In Imbert’s ‘good times’ T&T, what to expect for the 2019 Budget – Part 2

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The TTWhistleblower continues this series looking at the prospects for the 2019 budget due in September 2018.

Following Finance Minister Colm Imbert’s wild claims of economic turnaround during the mid-year review of the 2018 budget, many were left confused as to where his information came from, and what analysis was applied to interpreting the true state of the Trinidad and Tobago economy.

To prepare ourselves, the TTWhistleblower will bring the facts, the current figures, the projections and the comments of experts both at home and abroad.

STICKING TO HIS STORY

Finance Minister Colm Imbert told the media that it is not that the Trinidad and Tobago economy is ‘turning around’, but rather, it ‘has turned around’.

Clearly intent on sticking to his fairytale, he maintains that the energy sector as well as the non-energy sector have grown.

On energy, he said: “With average gas production at significantly higher levels, up 20% from the 2016 levels, we have revitalized the energy sector. This boost in production is due to the hard work of a dedicated team led by the Honorable Prime Minister and including the Minister in the Office of the Attorney General and Office of the Prime Minister and the Minister of Energy and Energy Industries.”

From all indications, Imbert intends to stick to this fairytale as well, despite widespread, public information on the fact that the energy sector ‘revival’ came as a result of energy deals in both oil and gas made between 2012 and 2014,

This was primarily with the agreements made with BP in 2014 to get the Juniper field operational and to provide the incentives which have added two trillion cubic feet of gas to proven reserves from the Macadamia and Savannah fields.

NO LONGER NON-ENERGY

 

Imbert said his alleged “turnaround is being driven by economic expansion in both the energy and non-energy sectors.”

Supported primarily by higher global energy prices, Imbert has referred to this as ‘economic growth’.

Non-energy refers to the sectors outside of the energy sector some of which include Manufacturing, Financial Services, Transport, Construction, Distribution and Transport, all of which rely on increased trade relations with other economies.

Or, at least this was the case before.

In the 2017 Review of the Economy presented when the 2018 budget was delivered, it was stated: “A contraction of 3.2 percent is anticipated in the Manufacturing industry during 2017, a small improvement on its 5.5 percent contraction one year earlier.”

“This industrial grouping now also contains activities related to the liquefaction of natural gas and the refining of petroleum products (such as gasoline, kerosene, fuel oil and natural gas liquids), as well as the manufacture of petrochemicals (methanol, ammonia, urea etc.). These sub-industries have become the primary drivers of the industry’s overall performance.”

When political deception becomes institutional manipulation, it becomes a danger to the entire economy, population and the future.

Imbert, through the Central Statistical Office, has effectively broken up the energy sector by taking the petro-chemical sub-sector and moving it to the non-energy sector, perhaps intending for growth in the petrochemical sector to falsely reflect non-energy growth.

Could this mean that this country no longer has a non-energy sector?

More than that, is this how Imbert constructed his deception of alleged growth in what was formerly the non-energy sector?

OIL AND GAS

Digging deeper into the data, comparisons of the period when the PNM took office and the recent months show a disturbing contradiction, despite Imbert’s wild claims of a turnaround.

Quick to praise the PNM for the free ride it has gotten with the energy sector since being elected, the figures actually show that PNM Energy Policy has been failing and would have continued to fail, had previously negotiated deals not kicked in…

In crude and condensate production, in September 2015 production stood at 80,601 barrels per day, but by June 2017 production stood at 72,775 barrels per day.

In natural Gas production, in September 2015 production was 3,892.8 mmcf per day, but by June 2017 production stood at 3,277.7 mmcf per day.

In exploration for crude oil, in September 2015 a total of 134.0 feet were drilled in the search for new oil. By June 2017 that figure fell to 87.8 feet drilled.

In terms of the number of wells drilled, in September 2015, a total of 94 wells were drilled, but by May 2017, a total of 59 wells were drilled.

More than these figures is the fact that the highest increase in unemployment has occurred in the energy sector in the same period being compared.

TRADE/INDUSTRY

 

As stated before, the Rowley Administration has studiously avoided detailed discussion on the current trade agreements in place between Trinidad and Tobago and other nations which include:

•          Trinidad and Tobago-Panama Partial Scope Trade Agreement;

•          Trinidad and Tobago – Guatemala Partial Scope Trade Agreement;

•          World Trade Organisation (WTO) – Agreement on Trade Facilitation;

•          Trinidad and Tobago – El Salvador Partial Scope Trade Agreement;

•          The Cariforum/EC Economic Partnership Agreement;

Capitalising on these agreements could expand the level of exports from this country and increase the number of markets local manufacturers and service companies can access.

Trade expansion can mean increased foreign exchange earnings as well as stronger defence and expansion of foreign exchange reserves.

In the 2017 Review of the Economy from the Ministry of Finance, a few passing references were made to some trade agreements.

On the Trinidad and Tobago/El Salvador Partial Scope Trade Agreement, it was started that: “El Salvador provides access for 150 products from Trinidad and Tobago, including fish, cassava, watermelons, curry, cocoa powder, condiments (ketchup, mustard, pepper sauce) lubricating oils, greases and plastic products among others. Trinidad and Tobago is also committed to provide preferential access for 177 products from El Salvador including clothing, cereals and cosmetics into Trinidad and Tobago.

The document stated that the Government “is currently seeking the required approvals to implement the agreement. Consequently, the text of the agreement must be initialled (by both parties) and submitted to the Secretary General, CARICOM Secretariatbefore the end of Fiscal 2016/2017.”

This was an agreement made in 2015, and by 2018 the new Government has not yet even settled on “required approvals”.

On the Trinidad and Tobago/Guatemala Partial Scope Trade Agreement, the 2017 Review of the Economy stated: “The Trinidad and Tobago/Guatemala Partial Scope Trade Agreement was signed on February 6, 2015. The Agreement provides access for 135 products into Guatemala from Trinidad and Tobago and 144 products into Trinidad and Tobago from Guatemala. Local manufacturers and exporters are expected to benefit as this will allow the sale of products such as agro-processed goods, at duty free rates to the Guatemalan market.”

Nothing was said on how the agreement has progressed, the level of contact, the level of earnings projected and the benefit to local industry.

And while we wait for Imbert to figure out a way to manipulate trade and industry, we also keep a sharp eye on the fact that the agriculture sector has declined by 18% since 2015.

The construction sector has declined by 10% since 2015.

And despite Imbert’s underhanded attempt to change the composition of the energy and non-energy sectors, the manufacturing sector has declined by 8%.

An interesting fact that readers must keep in mind is that when the Rowley Administration makes blasé references to percentage points in unemployment increases, one percent unemployment effectively means that at least 6000 people in this country are unemployed.

By December 2015, unemployment stood at 3.5%, but by June 2017, the unemployment rate rose to 5.3%, meaning that the Rowley Administration pushed almost 12,000 people out of jobs, affecting more than twice that amount in terms of actual families.

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