‘wrong’ about the departed CEO, given the Prime Minister’s admission that positive signs still abounded in Barbados’ tourism sector. She reminded her audience that, “we have recovered most of our markets.” The Prime Minister also noted that “there are not a lot of people in Barbados who work in the tourism sector who may be willing to come into the public sector…. That is part of the construct that we have.” I am not sure what is meant by “the construct”, assuming that it meant anything. Is it a question of remuneration or an issue related to the politics of the sector?

What was gratifying in our Prime Minister’s address was her assurance that she had no problem with persons taking to the streets to protest. The Down to Brass Tacks caller known as ‘Ms Undecided’ once said that it was Ms Mottley herself who taught us how to march. Not quite true, but you may recall the picture of the lady dressed in all white. The Prime Minister is quoted as saying: “For those who want to protest, I’m the first to say protest because a sign of protest is your right and your rights in a democratic country. If they march every week, it is the biggest confirmation that Barbados is truly a democratic state.”

That should lay to rest chatter about a looming autocracy. If we should ever get an autocracy, it will be because we deserve it.

Ralph Jemmott is a retired educator and regular contributor on social issues.