Resilient budget key to stability
By COREY CONNELLY Sunday, July 15 2012
When preparing the 2012/2013 fiscal package, the People’s Partnership (PP) Government should consider strategies to strengthen Trinidad and Tobago’s resilience within the financial sector and the local economy, generally, in the face of an increasingly turbulent international market, newly- appointed Central Bank Governor, J’wala Rambarran, said yesterday.
“We must seek to build further resilience within the financial system and the economy as a whole to external shocks, because I think the rest of the year is really going to be fairly turbulent on the international market. That is something that we need to monitor and we need to be quite vigilant about. Right now, immediately, that is a key concern,” he told Sunday Newsday during a brief telephone interview.
Prime Minister Kamla Persad-Bissessar announced Rambarran, 45, an economist, as the new Central Bank Governor during a news conference on Friday at the Coco Reef Resort, Tobago, where Cabinet ministers met on retreat. His predecessor, Ewart Williams, who served for a period of ten years, officially demits office tomorrow. The news of Rambarran’s appointment ended days of speculation as to who would fill the prestigious post. Several eminent economists, including TT Exchange Commission chairman Dr Patrick Watson and UWI senior economist, Dr Dhanayshir Mahabir, had been shortlisted as possible candidates. Rambarran, who was named among the top 50 alumni at the St Augustine campus of the University of the West Indies for his contribution to economic development, yesterday said he was still getting accustomed to the idea of leading the Central Bank.
“It is sinking in,” he said, adding that the position will be a major challenge, but “one I look forward to in the interest of serving the country.”
However, Rambarran predicted that the budget deficit, which is likely to characterise the upcoming fiscal presentation, will actually be smaller, this time around, as a percent of GDP (Gross Domestic Product).
“So, really, what they (Government) are looking for is over the medium term, to start closing the deficit gaps,” he said.
“As a matter of fact, when we talk about the deficit, when the new numbers are released that will actually show that for the last two years, we didn’t really run a deficit if we exclude the CLICO (Colonial Life Insurance Company Limited) financial support — that was pretty much close to balance. So I think the last two fiscal years actually show closer balance than deficit, of course, excluding the CLICO support, which is considered, in a sense, extraordinary.”
Last year’s budget was a whopping $56.4 billion package, the largest in the country’s history. It had a $7.6 billion deficit.
New Finance Minister Larry Howai is expected to present the budget by the end of September.
Regarding concerns in some quarters that he was too young and inexperienced for the position, Rambarran said, “As the Prime Minister indicated, I don’t think that age is a barrier that we should be considering and I am not so sure that 45 is really too young — too young for what?
“Maybe we have been accustomed to a dispensation where older heads always prevailed. But one of the things I know is that a new broom sweeps clean, but an old broom knows the corners. So it is always good to have a very good blend of old and new. It is not always throwing out the old, it is not fully bringing in the young, it is just trying to get a pretty good mix.”
Asked if he was ready to fill the void left by Williams, he stated “Definitely, yes.”
Rambarran is expected to meet with Williams tomorrow to get apprised of developments within the Central Bank.
(See Page 7)