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Sunday 26 May 2019
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PM’s report raises more questions than answers

Business Day Editorial

Whether the Prime Minister’s televised appearance this past week was an address to the nation or a paid political broadcast, we can agree that Dr Rowley laid out his perspective on the state of the economy, carefully placing all the blame on whom he felt was the cause of our current position and spent some of the spare time telling us of current and intended projects.

While the PM shared his views on the contributing factors to the downturn and the steps Government has taken to arrest the challenges, any mention of an economic plan was starkly absent.

This no doubt will be the Opposition Leader’s whip should Rowley agree to debate her on the issues. What is the economic philosophy that is being considered? Has there been an abandonment of the role of the Government in the economy? Is profitability to be the deciding criterion for state enterprises? Very importantly, the PM did speak to relationships that have been nurtured with the Chinese and Australian governments. What about funding for the projects he has listed? What are the arrangements? How is the overall debt stock to be affected? What are the possible inter-industry linkages that would be created and the multiplier effects? Are the projects to be part of overall sectoral investments that will stimulate forward and backward linkages?

The PM also spoke about getting the private sector to take a more active role in agricultural projects, such as the Aripo Agricultural Programme. Was this a policy change in agriculture or does it represent an intended paradigm shift for the economy as a whole? Once again this requires an economic plan with supporting policies.

The PM addressed Petrotrin and the positives that came out of Government’s decision. However, the issue of funding the $2.9 billion payout to Petrotrin workers was never dealt with. Where did that money come from? Was it taken from recurrent expenditure or was a bond taken out? How is the bullet payment on the Petrotrin bond (US$850 million) that is due this year to be paid?

It does appear that some debt has been re-scheduled and there will be new debt to finance some of the projects. What is Government’s position about the debt to GDP ratio? Is the IMF’s guide of 60 per cent debt to GDP a limit that should not be crossed?

With the increasing unemployment that the PM has acknowledged, what are the likely effects on inequality and poverty? What are the negative welfare effects that are being addressed? Are there specific policy initiatives to address these? What is the policy position on worker training and education, or even incentives for entrepreneurship and small business development against the back drop of job losses and increased unemployment?

There are many countries, most recently Ghana, that are establishing financial stability councils and even developing legislation in order to anchor fiscal discipline and prudence in the management of the economy. These will also ensure that the fiscal balance is maintained at a sustainable level, the management of risks in a prudent manner to achieve efficiency, effectiveness and value for money in public expenditure and will also monitor the performance of the government budget with regards to compliance and targets. Should this not be something to actively pursue?

These represent just a few issues that have either not been addressed or have been intentionally excluded from the conversation. They should be included in the national dialogue going forward.

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