It’s unlikely that Finance Minister Colm Imbert will deviate in any way from his preferred narrative of economic turnaround when he delivers his mid-year budget review on Monday.
This despite two of his six pillars announced in the budget last October – Sandals Tobago and the Dragon gas deal – all but collapsing. Two others, the fast ferry purchases from Australia and the La Brea drydocking facilities are not going to come to fruition within this financial year. That leaves just two “successful” pillars – Petrotrin’s restructuring and the launch of the National Investment Fund.
Imbert has already been boasting about the returns to the state from these policy decisions. Petrotrin’s exploration and production successor, Heritage Petroleum Ltd recently paid the state $131 million in revenues, and the National Investment Fund was oversubscribed, $3 million more than the $4 billion on offer. And if the trend of the minister’s previous budget and review presentations, continues, they will likely star among his main points as evidence of the government’s firm handle on the economy. But this is old news, and could be regarded as the tired trope of political rhetoric.
Instead, what we hope to hear from the minister are tangible plans of action to increase economic activity and boost confidence. He has already on the political platform (and at press briefings) said that the country is ready now for a new phase of economic momentum where, now that the government has successfully stabilised the economy, it is ready to increase capital spending and investment in infrastructure. He has to outline just how these mega-projects will be financed, especially given previous indications that he will likely revise the pegged oil price down from US$65 a barrel, something that will inevitably have an impact on revenue. The fact that he has already stated that there will be no change to the fuel subsidy means the Treasury will still be burdened by this item which costs the state hundreds of millions of dollars.
The Minister also intends to introduce a supplementary appropriations bill, asking the Parliament to approve more money for ministries. Considering the country is still running a $4 billion deficit, he needs to clearly articulate why and how this will be funded.
More than anything, though, the minister needs to acknowledge that even though the economy has stabilised, it is stagnant. The “turnaround” narrative, compounded by declarations of the end of the recession from Trade Minister Paula Gopee-Scoon, has not gone down well with the population. The man on the street – or in the malls – is still yet to feel the effects of this turnaround. The county is still overly dependent on volatile hydrocarbon commodity prices without any real or meaningful thrust to diversify the economy. Heritage may have made a profit this past quarter, but there are still thousands of people affected by the Pointe-a-Pierre refinery shutdown, the impact of which still has not been adequately quantified.
If the government intends to use its salvation of the TT economy as its primary argument for the upcoming elections season, the mid-year review will be their beta test before unveiling their main plan in the 2020 budget later this year. If the minister intends to deliver the same speech he has for the last four years, he’s not going to convince anyone.