$800 billion later, where are we? – Part 4

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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.

The guard changes again

Despite the performance of the Persad-Bissessar Administration of 2010 to 2015, public perception would be one of the major maladies that hurt the political stocks of the People’s Partnership.

Even with a three-month campaign which gave sufficient time to credibly deal with the threats perception posed, Persad-Bissessar’s UNC/People’s Partnership union went from a 2010 position of 29 seats, to 18 seats, and Dr Keith Rowley’s PNM emerged victorious in the 08 September General Election with 23 seats.

Now installed as Prime Minister, the PNM Leader Dr Rowley’s first task was preparing and delivering a budget in time for the end of the 2015 fiscal year at 30 September 2015. Heavy weather was made about having to ‘rush’ the budget to ensure continuity, despite comments questioning whether Dr Rowley was prepared for his victory, and in that preparation, would have had a clear idea of what he wanted his budget to look like.

Still, the first budget was delivered by the Rowley Administration’s pick for Finance Minister, Colm Imbert, who appeared then, and has remained to now fixated on the politics of Government, rather than performance and delivery.

The first PNM budget in five years

It might be said that the nation had become accustomed to a performance driven Government and despite a change that created some consternation for those who did not support a PNM Rowley Administration, many expected that sufficient progress had been made to ensure that the seeds of harsh economic conditions would not have to be sown and tended.

The hope at the start of the Rowley Administration was that ‘we can ride this out’. But for some, Dr Rowley’s statement before the election that ‘we will continue from where we left off…’ triggered a fear that for many, has now become a reality – unemployment, high prices, business closures, increased costs for fuel and education, and political arrogance and aloofness.

After inheriting a Government revenue position of approximately $60 billion, the Rowley PNM Administration moved in its first budget to introduce the first of three fuel price increases. Super petrol moved to $3.11 per litre from $2.70; and Diesel moved from $1.50 to $1.72 per litre with immediate effect.

Imbert also alluded to an ‘increase’ in the allocation to Tobago, saying that $2.772 billion will go to Tobago, which represented 4.4 percent of the total budget, ‘significantly above minimum, and more in percentage terms than Tobago from the Peoples Partnership Government’.

Interestingly, the 2014 allocation to Tobago was $3.3 billion, or just over five percent of the national budget.

However, with very clear indicators that facts would become a problem for the Rowley Administration, theTTWhistleblower looked back at the allocations to Tobago by different administrations and found the facts:

$598 million (+$110m for capital programme) ($708 million)
$742.9 million (total)
$734 million (+$166m development programme) ($900 million)
$822.9 million (+$200.9m development programme) ($1,023.8 million)
$1.3 billion (total)
$1,324.4m (+$315.7m for development and $384.7m provided for under Heads of Expenditure to recurrent and capital expenditure in Tobago) ($2,024.8 million)
$2,238m (inc. $1,398million recurrent expenditure; $362m for development programme; and $478million under other Heads of Recurrent and Capital Expenditure in Tobago) ($4,476 million)
$2,650million (total)
$2,268.6 million
$51.5 billion
$2,568.8 million
$52.8 billion
$2,199 million (+$510m under various other Heads of Expenditure ($2,709 million)
$57.9 billion
$2,356m (+$874.9m under the various other Heads of Expenditure ($3,230.9 million)
$64.8 billion
$64.7 billion
$61.8 billion
$53.7 billion
$50.5 billion
$2,200 million
$758,829 billion
$36,699 billion (4.8%)

Note these budget figures are exact, not including costs that emerged out of corrupt projects as discussed in this and earlier parts of this series.

With over $36.5 billion allocated to Tobago since 2002, the Panday and Persad-Bissessar Administration allocated $16.2 billion to the sister island’s development programmes in annual budgets, or at six years of Administration, an average of $2.7 billion per year

After over 11 years of holding Government up to the present, the Manning and Rowley PNM allocated $22.7 billion to Tobago’s development agenda, or an average of $2.1 billion per year.

In almost half the time, UNC/People’s Partnership Governments allocated more to Tobago’s development than the Manning or Rowley Administrations did, or have so far. Imbert’s statement to Parliament in his first budget might therefore become a key indicator of his economy with the facts.

Imbert also stated: “The Central Bank will be asked for the foreign exchange distribution system to be re-established as it existed before 2014.” As one of the most failing policy measures, one only needs to look at the fact that US dollars are even harder to obtain now than before. And foreign exchange reserves have fallen drastically from the 2015 level.

Foreign Reserves in September 2015 when the Government changed stood at US$10.45 billion which held Trinidad and Tobago at 12 months of import cover. As at January 2018, FOREX reserves stood at US$8.28 billion or 9.5 months of import cover. These figures are from the Central Bank.

The Rowley Administration’s Finance Minister also went on to boldly commit to “Tamana Eteck park, and Piarco Aero Park being activated and embassies being strengthened to help with trade.”

He further said: “We must reverse decline in Agriculture Sector.”

The Finance Minister also said: “The stark reality. Oil production has been on decline. From 100,000 barrels a day in 2010 to 80,000 barrels a day in 2015. We will engage all stakeholders.”

What Imbert did not say was that from 2005 during the Manning Administration of which he was a dancing part, oil production slid from 145,000 barrels per day to below 100,000 in 2010. And it was the renegotiation of the fiscal regime and investment in energy that halted the natural and policy failure decline in oil production.

What Imbert also did not say was that during the Persad-Bissessar Administration, Agriculture’s contribution to GDP increased, and the food import bill took a downward turn for the first time in years.

Further, as of 2018, the investments in energy generated between 2010 and 2015 caused an increase in natural gas production, securing industry and increasing Government revenue. A report in the Trinidad Guardian on 22 February 2018 noted this reality, stating:

The energy sector continues its turn around with increased natural gas production and usage, slightly improved crude production and higher commodity prices according to latest data from the Ministry of Energy and Energy Industries…”

Beyond energy, Imbert said: “The manufacturing sector has stagnated, contributing less than 10 per cent of GDP. We will address this.”

Manufacturing is considered a critical component of the non-energy sector, so again one wonders why Imbert failed to put forward the fact that total nominal GDP in 2010 amounted to TT$141 Billion and the non-energy contribution to GDP stood at TT$84.7 Billion.

By 2014, GDP expanded 24% to TT$175 Billion and the non-energy contribution to GDP expanded by 29 percent toTT$109 billion.

On Value Added Tax (VAT), some might consider this move by Imbert to be one of the more questionable ones, by claiming to fulfil a promise to cut VAT from 15 percent to 12.5 percent, but without saying the zero-rated list of food items would be revisited and seriously restricted.

In that year, projected VAT revenue doubled from approximately $6 billion to approximately $12 billion.

Such a projected return could not have come from an intention to reduce the cost of food to families.

To be continued.

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