$800 billion later, where are we? – Part 3

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Eighteen years into the 21st century, and almost $800 billion spent in annual budgeting, Trinidad and Tobago still finds itself at the mercy of global economic shocks and price fluctuations in oil and gas.
 
The economy is not diversified and issues such as employment and foreign exchange continue to strangle our nation’s progress.
 
A great deal of debate exists today about the economy, but centres on who spent money, corruption allegations and wastage.
 
Since the year 2000, the PNM has governed for over 11 years, and the UNC has governed for six years; yet the debate from the PNM side places Trinidad and Tobago’s underdevelopment squarely on the shoulders of political opponents.
 
The TTWhistleblower today continues a multi-part analysis of how almost $800 billion came and went, leaving Trinidad and Tobago facing serious economic challenges in 2018.
Changing of the guard
The look of utter shock on the face of Patrick Manning on the night of 24 May 2010 told of a man who sincerely believed he would win.

In January of that year, an historic changed occurred in the then Opposition United National Congress (UNC) that saw the party’s founder and Political Leader, Basdeo Panday, being nudged out by a landslide leadership victory won by Kamla Persad-Bissessar.

The coming to leadership of Persad-Bissessar appeared to re-energise the UNC membership and calls for fresh general elections became more and more frequent.

Manning by then was embattled with numerous allegations of corruption, spiraling crime, increasing food prices, high inflation and accusations of arrogance all hanging over his head. By April of that year, Manning would call the second snap election in his long political career, and for the second time, would be defeated.

Kamla Persad-Bissessar dethroned Manning’s PNM, taking 29 of 41 Parliamentary seats, as Leader of the UNC, and Leader of the People’s Partnership which brought together five political parties – the UNC, the Congress of the People, The Movement for Social Justice, the Tobago Organisation of the People, and the National Joint Action Committee.

The rise of Kamla Persad-Bissessar and the People’s Partnership

The end of May 2010 saw the rise of Trinidad and Tobago’s first female Prime Minister, another in a string of firsts for Persad-Bissessar, who was also the first female Leader of the Opposition and first female leader of a major political party.

As discussed in Part 2 of this series, hers was a dubious inheritance, with an economy on the slide, public debt increasing in the face of declining revenue, high food prices, increasing unemployment, a host of outstanding payments to contractors, outstanding VAT refunds, outstanding payments at State companies and a spiraling tide of criminality.

Still, as she appointed her Cabinet and took on the role of Prime Minister, she put her Ministers to work on all fronts, and within one year, was able to report to the Parliament that a turnaround had begun.

Public spending

Key to the execution of her role was calling rampant corruption to order through a number of public enquiries into allegations against the Manning Administration, and reconfiguring public spending.

As she spoke publicly on her intentions, she made clear that mega-project development for the attainment of first world status had less to do with tall buildings, and more to do with a nation with a strong infrastructure platform and competitive business environment.

This, she said, was key to inspiring business expansion, community development, FDI and economic diversification.

One of the key projects she undertook was the Highway from San Fernando to Point Fortin which was repeatedly promised since 1961, but never delivered. Taking on the challenge of delivering, Persad-Bissessar believed the project would open up fertile space for small, medium and large business expansion, and superior industrial access.

Looking to the future, Persad-Bissessar also made good on her promise of technology for high school students, delivering laptop computers to every secondary school students for the five years of her Prime Ministership.
Spending was also redirected with the mission of providing ample resources to the Protective Services to be able to credibly respond to crime and violence, an effort which saw during the time of her administration the lowest level of crime in an over 30 year period.

With Manning having tripled budgeting during his time, Persad-Bissessar’s budget increases were far more restrained:

·         In 2011, Finance Minister Winston Dookeran delivered a $51.5 billion budget, up from $44.3 billion the previous year;

·         In 2012, the budget was $52.8 billion;

·         In 2013, under new Finance Minister Larry Howai, the budget was $57.9 billion;

·         In 2014, the budget was $64.8 billion, and

·         In 2015, the budget was $64.7 billion, which was subsequently reduced by an estimated $7 billion through spending cuts as preemptive measures were taken in the face of falling energy prices.

What the nation earned

Despite the regular cries from the new PNM Dr Keith Rowley Opposition of mismanagement, the Persad-Bissessar Administration’s reconfiguration of public spending started showing signs of actually achieving benefit for the population.

While the People’s Partnership regularly published its achievements as a sort of annual report to the nation, there were some very important milestones which were achieved through more disciplined and focused public spending:

·         One million kilometres of new waterlines, increasing access to potable water from approximately 20 percent of the population in 2010 to over 75 percent of the population in 2015;

·         200 school construction projects were undertaken, with 100 being completed and 100 being almost complete by 2015;

·         HCU depositors were finally reimbursed with over $600 million being allocated and distributed;

·         130 collective agreements were negotiated and settled, securing unionized workers with back pay entitlements and modern wage levels;

·         The minimum wage was increased three times;

·         A $750 million national road repair and enhancement programme;

·         In agriculture, 300 water ponds costing $7.5 million and 200 kilometres of agricultural access roads were undertaken and completed;

·         Generated higher Government revenue within its first year without new taxes, generating a total of $59.249 billion in revenue between June 2010 and June 2011.

Even the legislative agenda appeared far more brisk, with the People’s Partnership having 47 sittings of the House of Representatives in its first 12 months, bringing 26 new Bills to Parliament.

The fundamentals

More than just what may be seen as political achievements, however, were the facts of the economic fundamentals and key bench marks that are irrefutable.

After expenditure of approximately $400 billion during the Manning Administration, Government revenue had declined to $39 billion for its final fiscal year.

By 2015, after five years of the Persad-Bissessar Administration, Government revenue stood at approximately $60 billion, having budgeted a total of $288 billion during the five-year term.

The value of the Heritage and Stabilisation Fund expanded by 55 percent during the Persad-Bissessar Administration, reaching US$5.6 billion in 2015.

Similarly, during this period, Foreign Exchange Reserves moved from US$8.9 billion to $10.3 billion.

Notwithstanding the rapid-fire accusations of corruption by the then Rowley Opposition, Trinidad & Tobago held a rank of 91 in Transparency International’s Global Corruption perception index in 2011.

By 2013, Trinidad & Tobago improved to the rank of 83 in Transparency International’s Global Corruption Perception index. And by the 2015 Trinidad & Tobago CPI improved even further to 72; an almost 20 point improvement during the Kamla Persad-Bissessar Administration.

It is also noteworthy that the public discussion on the budget deficit has not always been entirely accurate.

Total Government revenue from October 2014 to August 2015 was TT$47.7 billion, creating a deficit position of TT$2.7 billion. This was at the time that global energy prices began a protracted slide.

By the 30 September end of the fiscal year, approximately $13 billion in revenue was expected which put revenue for the 2015 fiscal period at approximately $60 billion. The revenues to be collected included:

•          Taxes – $6.5billion;

•          Initial Public Offering funds – $1.5 billion;

•          Trinidad Generation Unlimited – US$550 million loan repayment.

In case any of the revenues were delayed, a failsafe was negotiated with borrowing of TT$1 billion which would have been used in the absence of other sources.

These amounts would have easily cleared the $9 billion overdraft and provided additional cash to commence paying public servants arrears. It would also have left some wiggle room to negotiate the rest.

Readers will recall that the Finance Minister Colm Imbert chose to score cheap political points by firing off about the overdraft, but speaking nothing about the anticipated September revenue, which former Minister Larry Howai clearly outlined to him in a meeting before the 2016 budget.
For the previous fiscal period (2013-2014) the projected deficit was TT$6.3 billion, but the first three quarters of this budget period actually recorded a surplus position of TT$1.97 billion.

The difference five years made

When conjecture and raw politics are stripped from the public debate on the Government of the 2010 to 2015 period, it is not difficult to see the kind of difference one five-year term made.

In addition to the facts articulated here, education was transformed, with tertiary participation of over 65%. Trinidad and Tobago also became the first nation in the world to achieve universal pre-school education.

In addition to achieving the highest levels of FDI in this country’s economic history, the Persad-Bissessar Administration also negotiated the most bilateral trade agreements than any other Government in a five-year term, opening up new markets for manufacturers and exporters.

Still public perception created by persistence in the allegations made by the then Rowley Opposition took its toll and by the September General Election of 2015, Kamla Persad-Bissessar’s People’s Partnership was defeated, making way yet again for a return by the PNM.

In Part 4 of this series, we look at the coming to office of Dr Keith Rowley, his economic inheritance, and what he has done with it in two and a half years.

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