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Thursday 21 March 2019
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Commentary

Tough times ahead in 2019

PAOLO KERNAHAN
PAOLO KERNAHAN

IN HIS 2019 budget presentation, Finance Minister Colm Imbert trilled that his government had achieved what the previous administration couldn’t: “We have turned the economy around, from contraction and stagnation to real economic growth and the prospects for the future are bright!”

The minister cited a number of gas projects as fuelling Government’s optimism as he made the case for the green shoots of economic revival.

At the time, many in the business sector were inclined to parrot the minister’s sunny outlook. Perhaps they were hoping for some sort of contagion effect to spur consumer confidence to grease desperately needed spending. After a few more rounds in the ring with 2018, however, some private sector spokesmen have changed their tune.

At least for some of those interviewed by reporters, the forecast for the coming year isn’t as rosy as they’d hoped. Additionally, the Central Bank, the IMF and economists have, rather inconveniently, gone off script. They’ve added their voices to the din of concern about slow or close-to-zero growth for TT.

Not too long ago I read a newspaper columnist in the US who opined that far too often when the media are trying to gauge the performance of the US economy, they tend to focus almost exclusively on the health of big businesses, major corporations and Wall Street. The columnist argued this tendency produces a skewed prognosis as it ignores those most affected by a weak economy.

Medium-sized and small businesses are major employers in the US. If their performance is undermined, their functioning as a significant driver of economic growth is neutered.

Furthermore, most consumers are ordinary working people with limited financial wriggle room. If they find themselves cornered by rising costs of living or job loss their purchasing power is further reduced or eliminated. That results in fewer dings at cash registers and subsequent investor confidence jitters.

In TT, the finance minister’s optimism could only survive in the thin atmosphere of the Parliament and in the minds of party supporters. In the real world, 2018 was kicking the stuffing out of many small businesses and working schmoes.

For example, in announcing increases in fuel costs, Minister Imbert stated that with the price of diesel remaining stable, the cost of public transportation and the costs to transport consumer goods, foods and materials would not be unduly affected.

In a utopian world where everyone travels to work on a diesel-fuelled bus, the minister’s assertions might have been tolerable. Ordinary citizens know, however, taxi fares in different parts of the country have edged upwards because taxi drivers live in the realm of increased costs of living, poor roads, and adjusted fuel prices.

The minister’s hypothesis that the prices of foods, materials and services would not be unduly affected by transportation costs assumes diesel is the only factor influencing overheads.

The availability of foreign exchange remains a serious challenge for the economy, affecting commodities and services across the board. If there is anyone in this country who can claim food prices haven’t skyrocketed, chances are they’re the types who aren’t waiting for the Government to review marijuana legislation.

Rising unemployment, underemployment and non-renewal of contracts have shaken consumer spending. You needn’t have lost your job to be hesitant about spending. You need only be sufficiently worried your job could be next or that, as a small business owner, prospects will remain flat.

So the business sector, economists and the Central Bank are seeing and reporting what ordinary people have been living. The best result we can hope for from this breath of honesty is the removal of the political scales from our eyes. For too long, many citizens have lived in denial of the economic realities. Their political loyalties prevent them from accepting our circumstances for what they are. The enslaving fear is that criticism of the Government is the same thing as support for the Opposition.

Everyone has an obligation to themselves to honestly critique the Government for their performance on the economy because it impacts you more than it does them. Ministers’ salaries and perks are guaranteed. Yours are jumping up in non-stipendiary steelband.

Criticism isn’t the same as condemnation. It is time to set politics aside and embrace genuine debate about how this country’s economy can be strengthened. It is too late for anything else.

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