THE EDITOR: The Prime Minister says Government can't afford to give public servants a pay increase.
Economically speaking, the solution to this problem is straightforward: reduce the size of the public service.
That too many people are employed in the public sector is not in doubt. Several reports going back decades have documented this.
If redundant public servants are fired, the rest can get a pay increase while the Government will reduce its monthly payroll.
Government is saddled with recurrent expenditure challenges and will continue to be despite the recent war-driven windfall in energy revenues.
Again, the economic solution is straightforward: sell off or close down all state enterprises that are losing money (ie, almost all of them).
This will reduce the drain on the treasury and, more importantly, allow private-sector resources to be more efficiently deployed providing the goods and services that these state companies have crowded out. Affordable housing is a prime example of this.
It is unlikely this Government will adopt any of these measures, however, since what is economically straightforward is usually not politically prudent.
ELTON SINGH
Couva
