Another positive aspect is that this process gives signals to the rest of the employees and potential entrants that they should also acquire and master the skills that are in short supply if they have to advance their careers or earn more money. Overtime, the expansion in the supply brings back the equilibrium in the market and normalizes compensation packages.
The answer: by containing aggregate demand, and thereby limiting the demand for imports, to fall within the supply of foreign exchange. The tools for aggregate demand management are government revenue, expenditure and the strategy for financing government’s deficit. These are the principles underlying the Barbados economic strategy. The global recession has been a challenge for Barbados.