Leader of the Opposition, Kamla Persad-Bissessar, has criticized Sunday night’s nationwide address of Prime Minister, Dr Keith Rowley.
Persad-Bissessar said Rowley gave the country no hope going forward, neither did he account for the billions spent in the last 28 months.
The following is her statement released on Monday:
“Having reviewed the Prime Minister’s Address to the Nation on Sunday 8th January 2018, I was disappointed and disheartened.
Citizens who listened with keen interest to learn of the Government’s plans to return our economy to a growth trajectory and make our nation a safe place, were left dissatisfied and with little hope for brighter days ahead.
Our Current Economic Reality
· Net official reserves are haemorrhaging, falling sharply from a peak of US$11.5 billion in December 2014 to US$8.3 billion by November 2017, the lowest level in a decade. Many small and medium businessmen continue to vociferously complain about how much foreign exchange they get and when they get it. Sales of US dollars by the banking system remain concentrated among bigger business entities, the 1% supra-elite. This situation is prompting feverish speculation that a devaluation of the TT dollar is imminent.
· Fiscal deficits have been large in the two years of this PNM Government, averaging nearly 7% of GDP, and their intention is to continue running sizeable fiscal deficits during the remaining three years of their term.
· These large fiscal deficits have been financed mainly through heavy public borrowing. Public debt has rapidly increased to uncomfortably high levels and risks pushing our country into the middle-income debt trap, once again. The IMF in its latest 2017 Article IV Consultation Report projects that public debt in Trinidad and Tobago could mushroom to an unsustainable 85% of GDP within the next few years.
· We have already experienced one casualty of high and rising debt. Last April, Standard and Poor’s downgraded Trinidad and Tobago’s investment-grade sovereign credit rating, warning that further downgrades are possible unless the government stabilizes the public debt burden. By April 2018, S&P is likely to downgrade our credit ratings to speculative grade or junk status. This label of junk status will negatively affect how foreign investors view the quality of our economic management.
· In 2016, we experienced the sharpest economic contraction in more than three decades; real GDP shrunk by an estimated 6%.
Economic growth is expected to be marginal in 2017 and to remain weak over the next few years.
Instead of addressing these matters, the Prime Minister chose to spend his time rehashing “achievements” of his Government, and re-stated several proposed projects which were previously announced in Budget statements and on the political platform.
It is clear that this was simply another public relations exercise in an attempt to deflect from his administration’s failures.
Dr. Rowley failed to provide details of the specific measures that will be taken to arrest the economic decline, generate revenue and diversify the economy.
Since this Rowley-led Government took office, their main economic initiative has been to increase taxes.
Under this Government we’ve seen a dramatic decline in the quality of life of citizens, with escalating crime, high unemployment, increased cost of living, and an ailing health care and education system.
In the critical area of management of the economy, the Government has failed, and once again, the Prime Minister missed an opportunity to put forward any new ideas to fix the economic problems facing us.
Rowley also failed to account to the people of Trinidad and Tobago on the billions of dollars of Government expenditure in the last 28 months, as there has been limited development and our citizens continue to suffer.
The Government failed to deliver on any of its promises, and has found itself embroiled in several self-inflicted controversies, including millions of dollars lost in “fake oil”, allegations of ministerial misconduct including ministerial involvement in the procurement of a ship – and last night we learned of the imminent arrival of another ship, and no word on the procurement process for this vessel.
They even made a crude attempt to censor our constitutionally entrenched right to freedom of expression.
Ahead of the Prime Minister’s address yesterday, I noted that hisadministration has already wasted two years hopelessly trying to stabilize the economy, and, given their track record, they will likely waste a third year in 2018 unless they change course.
Their economic policymaking is characterized by impotence, incompetence and insensitivity. Their policies have resulted in the collapse of small and medium-sized enterprises (SMEs) as only large conglomerates with access to stored capital and borrowings can survive in the current economic environment.
This excessive taxation, continue to take a toll on the people of this country, and have led to the decimation of all gains made between 2010-2015 under the People’s Partnership Government, when record revenues, record GDP growth and record job creation were achieved through prudent management.
I noted as well that if the Government does not change its course and adopt sustainable strategies for growth, Trinidad and Tobago will face further downgrades, further devaluation of the TT dollar, a massive increase in unemployment, capital flight and hoarding, and tightening of lending by financial institutions.
These factors, together with new taxes since fourth quarter 2015, the unavailability of foreign exchange, the failure of the Government to pay debts and rising crime have the potential to create a perfect storm in 2018.
But all is not lost… there is hope. Our economy can be fixed. We can regain fiscal balance, stabilize public debt, stop the bleeding of official reserves, and bring our economy back onto a path of growth.
But it will take a Government with the will, the knowledge and the vision to make it happen.
In our view, the first critical step is to restore confidence and rebuild trust. This means the Government must come up with a credible medium-term economic plan, communicate the milestones of that plan, and act decisively in implementing the plan. We did not hear of any road map in the Prime Minister’s address.
It also means the Government must stop imposing this heavy tax burden on citizens. This is not generating revenue on the scale needed to drive growth in our economy. Instead, it is having the opposite effect – increasing the cost of doing business in the country.
We urge the Government to rescind the increases in taxes on businesses as these, together with the foreign exchange constraints and increased costs, will decimate the SME sector.
The Government must also cease and desist from trying to secretly depreciate the TT dollar. Small island economies like Trinidad and Tobago require exchange rate stability, not exchange rate uncertainty.
It is a terribly misguided notion to believe that depreciating the TT dollar will somehow deliver more US dollars to everyone.
The Government must re-organize its priorities and place greater emphasis on developing our country’s human capital. We call on them to rescind the cuts to the education sector, re-invest in tertiary education and in retraining the existing workforce to upgrade to the digital age, or T&T will be left behind.
A specific suggestion for the South UWI Campus is that it should be completed and turned into an integrated facility for the introduction of certificate, diploma, undergraduate and postgraduate degrees including those for the protective services and judicial offices. The courses should include law, forensic accounting, forensic sciences, policing, criminology, policing vulnerable societies, criminal justice policy, cyber- crime and criminology research.
Existing trade agreements should be implemented and improved, and new trade agreements pursued with South and Central American countries, as well as West African countries.
Measures should be initiated to strengthen and protect local manufacturers from unfair trade practices and illegal competition by, for example, clamping down on illegal/untaxed goods entering our ports.
Increase funding and manpower of TTBS (Bureau of Standards) to examine, test and prevent importation of substandard and potentially dangerous goods into TT. There is currently a flood of poor quality/substandard products in our markets underselling higher quality local products.
Full pursuit of the digital economy to usher in the fourth industrial revolution.
The above represents just some of many other suggestions to help disperse the storm clouds and improve our nation’s economy as well as the quality of life of our citizens.
The UNC has a vision of a stronger, more prosperous Trinidad and Tobago, and we have prepared a plan to move Trinidad and Tobago forward. A plan to return our country to growth, make our homes and streets safer, improve access to health care and education and create more jobs by rebuilding our economy with a drive powered by the innovation and creativity of the people of Trinidad and Tobago.
The Opposition calls on the Prime Minister to rethink his Government’s plans, re-order his priorities and adopt sustainable strategies for growth, in order to improve our nation’s economy as well as the quality of life of our citizens.
KAMLA PERSAD-BISSESSAR AND DR KEITH ROWLEY