$800 billion later, where are we? – Part 5

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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 wastag

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.

Into 2016 and 2017

By the time Trinidad and Tobago moved into 2016, analysts and experts were weighing in on the direction that the economy had suddenly taken.

At first, some were sympathetic for the standing excuse of low energy prices, but later, more questions emerged on the actual economic plan that the Rowley Administration has to date failed to fully articulate.

On 17 October 2015, the Trinidad Guardian reported:Minimum wage earners and small business owners will be the biggest losers as a result of fiscal measures in the 2015-2016 budget presented by Finance Minister Colm Imbert. That’s the view of political leader of the Movement for Social Justice (MSJ) David Abdulah, who said he is concerned about higher transportation costs following the minister’s announcement of increases in prices for super premium and diesel fuel.”

By 25 January 2017, conditions became severe and it was the Oxford Business Group that summed those conditions up in just a few words:

Handed down by Colm Imbert, the minister of finance, the spending plan outlines amendments to value-added tax regimes, including a reduction in the number of zero-rated items; cuts in fuel subsidies; full implementation of a property tax; increased levies on alcohol and tobacco sales; stricter oversight and taxation of the gambling industry; and tariffs on online sales.”

New economic fundamentals took centre-stage also as within its first year, the Rowley PNM became the first Government with withdraw from the Heritage and Stabilisation Fund since its creation in 2001 and formal adoption by statute in 2007.

On 13 May 2016, the Rowley Administration drew US$375.05 million from the HSF, and on 16 March 2017, the Cabinet approved a further drawdown of US$251 million.

A total of US$626.05 million (…or just over TT$4.2 billion) has been used from the HSF by the Rowley Administration to ‘pay bills’.

These and other failures could have been the trigger for a Trinidad Express news item on 17 May 2017, headlined “Gloomy days ahead for T&T economy” which stated: “Less than 24 hours after Finance Minister Colm Imbert delivered his 2017 Mid-Year Budget Review in which Government borrowings and the public sector debt loomed large, Express columnist Sir Ronald Sanders wrote an article titled “Debt danger for a generation”. Its contents were based on a study of several Caribbean countries that have huge debts.”

Hardship in truth-economics too

The economic hardships faced by Trinidad and Tobago was not only in dollars and cents; the facts already articulated notwithstanding, there have been some very public statements that defy even the most generous allowances for hyperbole.

In a Trinidad Guardian interview with Rowley on 21 May 2017, the Prime Minister described the 2010 to 2015 period as one of stagnation, despite the facts already stated in Part 3 of this series.

With his Government heralding a period of serious economic decline, Rowley said his Administration has performed “reasonably well”, saying: “We came into office in September 2015, after a period of protracted economic stagnation, five years of record breaking levels of government expenditure followed by a collapse of the country’s revenue base due to the precipitous fall in oil and gas prices and production, “the perfect storm” of negative economic circumstances. Under the circumstances we have engaged the situation reasonably well, but there is always room for improvement.”

In spite of reality as already factually laid out, Rowley also defiantly went on to add of his leadership: “The country is not at a standstill. We have been reducing expenditure whilst protecting economic stability.”

This is despite the fact that the economy, under the Rowley Administration registered its worst decline in economic history.

The 2018 budget

By the time the $50.5 billion 2018 budget was delivered on 02 October 2017, the signs had become painfully clear in the daily newspaper headlines.

The Trinidad Express led the day’s news with “Taxes Fuh So”. A quick scan of the newspaper front-page showed:

  • Gas goes up – Super $3.58 to $3.97; Diesel $2.30 to $3.41;
  • Car inspection fee increases from $165 to $300;
  • 10 percent tax on lotto, play-whe winnings;
  • 35 percent tax on bank profits;
  • Tax on gambling machines;

Increased license fees for private hospitals.

The Newsday told the nation that Imbert lashes the rich and poor, emblazoning its front page with: “Burden for all”, carrying similar snippets of the 2018 budget.

And the Trinidad Guardian bemoaned: “Taxes for all”, noting that businesses were being hit with higher taxes.

The impact of the measures could be seen in the realities of what the Central Bank of Trinidad and Tobago has arrived at in its data.

Unemployment in 2015 stood at 3.4 percent, after registering its lowest level in history; unemployment stands at 4.1 percent as at the most recent data in 2017.

In crime, even those numbers have escalated; in 2015, the number of murders for the year stood at 410 or 1.1 murders per day, with September, the time of the election of the Rowley Administration, being acknowledged as one of the bloodiest months in history.

In 2017, the murder count jumped to 463, an average of 1.3 murders per day. And in 2018 with 53 days having passed as at the 24 February, there have been 87 murders; an average of 1.6 murders per day.

Foreign Direct Investment (FDI) has also played a major role in economic stability and expansion; at 2010 FDI stood at approximately US$500 million. During the Persad-Bissessar Administration, FDI approached US$2 billion for 2012, marking the highest level in history.

In the Newsday of 24 February 2018, Dr Rowley was quoted on foreign investments while speaking at a PNM Public Meeting: “Prime Minister Dr Keith Rowley challenged the Opposition to point out which of his eight official overseas trips he should not have gone on, as he pointed out the tangible benefits of the trips including $10 billion in foreign direct investment to TT’s energy sector based on his trip to Houston, Texas.”

The alleged figure for FDI under his Administration exchanges to approximately US$1.47 billion; and in 2016, the level of FDI recorded for Trinidad and Tobago as assessed by the Central Bank was –ve US$59 million.

So, unless he got his numbers wrong, 2017 would have marked the influx of almost US$1.5 billion in FDI, with nothing to show for it as we approach the third month of 2018. Central Bank figures, when updated, will provide the data required to determine the truth of this statement.

Budget irresponsibility

Key to understanding the current severity of the economic challenges faced by Trinidad and Tobago is the fact of poor planning and budgeting.

A great deal of debate was generated while Dr Rowley was Leader of the Opposition on the fact of annual budget deficit expansion, claiming the Persad-Bissessar Administration was managing fiscal planning poorly.

The numbers show something different, with each Persad-Bissessar budget coming in well below its project deficit through what was described by the then Government as fiscal discipline.

The Central Bank’s data show this for the Persad-Bissessar Administration budgets:

YEAR TOTAL REVENUE (projected rev) TOTAL EXPENDITURE (proj exp) DEFICIT

(proj def)

2010/2011

(Winston Dookeran)

$47.5 billion ($41.3B) $51.5 billion ($49B) $3.99B ($7.7B)
2011/2012

(Winston Dookeran)

$49.23 billion ($41.3B) $52.8 billion ($54.6B) $3.5B ($7.6B)
2012/2013

(Larry Howai)

$52.76 billion ($50.7B) $57.9 billion ($58.4B) $5.2B ($7.67B)
2013/2014

(Larry Howai)

$59.9 billion ($55.04B) $64.8 billion ($61.4B) $4.9B ($6.4B)
2014/2015

(Larry Howai)

($60.4B) ($64.7 billion) ($4.3B)

Conversely, the projected deficit for the Rowley Administration’s 2016 budget was $5.9 billion but the actual Imbert budget deficit was $12.1 billion.

For the 2017 budget, the projected deficit was estimated at $6 billion, with the actual deficit for the period coming to $7.4 billion.

For the 2018 budget, the projected deficit was estimated by Imbert to be $4.76 billion; only at the delivery of the 2019 budget would we know how much the current deficit was miscalculated.

Crime and violence

A curious coincidence emerged immediately as the Rowley Administration took office; that September in 2015 became one of the bloodiest months in history, leaving some with a sobering sense of foreboding.

By June 2016, a hand-grenade was reportedly found at a southern Primary School and a few days later, there was a bomb scare at the St Augustine campus of the University of the West Indies.

The number of murders for 2015 spiked to 410, up from 403 in 2014. By 2016, there were 463 murders, and for 2017 the figure jumped to 494. For two months of 2018, there were already 87 murders as at 24 February.

Worse is that Trinidad and Tobago now faces what appears to be more serious risks of terror attacks and local unrest.

Approaching Carnival 2018, reports indicated that a terror plot was uncovered to disrupt mas celebrations; a plot which saw US reports and other foreign territories upgrading their travel advisories against Trinidad and Tobago. The Prime Minister’s response to these advisories was “don’t worry about it”.

A total of 15 of suspects were apprehended in relation to the terror plot and were subsequently released, with some of the detainees being charged for arms and ammunition possession.

By 23 February 2018, the Trinidad Guardian reported on Dr Rowley’s claims of fears of a violent attack in Trinidad and Tobago: “Prime Minister Dr Keith Rowley is warning citizens of another possible coup d’etat against the Government similar to the July 1990 insurrection by the Jamaat-al-Muslimeen.”

This is a Prime Minister who, as Leader of the Opposition told the nation that: “If the Government can’t deal with crime, then the Government itself is part of the problem.”

Yet on a 102FM interview on 24 January 2018, Rowley, as Prime Minister, was very clear, saying: “I said to my wife that I have a job where I am held responsible for things that I have absolutely no involvement in or control over! Somebody last night made a decision to kill one or two people for profit…I say the job, it’s not me, the job, because, I mean there are things that you have that can challenge it, of course I can challenge it, but the bottom line is that crime is not an incidental thing in Trinidad and Tobago anymore.  It is not an organized thing and a way of life for some of our citizens…planned and executed.”

The only people who have the authority under law to respond and deal with those who have chosen to do that is the Police Service.”

What next?

Going into 2018, one of the few hopes is the increase in natural gas production, coming out of negotiations and investments achieved by the People’s Partnership Persad-Bissessar Administration.

With natural gas carrying the larger share of the energy revenue ratio, increased production means increased availability to industry, the LNG export trade, and indeed new industrial investments.

However, outside of natural gas, and oil production’s decline which has also been arrested for similar reasons, the non-energy sector continues to decline, unemployment continues to increase, food prices appear aimed upwards, Government policy remains uncoordinated and unfocused and the economy continues to struggle through challenges in spite of increasing global energy prices.

Perhaps when citizens now listen to this ongoing debate on the nation’s current economic circumstances, and the blame game continues, these analyses give you the facts so that you can understand whether you are hearing the truth, or dressed up versions of it.

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