Letter to the editor…
The Keith Rowley PNM might have believed that they were going to the Parliament on Friday 8th April 2016 to continue what has become a habit of skilful deception. But despite their best efforts, both Rowley and Colm Imbert unwittingly admitted that they haven’t a clue of where our economy is or where it is going. And wherever facts are inconvenient, they will distort everything they say to the public.
And the unwitting admission was convincingly delivered with Rowley’s and Imbert’s characteristic indignant ignorance.
Imbert droned on about technical economic issues that are clearly out of his league, and what we saw in the Parliament was the full return of the real PNM, seething with arrogance, and populated by imbeciles lacking the sophistication to even pretend to know what they are doing.
It is almost as if they tried to make the public feel guilty about the anger over having to pay a severe price for the PNM’s incompetence and mismanagement.
The only thing we are now sure of is that an economy that was ably navigating challenges six months ago is now in a precipitous decline, and the ones who are now managing it are both the cause and effect of a coming period of extreme economic chaos, poverty and hardship.
The nation has been repeatedly lied to, burdened with harsh measures that were unnecessary, and is now being told that, as the late great Lloyd Best said, to “grin and bear it”.
The mid-year review debate looked like a bad adaptation of ‘Malice in Blunderland’, punctuated at every paragraph with pathological deception and backed up by a Government bench of MPs brainlessly pounding approval of things they are blissfully ignorant on.
More than just lying, the PNM has taken a reasonably robust economy, and driven panic deep into the core by crying wolf at every opportunity and claiming that everything was “worse than they first thought”.
And you can almost hear the leery voice of Cheshire Imbert, grinning as he stares the nation in the face saying ‘I’ve no idea where we’re going, so any road’ll take us there’.
By the end of the mid-year review debate, the PNM’s message to the nation was loud and clear: ‘You should be honoured to now be ketching your arse’.
But it is one thing to say that the PNM is now lying every time its members speak, and a complete other thing to actually be able to easily identify how they are taking black and white facts and distorting them to fit their incompetence.
Rowley’s pathological PNM
So what are those lies?
Responding to questions during the monthly Prime Minister’s Question Time, Keith Rowley said categorically that Trinidad and Tobago has received no money from the European Union for payments to cane-farmers of the now defunct sugar cane industry.
But six months after the EBC conceded to the PNM’s plea to extend voting in the 2015 general election, it is troubling that Rowley was not aware that a Cabinet decision of January 2015 approved $130 million, sourced from the EU, to pay cane-farmers in tranches. The EU Grant Resources Unit disbursed funds to Trinidad and Tobago to be used as tranche payments of $27 million, $75 million and $28 million.
What is worrying is that Rowley was able to instantly find an allocation for what he said “was a prudent decision to purchase a $900,000 luxury vehicle”, but $130 Million of the EU’s money can’t be located to pay waiting farmers.
As the PMQT session continued, Keith Rowley also responded to questions on the nation’s Foreign Exchange Reserves, saying that there has been no change or deterioration in the reserve account.
Rowley said: “As at today’s date, the Foreign Exchange available to the Central Bank is US$9.6 billion or 11 months cover for Trinidad and Tobago’s imports….There has been no significant change in the reserves.”
That was not enough, and Rowley further asserted: “I have just said in the context of earning and spending foreign exchange, the reserves have REMAINED THE SAME, and that indicates that whatever comes in has been balanced by whatever has gone out.”
Bringing up the rear was Colm Imbert, quite like that odd friend we all have who doesn’t know the difference between being funny and being irritating.
‘Honest Colm’ was corroborating what Rowley said to the House: “Foreign exchange didn’t shift even by an inch.”
Making further references to the issue of Foreign Exchange Reserves, Imbert also said in his Mid-Year Review statement: “Over the last 6-12 months, our net foreign reserves have remained stable.”
So this is the PNM’s rehearsed position; now let’s look at the truth.
Despite the Rowley PNM’s clandestine and improper method of unseating a qualified Central Bank Governor in Jwala Rambarran, and replacing him with an unknown PNM party-hack, the Bank’s data has remained irrefutable, and shows substantial erosion.
By August 2015, days before the PNM took office, net Foreign Exchange Reserves stood at approximately US$10.4 Billion, representing approximately 11.9 months of import cover. By November 2015, just over two months of the PNM taking office, net Foreign Exchange Reserves tumbled to US$9.6 Billion.
So the truth is that in just six months, net Foreign Exchange Reserves have eroded by 11 percent, almost a month of import cover lost.
Rowley and Imbert not only mislead the Parliament on the amount of reserves available, but also on the cover it provides.
Further, between September 2015 and the present purchases of foreign currency from the Central Bank by authorized FOREX dealers amounted to US$1.3 billion, which means that the present status of the Foreign Reserves Account for April 2016 could be far worse than US$9.3 billion, and far less than 11 months of import cover.
But the foreign exchange issues don’t stop there. Imbert had this to say in his Mid-Year Review: “While the general perception is that there is a dire shortage of foreign exchange, the reality is that more and more foreign exchange has been made available over the last 5 years.”
If at this point we’re willing to accept high risks, and believe anything Imbert says, why did ANSA McAL have to source a US$20 million loan from a foreign bank to meet its foreign exchange needs in 2015?
This establishes that the PNM has not only lied, but has made a concerted effort to deceive the Parliament and population, even as it calls on citizens to make sacrifices.
Imbert also deceived the nation on the TT dollar exchange rate when he said: “Over the last 6 months, our exchange rate has moved 3.7%, from $6.37 TT dollars to $1 US dollar to $6.61 TT dollars to $1 US dollar.”
Imbert further asserted, in his best pretend ‘honest Joe’ voice that: “Appropriate measures will therefore be taken to ensure that our exchange rate does not move by more than a further 3.3% from today’s rate.”
Compare Imbert’s claim with the truth; at the Unit Trust Corporation, which is a wholly Stae owned financial organisation, the US dollar is being sold to the public at upwards TT$6.85, which means that the value of the TT dollar against the US dollar has eroded by 7.5%, double the figure that Imbert used to mislead the Parliament.
The first point is that the Opposition has made clear on numerous occasions that the account was properly planned for, with $13 billion in revenue inflows expected over a 7-week period from 7th September 2015.
Distortion of IMF, Moody’s and S&P advice
But hold that thought for a moment, because there’s still more.
Rowley and Imbert have not only twisted and distorted the truth of the economy on the local front. The PNM Government has gone as far as to actually distort and misrepresent the assessments and advice of global agencies such as the International Monetary Fund (IMF), Moody’s and Standard and Poors.
In delivering the 2016 budget, Imbert claimed that the IMF assisted him with the 2016 budget ‘informally’, but avoided further details. He also claimed that Moody’s and Standard and Poors supported the view of the PNM that the previous Government mismanaged the economy.
By 08 December 2015, arrogance got the better of him and in response to a question from the Opposition in the Senate, Imbert said of the IMF: “The informal IMF team simply confirmed what we had suspected all the time—that the last administration mismanaged the economy.”
Imbert used the names of the IMF, Moody’s and S&P to support his fabricated claims of crisis and instability, and further claims that: “For the five years prior to 2010, there were current account surpluses.”
But when the IMF did its 2010 Article IV Consultation, it advised that the new Government had to contend with ‘deteriorating fiscal accounts’ ‘weak economic activity’ and ‘low confidence’
So in his first months, Imbert conspired to mislead the nation into believing that the IMF, Moody’s and S&P agreed with the PNM’s claims of mismanagement by the previous Government.
And he was hotly supported by the over-eager and vacuous Faris Al-Rawi, who categorically claimed during the debate on the SSA Bill that the previous Government prevented the IMF from conducting annual assessment visit in 2015.
The view looks different when official positions from all of these organisations are considered.
Despite Al-Rawi’s hectoring claims, which one must wonder if he made deliberately to mislead the House and the population, the IMF in fact visited Trinidad and Tobago in January 2015 to conduct its Article IV Consultations.
And contrary to Imbert’s claim that the IMF was of the view the previous Government mismanaged, this is what the IMF had to say after its January 2015 visit: “We support the Government’s prudent decision to prepare revised budget plans based on conservative price assumptions.”
The IMF also said: “There has also been further progress on financial reforms, while improvements in easing the costs of doing business have indeed been impressive. Procurement legislation has also been passed and, once implemented, should help to improve expenditure efficiency and allay concerns regarding corruption.”
Apart from the fact that Imbert calculatedly distorted what the IMF advised, it should be noted here that while the PNM led this country from a rank of 32 in the Corruption Perception Index in 2001, to a rank of 85, this country’s rank improved for the first time in over a decade by 13 points in 2015 under the Persad-Bissessar Administration (more details later).
What’s more is that after Rowley and Imbert spent months making claims of an empty Treasury, weak economy and looming crisis, the IMF issued another statement on 17th March 2016 saying, inter alia: “…Trinidad and Tobago still has enormous strengths…with substantial financial buffers and low, albeit rising levels of public debt, Trinidad and Tobago is not in a crisis.”
The IMF also noted that energy projects negotiated and confirmed by the Persad-Bissessar Administration, as part of its revival of the energy sector that was left for dead by the PNM, “will modestly boost energy production.”
And the IMF was clear that economic recovery hinged on “confidence in the country’s ability to navigate the harsher global environment.” This means that the ability of the economy to overcome challenges is NOT about the previous Government, but rather about whether the PNM Government can restore the confidence it spent six months demolishing.
It wasn’t enough for Imbert to seriously distort the assessment advice of the IMF; he did the same with Moody’s and S&P.
This is what Moody’s said on 04 March 2016: “Moody’s would downgrade Trinidad and Tobago’s Baa2 rating if its rating review were to conclude that the Government’s plans are unlikely to be adequate to sustain Trinidad and Tobago’s economic or government balance sheet strength.”
It couldn’t be clearer – if this country’s Baa2 rating is downgraded, it would be because of the PNM Government’s failure to sustain the economic and balance sheet strength that the Persad-Bissessar Government left in 2015.
Last December, this is what S&P said in its statement: “We are affirming our ‘A’ long-term foreign and local currency sovereign credit ratings on Trinidad and Tobago. We are revising the outlook on the long-term ratings to negative to reflect an at least one-in-three chance that prolonged low energy prices could result in potentially low GDP growth prospects and a steadily rising debt burden, causing a downgrade in the next two years.”
S&P makes clear here that the current status of the economy that was managed by the Persad-Bissessar Administration entitled it to an ‘A’ rating, citing “typically large trade and current account surpluses”, “an increase in exploration activities in the oil and gas sector in recent years”.
The revision of the outlook to negative came because of doubts over GDP prospects and steadily rising debt burden, perhaps because of the PNM’s recent move to increase borrowing limits by TT$50 Billion.
Gross Domestic Product
Among the many lies in the 2016 budget, confidently presented as fact by Imbert, are claims that GDP declined under the Persad-Bissessar Administration.
Imbert referred to: “An explosion in Government borrowing combined with the decline in nominal GDP, the net public sector debt to GDP has surged to 46.3 per cent of GDP in September 2015.”
For the benefit of readers, GDP refers to the total dollar value of all goods and services produced over a specific time period. And nominal GDP is the measure that does not include the impact of inflation on GDP figures.
So we have Imbert’s claims of a decline in nominal GDP, now let’s examine the truth.
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 to TT$109 billion.
Note very carefully that non-energy expansion exceeded energy expansion.
The onset of global energy prices in 2015 falling by more than 50% created some impact on the local economy and GDP fell 5.7% to TT$165 Billion. However, because of foundational work and institutional measures in line with a vision for diversification, the non-energy sector still expanded further to almost TT$112 Billion.
The critical point here is that between 2010 and 2014, the contribution of the non-energy sector to GDP was vastly expanded, and this expansion was so strong that even global energy price declines could not hamper its continued growth.
This is a significant part of the reason challenges in low energy prices have NOT created the crisis alleged by the PNM.
This is why the global agencies such as the IMF, Moody’s and S&P could have referred to ‘typically large trade balances’ and ‘substantial financial buffers’.
And this is where yet another lie by both Rowley and Imbert is exposed; they created a budget based on false claims they made on the state of the economy, so again, the question is left – were harsh measures necessary?
When it was announced that Trinidad and Tobago’s rank in the corruption perception index improved by 13 points to 72 in 2015, the PNM’s Camille Robinson-Regis told reporters: “The improved perception may also have to do with election of the new Government which has a totally different policy from the previous administration.”
What makes this so disgraceful is the fact that, of all people, Robinson-Regis was the one making this comment.
Robinson-Regis attracted the attention of the Integrity Commission for a large cash deposit to her personal account recently. And this isn’t her first encounter with integrity issues; she previously repeatedly abused a Government Credit Card facility to buy herself jewellery, household lighting fixtures, hair extensions and fertility treatment.
More than that, the Corruption Perception Index considers metrics and institutional measures from two previous years. This means that in the time it took for the Persad-Bissessar Administration to advance anti-corruption measures, the nation’s rank improved. And some of those measures are:
- Restoring full Trinidad & Tobago compliance with the Extractive Industries Transparency Initiative (EITI), which the previous PNM withdrew from;
- Amendments to the Proceeds of Crime Act;
- Substantial progress with procurement legislation, which the PNM refused to support;
- Expanded Parliamentary Accountability, increased budget scrutiny and Prime Minister’s question time;
- Strengthened operations of the Financial Intelligence Unit to clamp down on white-collar crime;
- Expanded e-services and online access to Ministry functions, operations and work in progress, and
- Strengthened legislation and codes for the governance of the Financial Services sector.
Pre-2010 PNM debts and liabilities
This section was saved for last as it represents the continuous thread that former Prime Minister Kamla Persad-Bissessar had to contend with she restored economic growth, stability and confidence.
Fairly credible claims have repeatedly been made that the PNM spent in excess $400 billion in its 2002 to 2010 Government. Assuming that the figure is correct, or at least a good approximation, what we need to consider is the extent of debts and liabilities they left for the new Government in 2010 to unravel of fix.
The Central Bank of Trinidad and Tobago in its Economic Bulletin publication of July 2013 Volume XV No. 2 did an interesting study on the state of the nation’s finances as they related to the debt to GDP ratio.
What the publication found about the public debt post-2010 was that: “Higher Government spending DID NOT have a significant impact on the public debt.”
The Economic Bulletin stated categorically that: “The increase in the debt to GDP ratio was largely due to the Government’s bailout of CL Financial”.
This is where accusations against the PNM originated, that it botched the CLICO bailout. The PNM valued the CLICO bailout at TT$11.9 Billion, but the figure was found to be an extremely costly error and failure on the part of the PNM.
The actual cost of the CLICO bailout was in fact double the PNM’s calculations, rising to $20 Billion when all local liabilities were included, and moving further to $26 Billion when support to other Caribbean nations was included.
The increased debt to GDP ratio that Imbert has hissed and cried about in and out of the Parliament was actually primarily because of his party’s failure to competently manage the CLICO bailout, and this is a factual finding of the Central Bank.
Basically, the major portion of this economy’s debt obligations is because of the same “incompetence, corruption and mismanagement” that the PNM is now again destabilising the economy with.
Further, the PNM that botched the bailout and failed to understand the enormity of the CLICO collapse is the same PNM that now wants to preside over a ‘fire-sale’ of CLICO assets.
It should be noted that the CLICO assets are at present legally encumbered because of dodgy attempts by the PNM in the pre-2010 Government to transfer some of those assets to the State.
Given the PNM’s history of offloading valuable State assets to friends at rock-bottom costs (faint images of John Rahael and Andre Monteil come to mind) citizens need to be extremely worried about the PNM’s hands being on anything associated with CLICO.
In fact, citizens need to be very worried about everything the PNM has touched. The other debts and liabilities left by Rowley’s PNM in 2010 include:
- Approximately $4 billion in outstanding wage agreement settlements that were stalled and stifled by the PNM;
- Almost $4 billion in VAT refunds owed to businesses;
- A budget deficit already in place of TT$6.8 billion;
- Debts amounting to TT$7 billion to contractors on projects that were already over-budget, delayed and incomplete. All the money spent, but projects incomplete and contractors weren’t paid;
- Debts totalling TT$4 billion at WASA, at a time when only 17 percent of this country received a reliable water supply;
- Corruption, losses and failed investments amounting to a $15 billion ball and chain around the ankles of Petrotrin;
- And, counting only 10 of their mega-projects, combined cost overruns of over TT$4 billion.
What this amounts to is a total of TT$71 Billion in debts and liabilities (outside of high recurrent expenditure) created and left by the same PNM that has its fingers on the Treasury today.
And if anyone chooses to ask what this has to do with today’s challenges, they only need look at the variations that Imbert tried to quickly pass through Parliament before anyone had a chance to really examine the figures.
One of the variations includes $16 million that Imbert’s Ministry mistakenly entered twice, and this amount was an allocation for repayment of outstanding loans for the Tarouba Stadium – a facility whose budget was increased five times, from under TT$200 Million to over TT$1.2 Billion, but never completed.
And this is just one of numerous example of how today’s taxpayer is still paying off TT$71 Billion in chaos caused by the PNM’s rank incompetence and corruption, even while we are being asked to pay more for their incompetence today.
If only the EBC provided refunds…hundreds of thousands of people would be lining up saying: “Having thought about it, LET’S NOT DO THIS.”
Read the original article.