T&T on the Road to Ruin

By VASANT BHARATH

Trade and Industry Minister PAULA GOPEE SCOON

Independent local analysts have been, for quite some time, speaking truth to power but the sobering new reports of the International Monetary Fund (IMF) and World Bank bring home the reality of the dismal state of the Trinidad and Tobago economy.

The World Bank’s assertion that the T&T economy would contract by 0.5 per cent during the current fiscal year compounds the IMF’s report of zero growth. According to the World Bank, this country is one of only four Latin American and Caribbean states whose respective economies are projected to weaken in 2019. T&T is in the undesirable company of strife-torn Venezuela, where the economy is in free fall, joblessness is rampant, investors have fled and inflation is well over one million per cent. Our other two ‘comrades’ are Nicaragua and Argentina! Startlingly, Trinidad and Tobago is the only Caribbean economy projected to shrink this year. Apart from T&T, “the Caribbean has begun healthy growth” of four per cent in 2018 and 3.2 per cent in 2019, the World Bank revealed.

T&T has the highest fiscal deficit

The report also stated that Trinidad and Tobago has the highest fiscal deficit as a percentage of GDP in Central America and the Caribbean. According to the IMF figures, Trinidad and Tobago was one of ONLY three of 32 countries in Latin America and the Caribbean that registered a decline in its economy in 2017. The other two countries that saw declines were Venezuela at -14% and Dominica at -4.2%, the latter that was recovering from devastating floods. Those sombre economic analyses expose the senseless braggadocio and bluster of Prime Minister Dr Keith Rowley (“We have stabilized the economy”), Finance Minister Colm Imbert (“I can see clearly now”) and Trade Minister Paula Gopee-Scoon (“We are out of the recession”). Indeed, in presenting the Mid-Year Budget Review 2018, Minister Imbert said that turnaround in the economy is on the way and “we are witnessing a welcomed upturn... with a turnaround in energy and non-energy sectors.” He said economic growth is expected at 2% in 2018 and 2.2% in 2019. “We are entering an era of macro-economic stability. The economy has turned around. Revenue collection is up. The non-energy sector is growing. The energy sector is booming,” said Imbert.

If you repeat a lie often, enough it becomes the truth If you repeat a lie often Imbert would have convinced enough it becomes the truth and some through the harangue in May 2018 that “the economy is not turning around; it has, in fact, turned around.” In fact, nothing could be further from the truth! However, the raw evidence illustrates a dark, gloomy scenario under the economic mismanagement and incompetence of the unproductive and vision less PNM administration. Trinidad and Tobago’s financial borrowings have hit record levels of a staggering $100 billion, and we are now accessing loans to service existing debts of the Central Government and non-performing State enterprises. The government has raided the rainy-day Heritage and Stabilization Fund on several occasions has cruelly taxed already overburdened citizens and is routinely denying businesses their Value Added Tax refunds. The three credit rating agencies, Moodys, S&P and Fitch continue to warn of institutional weaknesses, high levels of debt, need for public service reform and labor market competitiveness. Unemployment is at the worst levels since the mid-1990s, and the middle class has been virtually decimated. The domestic business sector, which has collective $3.5 billion at hand in local banks, is declining to invest because of a downright lack of confidence in the economy and the continued absence of effective leadership and a rescue plan.

After almost four years, the Gov’t cannot identify a single international investor

The country has slumped badly in the international ease of doing business index, 40 places in the last three years, which makes it almost impossible to attract new business, local or foreign, in an increasingly borderless and competitive world. After almost four years, the government cannot identify a single international investor. The foreign exchange crunch and the government’s tardiness in disbursing VAT refunds have adversely impacted many businesses, especially those that are barely getting by New President of the Manufacturers Association Franka Costelloe is correct in her analysis that “something has to give.” Ms Costelloe is also accurate that the government must recognize that current regulation and policies are holding back business growth. Despite repeated grandstanding, the government has made no measurable efforts to diversify the economy. The upcoming mid-year review is likely to toss up another barrage of blowhards, but no definitive measures to get the economy on a growth path, to woo business investments and to facilitate job creation. A graphic example of the government’s inertia and sterility is the recent declaration by Agriculture Minister Clarence Rambharat that the astounding $6 billion annual food import bill is “out of his hands”

The Gov’t has abandoned essential tripartite discussions

This government has abandoned essential tripartite discussions, despite ongoing concerns about the industrial relations climate. Ms Costelloe has called on the government to “reshape the existing industrial relations climate, with the goal of improving the national work ethic.” The ruling administration has sidelined important policy recommendations of the business community and, instead, has gotten high on its supply of rhetoric and bluster. If he is true to form, Minister Imbert will again excitedly issue pie-in the-sky figures of economic growth and would damn all critics during his upcoming mid-year fiscal review. But the stark reality tells a disturbing story. This government is clearly acting on the premise that a lie told once remains a lie but a lie told a thousand times becomes the truth. This is incompetence of staggering proportions that this country cannot afford.