Will 2019 herald ‘good time’ budgeting? – Part III

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The TTWhistleblower has undertaken a review of the Keith Rowley PNM Administration’s past three budgets as the Finance Minister prepares to deliver his fourth budget since taking office in September 2015.

The dismal record of delivery and keeping promises does not bode well, but with a general election due in 2020, it leaves one to wonder whether the cash squeeze in previous years was a deliberate attempt to ensure that there can be a ‘free for all’ – a normal PNM strategy.

The statistics and facts delve deep, but it is for readers’ benefit to ensure that they have all the facts; we at TTWhistleblower will ensure you do.

Economic diversification

Following its failure to meet 2016 PSIP targets, the Government stated in the 2017 PSIP: “For fiscal 2016, Government advanced its strategy of restructuring and diversifying the national economy by supporting the development of a number of key initiatives in the areas of industrial and business development in Trinidad and Tobago.”

This is despite the fact that as we entered 2018, the Prime Minister in an address to the nation admitted that for diversification to begin, other economic factors need to be settled. For an issue so critical to sustainable development, Dr Rowley was given a free pass and was never publicly called to account for what amounted to misleading the nation.

Back to the PSIP…the 2017 diversification expenditure amounted to $19 million out of a $50 billion plus budget.

Expenditure of $6 million was incurred in providing further assistance to the film, fashion and music industries. Financial respective companies of FashionTT, FilmTT and MusicTT.”

The Rowley Administration defined its achievement of advancing diversification by:

  • Sponsorship of event “Decibel 2014” amounting to $0.1 million;
  • An initial payment of $0.1 million was made to Tribal Worldwide for website development;
  • Provision of support to the French Caribbean Inward Buyer Mission amounting to $0.1 million;
  • Payments of $0.7 million made for airfare for facilitators, videography and transportation for the Music Publishing Camp;
  • The music Content Creative Initiative was supported with injections of over $0.2 million for videography of interviews with music artists, producers and DJ’s support to Cocoa Velvet Caribbean Model Management in the Trinidad and Tobago;
  • Fashion Week and Tobago Fashion Coda 2016 payment of $0.5 million to the Production Expenditure Rebate Programme towards Happy Birthday Film Productions related to the film “Girlfriends Getaway” which was filmed in Trinidad, and
  • Support to the Production Assistance and Script Development Programme (PASD) amounting to $0.3 million for the award of grants for the production of four (4) projects including: Temple by the Sea, The Two Cents Project, The Butterfly Princess and Protest.”

    How these projects were supposed to aid in building new economic sectors that can support the national economy as the energy sector wanes is anyone’s guess.

A review of the 2017 PSIP also found: “The sum of $0.5 million was utilised in 2016 to continue the thrust towards diversifying the economy through the development of the non-energy manufacturing sector. This involved the development and implementation of a comprehensive strategy for the effective promotion of investment opportunities, through the creation of select prospectuses in the following targeted sectors: manufacturing, aviation services, agri-business inclusive of fish and fish processing, maritime, creative industries and software development.”

If half a million dollars was spent on all of these sectors and sub-sectors with the claim of pushing forward with economic diversification, the nation deserves an explanation on the outcome of such paltry sums of money on major industries.

The Business Community

Approaching the 2019 budget in an economy that now carries the immense burden of $TT 122 billion in debt, the business community has also made clear its expectations of the Finance Minister.

The Trinidad and Tobago Chamber of Industry and Commerce issued a statement on what it believes to be the top priorities for the Government. Among those priorities are:

Foreign Exchange

The Chamber acknowledged a marginal improvement in FOREX access, but insisted that there is still a significant imbalance and called for active management of the exchange rate.

Economic stability

The Chamber said Government must manage the fall in revenue especially in the energy sector and the impact on foreign exchange in order to regain some level of economic balance and stability.

Empowering the Private Sector

The business group stated that the closure of Petrotrin’s refinery has created great demand for more jobs. The group stated that the economy must be directed to a position of producing sustainable jobs which can happen if private businesses are empowered.

Improvements in delivery of public services

The Chamber stated it expects to see improvements in the transformation in the delivery of public services. Improvements are vital for both business and the public, as it can result in improvements in the crime situation and improvements in healthcare.

Stronger Revenue Collection

The Chamber also expressed the hope for initiatives in the budget to improve revenue collection.

IMF Weighs In

These proposals from the Chamber, representative of business organisations across Trinidad and Tobago, including Tobago through its Tobago Chamber of Industry and Commerce, came as the International Monetary Fund (IMF) gave its own forecast for the local economy.

According to a news report from i95.5FM: “The IMF says positive growth should return to the country this year.

In a statement following an examination by its board of directors, the Washington-based financial institution said yesterday the local economy has continued to contract but at a slower pace, underpinned by the strong recovery in gas production.

It said weak activity in construction, financial services, and trade, continued foreign exchange shortages, and slow pace of public investment dampened Non-Energy Sector growth and that positive growth should return from 2018 as the recovery takes hold in both sectors.”

The IMF’s statement also indicated: “According to the IMF the external position is weaker than the level consistent with medium-term fundamentals and desirable policies, but Gross International Reserves provide significant financial buffers, along with the heritage and stabilization fund, although reserves are projected to fall gradually given the current foreign exchange regime.

The Financial Sector is said to be stable, with profitable, well-capitalized banks, while the recent decline in asset quality, rising household debt, large domestic and regional sovereign exposures, and an interconnected financial system create pockets of vulnerability.”

The IMF said economic prospects are expected to improve over the medium term, but remain heavily dependent on the Energy Sector.

The IMF has for years bemoaned this country’s reliance on the energy sector and called for stronger action on the foreign exchange mechanism used by the Government, as well as a comprehensive economic diversification plan.

Yet, in this statement, the IMF is acknowledging that recovery from a deep recession is primarily because of global energy price recovery and local output increases.

It further acknowledges the declines in other sectors and the slow pace of public investment dampened Non-Energy Sector growth, a factor which the TTWhistleblower has continuously highlighted.

Still, with the 2019 budget mere hours away, the nation waits to see if the Finance Minister and the entire Rowley PNM Administration will continue with its con-man economics by mixing dubious figures with political theatre, or finally answer for its poor performance, and try hard to bring the local economy into recovery.

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