It would be fair to say that many of us approached budget day on Monday with a little trepidation, since we all sensed that TT has reached tipping point and something radical has to be done to avert doom.
Full marks then to the Minister of Finance who began his budget presentation openly recognising the very different current global economic environment and the many anomalies and absurdities of our present situation. Our earnings from oil and gas have dropped by 90 per cent and all right-minded people agreed with him that “it can no longer be business as usual.”
People welcome the prospect of going down another road along which we ready ourselves to take full advantage of whatever revenues accrue to us over the next ten-15 years of transition from a technological world fuelled by oil and gas to one that is much more hybrid.
A decade is about the size of the window we have in which to adjust how we earn national revenue and spend it for a secure economic future. And we have an advantage since our economic fundamentals are good.
For those, like myself, who think there is opportunity in adversity, we were ready for more pressure because we know that we really cannot continue as before — spending more than we earn. We waited for the big transformative ideas to match the insights of the Minister of Finance knowing full well that whatever he did would not please everybody but that if it was enlightened and groundbreaking enough he and we would have won the day and would be set on a new and stimulating trajectory.
The moment required the minster to be bold and brave and risk the snarl of the lions. To really share the load he would have to really change the paradigm by moving from a creaking State-run economy to actively putting in place measures to grow the private sector.
The State owns too many enterprises such as hotels, gas stations, flour mills, petroleum distribution companies, telephone, water and electricity companies. These all have to be managed and run by individuals working for the State, and we know that the bureaucracy, productivity and efficiency within the State sector is poor, not to mention corrupt. Petrotrin is the perfect example.
I believe that while we have a national economy dictated by State ownership there will be dependency by all, including the private sector, on the State. In that way we continue to stunt our own development. It is worth asking, therefore, if the TT private sector is ready to take on the privatisation of the State-run companies and is it able to play a big role in an altered economy?
On the face of it, the sector appears ultra conservative, just as the banks are. The majority of our medium and large private-sector firms are importers when we need them to be exporters. There is innovation but it is small-scale, which must make us question too whether the Government could put in place better incentives for the sector to stimulate those creative sparks.
Also critical to changing the paradigm is changing the mindset, the culture of work and reward in the over-dominant public sector. The good workers are head-banging a moribund system in which vested interest profits from inefficiency. Those good people leave because of poor management or simply because the State cannot afford to treat them well. Too many public sector workers are on month-by-month contracts and wait more than that for their salaries.
The unions must recognise that we cannot afford to be massive public sector employers any more and that to seek the best interests of workers they must be part of the solution to the challenge of changing the paradigm and securing TT’s future, not their own. The budget therefore only nudged us in the right direction.