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Thursday 15 November 2018
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‘No economic turnaround with this murder rate’

UWI Senior Economist Dr Roger Hosein
UWI Senior Economist Dr Roger Hosein

ECONOMIST Dr Roger Hosein says the economy has not turned around when there is such a high murder rate. “Each day that passes I think about migrating.”

Speaking at Amcham’s mid-year budget analysis, Hosein said the murder rate could surpass 550 (the record high in 2008) and he has started to think about options for his children migrating, although he had planned to die in Trinidad. He stressed that crime and the murder rate should be the first things discussed on any diversification agenda. In light of a mid-term review, with not one word on crime or the murders, “We are in more trouble than we think.”

Hosein said the issue would factor into the conversation about the economy and there would not even be a turnaround. He questioned f when this turnround had started and asked, and “Turnaround from what? You have to give me well-defined scientific criteria. Is it the unemployment rate, the crime rate, the murder rate, the current account balance, the fiscal balance, the debt, the distribution of GDP? From what?”

He said August 2016 was the worst period in the recent past, and compared to that time, oil prices had increased, natural gas prices remained the same, natural gas production had increased and there was a little increase in crude oil production. “So from this perspective the turnaround did take place.”

With regard to unemployment, he said, unless 5.3 was less than 3.1 per cent, “We cannot say there was a turnaround in the unemployment rate.” He pointed out from 2007 to 2017 the economy grew 0.2 per cent but produced 4.5 billion barrels of oil, and if this was his personal business he would be worried.

“But that is the danger of public funds – you can make all kinds of statements and use the money in all manner and form that you are not really, at the end of the day, legally responsible for. You may lose an election, but that’s it. Somebody else will just raise taxes and recover the resources.”

He said economic growth has returned but the economy has not turned around as one would wish. “We are still in the process of completing this century. And if it is we were to pause and get distracted and not focus on the rising unemployment rate, the rising debt level, the rising interest payment, the labour-force participation rate – that is the lowest since 1994 – a current account balance that is still on the decline and, most importantly, a real effective exchange rate (this country’s currency compared to other major currencies) that is still 25 per cent over value – then I don’t know if we will reach that place.”

Celebrating prematurely has consequences, he said. His view of growth in this country, Hosein said, was deep-rooted sustainable growth and not “sleight of hand” growth. He also stressed the energy industry was a “a sunset industry” and the real target was the development of the non-energy current-account balance. He predicted that if in the next five years this balance could break even, then all associated changes would come.

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