Rambarran: Govt not heeding advice of own experts

 Jwala Rambarran.
Jwala Rambarran.

Government depending on the sale of CL Financial assets to bridge its $5 million budget deficit is ill-advised as the conglomerate is mired in legal issues says former Central Bank governor turned temporary Opposition Senator Jwala Rambarran.

Government was also failing, he said, because it was not heeding the advice of its own economic advisors and he questioned what the funds drawn down from the Heritage and Stabilisation Fund were used for.

With only two years of the PNM Government in office, Rambarran also told the Senate yesterday during the budget debate, the TT dollar officially lost six perecnt of its value. While the TT dollar is trading at TT$7 to US$1 at commercial banks, he said, it is trading at TT$8 to US$1 on the black market, which means there has been a de facto devaluation of 25 per cent of the TT dollar.

Commenting on Government depending on the sale of CL Financial assets to finance its budget deficit, he said, “The ownership and sale of these assets is a legal matter for the courts to decide and not the Minister of Finance.” He said, CL Financial is in receivership, Clico is under legal control of the Central Bank,and CIB is in compulsory liquidation supervised by the High Court.

The courts do not work according to the minister’s schedule, he said, and it is likely that the budgeted financing expected to come from the sale of the assets will again be delayed this year leading to a larger than budgeted deficit.

“It means that the minister will have to borrow an additional $5 billion or again raid the Heritage and Stablisation Find (HSF) to finance his deficit,” he said.

On borrowing from the HSF, which should have been a last resort measure after significant expenditure cuts had been made and all financing options exhausted, Rambarran said, by the 2020 general elections, “It is quite likely that this government would have eaten up eight years of savings.”

The Finance Minister, he said, “should tell us whether funds drawn from the HSF were used to finance the Brian Lara stadium, or the Prime Minister’s house in Tobago, and whether it will it be used to finance the extension of the Churchill Roosevelt Highway to Manzanilla, or will they be used for golf courses?”

With top economic experts who played significant roles in the 1980s in monitoring the implementation of the International Monetary Fund (IMF) when the then government had no option but to go the IMF, Rambarran said, “One would think that with such esteemed economic firepower, this Government would be firing on all cylinders when it comes to managing our economy.”

Instead, he said, “in 2016, we experienced the sharpest economic contraction in 33 years.”

The experts, he referred to as “the Trinity of economic experts” were Dr Terrence Farrell, a former director of research at the Central Bank, now chairman of the Prime Minister’s economic board; former Central Bank Governor Ewart Williams and now economic advisor to the Minister of Finance, and former senior economist to the Central Bank and now Governor Alvin Hillaire.

“The reason why Government is failing is because it is ignoring the advice of its own experts,” he said.

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