expectations of employees and employers alike. the social partners have over the last decade demonstrated that there are gains from dialogue, sharing of information and judicious use of mediation when necessary. indeed the barbados model of social partnership has made a name for itself not only in the caribbean, but further afield and countries are trying to emulate it. the continued collaboration of the social partners is even more vital in this environment as we enter a new era of challenge on many fronts, where we will grapple with the demands of regional collaboration as we are presently experiencing and the required infrastructural support, international and regional financial uncertainty and global recession. in an environment where the national pie is shrinking there will be need to restrain wages in line with productivity gains even more so than before and to relate this to ensuring the viability of business. at the same time we cannot compromise on areas such as workplace safety for our workers and a comfortable working environment. in addition, on the government side, on - going tax initiatives designed to benefit the private sector and the workers will be important. the private sector has become more complex and vibrant, and benchmarking, pay - forperformance schemes and other productivity enhancement initiatives, are becoming more commonplace among leading companies. however, it is important going forward for the private sector to become more competitive because the trend toward more liberal trading regimes and the signing of recent agreements will eventually mean even greater competition at home, especially in services, and greater opportunities abroad. it would be useful during this lull in the previously hectic pace of corporate expansion to pause and reflect on how the corporate sector can best position itself in the likely future resurgence of economic activity and to do so more competitively. economy on the economic front, the tourism sector has begun to weaken as the economies of our major markets deal with major economic downturns and overall real growth has been sluggish as barbados continues to feel the effects of the international recession. this has of course brought economic challenges. while the unemployment rate has remained in single digits there is a likelihood of some deterioration in the near future as barbados begins to be more impacted by the widening and deepening global economic recession. in order to lessen the impact of the global recession, keeping employment up will be important, since, if we cannot do so, spending will decline and a decline in spending means a worsening of the impact of the recession. it will be important for the social partners to collaborate closely to arrest this development.

they have involved neither direct nor indirect fiscal transfers. today these programmes are seen as a success, although the picture of a greek recovery is still somewhat blurred, which is hardly surprising. after all, it took several decades before denmark had fully recovered from the situation in the early 1980s, when the economic challenges in some respects resembled those faced by greece today. the debts of greece have been written down, but only for private - sector creditors. the interest terms have been very accommodative and greece annually saves several per cent of gdp on its government interest payments. for example, portugal's interest expenses are higher, even though its debt is lower. but the interest rate has not been lower than that at which the imf and esm have been able to borrow in the market. the principals of the loans have not been reduced. instalments and interest payments have been postponed considerably, but have not been written down. there has been a reduction in the margin lenders add to their financing costs, and there is a possibility that the ecb will waive its profit on market purchases of greek government bonds, but again there have not been any fiscal transfers from other member states. in the international press, increased write - down of debt, also to other governments, has been called for. but write - down of government lending is a fiscal transfer, and there are good reasons why this has not taken place. in that situation, taxpayers in the lender states would feel that they were bearing the costs of decisions made in borrower states – decisions the imf, international monetary fund, established in 1944. the imf today has 189 member countries and a lending capacity of around 1, 000 billion dollars. the esm, european stability mechanism, established by the euro area member states in 2012 as an intergovernmental institution. the esm has a lending capacity of 500 billion euro. side 6 af 9 that they could not influence. this would provide a basis for political conflicts in and between member states. taxpayers and the government of the borrower state would have a joint incentive to ease fiscal plans if others were ultimately to foot the bill. and it may be difficult to raise government loans for other crisis - ridden member states in future if they can subsequently be converted into income transfers. fiscal transfers can be perceived as " taxation without representation ". and there is a legitimate need for member states to be allowed to test their own policies and hence also to bear the consequences. a balance is struck