Minister in the Ministry of Finance, Dr. Kennedy Swaratsingh, has defended the government’s decision to pay outstanding backpay, saying the move will stimulate the economy and strengthen long-term growth.
Speaking at a National Conversation on “The Impact of Backpay Promises on the Macroeconomy” at the University of the West Indies, he insisted the government’s backpay commitments are both morally justified and economically strategic.
“This decision will stimulate aggregate demand and support a robust path to economic recovery. It will unleash a multiplier effect benefiting businesses, empowering communities, and fuelling local growth. It will strengthen household savings and enable wiser, long-term investments that uplift families and spur entrepreneurship. At the heart of our plan is the government’s Revitalisation Blueprint and diversification thrust. This initiative will chart a clear path to broader prosperity by expanding the tax base, nurturing Small and Micro Enterprises, and transitioning higher wages into higher productivity through the implementation of the ILO productivity ecosystem.”
He argued that backpay acts as a targeted injection into the economy, especially in sectors where working-class households spend most of their income.
“From a macroeconomic standpoint, backpay represents a targeted injection into aggregated demand to stimulate economic activity. It will impact the possible macroeconomic impacts along the following themes: labour force participation rate, multiplier effect, savings and investments, influence on crime, and improvement in living standards.”