‘Unemployment, economy worse than Govt claims’

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Unemployment, gross domestic product (GDP) and other numbers seem understated in the Central Bank of Trinidad and Tobago’s Economic Bulletin March 2017, a trade unionist, a financial analyst, an Opposition parliamentarian and former University of the West Indies (UWI) principal said in telephone interviews and e-mails Saturday, the Trinidad Express reported on Monday.

“The unemployment number is incorrect because many have lost jobs but new jobs haven’t been created,” said Steel Workers Union public relations officer Timothy Bailey on Saturday evening. “Not only that, some employers are manipulating the system. The only legal requirement (they) have to report to the Labour Ministry that they are terminating workers is for retrenchment and severance benefits when it’s five or more workers, so there are some consultants out there advising employers how to manipulate the system and not have to report it. That is a fact!” he said.

The unemployment figure of 4.4 per cent is understated, he said. “There has been no creation of new jobs that would offset the loss of jobs and it comes back down to what I have been saying about our situation where we have an investor (for the former ArcelorMittal steel plant), and the investor would have come to Trinidad and Tobago to meet the Government, but the Government would not even meet them, and the question we’re asking is why? Why would they not meet them? Do they have another plan?”

Discrepancy in the numbers.

Opposition Member of Parliament Dr Bhoe Tewarie had three issues with the Economic Bulletin. “I did not see any report in the document on the fourth quarter GDP. I saw numbers for the third quarter. All the way in the back of the document, I saw a figure of minus 10 per cent of GDP growth for the third quarter, but when I look at the GDP for the entire year, it says 2.3 per cent, that is to say, the year 2016, so I find that rather puzzling. I couldn’t quite understand that. I am not saying that the number is wrong but it seems to me that there is a discrepancy between the numbers for quarter one, quarter two, quarter three of 2016, and the numbers that they have for GDP for 2016 as a whole.”

Second, he said: “I noticed the debt figure for the country at the end of 2016 is quite high, and again, I want to look at that carefully so that I can make sense of it, and also to look at the debt-to-GDP ratio and see what kind of jump we have made over the last 18 months.”

Third, he said: “I think unemployment is higher than 4.4 per cent but they probably used the Central Statistical Office (CSO) figures which generally lag behind by two quarters, so the figure that you are seeing is not for March 2017 but really for September 2016. So if you did an estimate of what it’s likely to be now, in March 2017, given the significant layoffs, losses of jobs and closure of businesses, with very few new hirings, except by the State, and very few, if any (new investments), I think the unemployment should be higher now but over the course of tomorrow, and Monday I will look at the figures more carefully and will give a more considered response in a day or two.”

Financial consultant Ved Seereeram said: “I would question the low unemployment rate of around 4 per cent. Do remember that a report on poverty was published showing over 300,000 persons earning less than $1,000 per month.”

Deferred Tax Assets will save us.

Seereeram said: “Also striking was the rates Government is now paying on bonds, over 4 per cent compared to 2 per cent a short while ago. This will have significant impact on fixed income portfolios as the value of the portfolio will decline significantly while interest rates rise. Banks such as First Citizens, which has a large fixed income portfolio, would suffer significant losses, unless they do like Petrotrin and show the losses as a Deferred Tax Asset.”

He added: “There was no comment on the success or failure of Government’s diversification plan. I thought this was important given our plight.”

Seereeram said: “The management of the foreign exchange is another major issue of great concern. I do not recall any emphasis on the projections for the stock of foreign exchange. There was no comment on the exchange rate and one would expect a comment if the regulators and Government are committed to a stable exchange rate for the foreseeable future.”

Promising to make their statements in the weeks ahead, at least two other experts contacted by the Express, said they suspect political interference as the numbers in the Economic Bulletin’s Appendix Tables as at March 9, 2017, are inconsistent with the numbers in the substantive document. Finance Minister Colm Imbert did not respond to questions on the topic sent by mobile text message. However, a returned phone call from his cell number ended abruptly after the first hello.

Image result for bhoe tewarie
BHOE TEWARIE 

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