The TTWhistleblower continues this series with the hope of providing readers with fact, reality and also a bit of hope that despite the current reality in Trinidad and Tobago, our population still has what it takes to pull it through.
In Part 1 we looked at the past year and political expectations for 2018. Today in Part 2 we look more at public expectations and towards the experts on what’s there for us to look forward to in the coming 12 months.
Expectations – Public Management and Confidence
It would not be too unforgiving to ask whether one can have confidence in the capability and leadership competence of a man who says: “A golf course is like a woman, so you have to groom her every day, otherwise it turns into pasture.”
The collapse of the Inter-Island Ferry Service, increasing tension with airport staff and on the air-bridge and the great distance between the present and a solution have caused a great deal of irritation for the people of Trinidad and Tobago.
But what has struck at the very psyche of Trinidad and Tobago is a collapse of confidence in the economy by consumers, business and investors on account of poor fiscal management, a strongly negative tone from Government officials and a ballooning public debt that always comes with the chorus of ‘tings bad, we can’t pay bills.’
According to the Central Bank’s most recent Economic Bulletin: “Latest data provided by the Ministry of Finance indicated that the Central Government recorded a deficit of $12.1 billion in the first ten months of the FY 2016/17 (October 2016 to July 2017). This deficit was above the revised budgeted amount of $5.9 billion for FY 2016/17 and the $7.5 billion recorded in the same period of the previous fiscal year.”
The total deficit position under the Dr Keith Rowley Administration for two fiscal cycles amount to almost $20 billion.
Yes, challenges may give a Government an allowable misjudgment threshold, but there can be no excuse for basically miscalculating your annual budgets to the tune of $20 billion; it points to a complete absence of strategic planning and in many ways, incompetence.
Especially when one notes from the Central Bank: “Energy revenue increased by 17.5 percent (year-on-year) due to higher international oil and gas prices over the first ten months to July 2017.”
The public sector debt ballooned alongside the deficit, jumping aggressively according to the Central Bank: “Total public sector debt outstanding stood at $120.3 billion (77.9 percent of GDP) at the end of June 2017, up from $119.7 billion at the end of September 2016.”
“The Central Government borrowed roughly $5.7 billion on the domestic market for budgetary support. In particular, in the nine months to June 2017, five bonds were issued under the Development Loans Act.”
In an Administration that is still using the excuse of ‘it’s the previous Government’s fault’ for not living up to its own promises, one wonders what to expect with the advent of new taxes and a still aggressive pursuit of the PNM’s 2001-2010 Property Tax regime.
It is frightening considering that this is taking place in an environment where the Government is squeezing revenue out of the population by new taxes, and not through new revenue streams from investments and diversification measures.
Expectations – Economic Recovery
In the preceding paragraphs, one might say authoring the following paragraphs are fairly straightforward – political incompetence, the lack of a clear fiscal strategy and political arrogance can seriously hinder this country’s chance at recovery.
But some are still holding out hope for clear signs of recovery and a turning of the tide in the cost of living and the overall performance of the economy.
As reported in the Trinidad Guardian on 15 December 2017: “Latest projections from the Economic Commission for Latin America and the Caribbean (ECLAC) are for 0.5 per cent growth in the T&T economy in 2018 based on expansion in the energy sector from stronger upstream gas supply.”
Predicting a 2.3% contraction in the economy for 2017, ECLAC called it an improvement over the 6% contraction in 2016.
From the International Monetary Fund (IMF), also some optimism according to this news report in early November last year: “The International Monetary Fund (IMF) has projected real gross domestic product (GDP) growth of 1.9 percent for Trinidad and Tobago in 2018. However, it noted that more adjustment is needed.”
The Republic Bank Economic Newsletter for December 2017: “Based on recent information it was also revealed that the fiscal deficit target for 2016/2017 was missed by some distance. Weak consumer demand resulted in retail prices being contained for the period and the slowing down of business credit. Foreign reserves continued to dwindle, falling below 10 months of import cover, which was the lowest level since May, 2008.”
However, it optimistically adds: “While the economy is expected to decline by an estimated 2.3 percent in 2017, growth is projected to be positive in early 2018 due to increased energy sector production and a slight recovery in non-energy sector activity.”
The business view
With confidence in the Government and economy having tumbled all around, optimism by business groups could give a little more than a glimmer of hope.
The President of the Trinidad and Tobago Manufacturers Association (TTMA) Christopher Alcazar said that while signs of recovery may take some time, it would show this year.
He said despite economic inertia, macro-economic fundamentals, continued to be largely favorable.
The Couva/ Point Lisas Chamber of Commerce president Ramchand Rajbal Maraj urged Government “to work with the business community to turn the economy around and not seek to blame previous Governments.”
At the Chaguanas Chamber of Commerce, the view was the Christmas season of 2017 was “says it’s the worst year yet for businessmen in the central area.”
While expressing a positive outlook for 2018, a newspaper report quoted Chamber President, Vishnu Charran as saying: “Over the years business sales have dropped but this year it’s the worst ever the Chamber has seen, as sales are the lowest ever.”
A Trinidad Guardian report on 21 December 2017 stated: “The economic pundits and soothsayers have all been singing the refrain that 2018 is likely to be a better year for the T&T economy than the last three years…”
Even with 18 murders having been reported in seven days, an average of over two murders per day, Dr Keith Rowley has also managed to change his tone, perhaps realizing that continuous negative commentary from the Government was making conditions worse.
Rowley, however, could not resist abdicating responsibility as has been his routine. According to this Newsday report on 08 January 2018: “On the economy, Rowley admitted the past two years were hard in light of a 90 per cent fall in tax revenues from the energy sector and a 70 per cent hike in Public Debt (from 2010 to 2015).
But he stood by his Government’s measures. With the oil-price shock not a short-term cyclical phenomenon but a long-term structural industry change, he said fiscal stability has been an urgent prerequisite to economic diversification. Rowley said Government has borrowed to prevent economic collapse, despite voluminous advice from many quarters.”
Not everyone is optimistic, however, about changing fortunes in 2018.
The American Chamber (AMCHAM) believes 2018 will be another difficult year. And Economist Dr Marlene Attz believes that none of the major economic factors driving hardships have changed and 2018 will be another year of challenges.