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Monday 17 June 2019
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Commentary

Sunny days are here again…again

PAOLO KERNAHAN
PAOLO KERNAHAN

IN THE 2018 mid-year budget review Colm Imbert trilled, “I can see clearly now, the rain is gone!” This year the message was exactly the same. Although he missed an opportunity to go with, “The future’s so bright, I gotta wear shades.”

So technically speaking, the economy has turned around twice; once last year and again this year, according to the 2018 and 2019 mid-year budget reviews. Two turnarounds would actually put us right where we were all along; which is in the soup.

Never mind the semantics though. Here’s Colm! The characteristically ebullient and bile-powered Imbert hacked through naysayers and negativistas (©). He had bad news for people who only like bad news, which should be good news right? The economy is on the upswing and the Government is finally ready to kick open the giant golden doors of the presumably replenished treasury.

The Finance Minister is taking credit for stabilising the country’s finances. In the absence of a clear fiscal policy, we are left to assume this simply meant clamping down on “unproductive spending.” This could include job cuts, consistent late payment of salaries, non-payment of debts, non-renewal of contracts, starving ministries and regional corporations of finances to deliver goods and services and so forth. That, it seems, did the trick of stabilisation.

Much of the growth referenced by the minister is predicated on gas production. Imbert scoffed in Parliament at a report from BPTT made just days before his rosy mid-year prognosis. The news suggested gas production by the energy giant would be down by 15 per cent in 2020 given disappointing results in two wells.

The Finance Minister initially appeared blindsided by the news prior to his presentation. He was back to his old, bumptious self by the time he took to the lectern in the house. BPTT, it seems, has its stories or wells mixed up.

He went further still. The non-economist, non-petroleum engineer appointed Minister of Finance dismissed BPTT president Claire Fitzpatrick as an accountant, not an engineer. She is entirely reliant, he says, on the information and advice of BP’s technocrats and engineers. A distinction that needed to be made, to be sure, given Imbert’s divine omniscience.

The minister and the Government have spared no effort in downplaying the significance of BPTT’s disappointing news on the gas front. It makes sense because the economic revival apparently underway is hinged on this country’s gas fortunes. Forget diversification; Imbert heralded the supposed knock-on effects of growing gas production on manufacturing and retail. So the rampaging economic recovery is inextricably tethered to the energy sector. It isn’t allowed to fail.

For the Government, the signs of recovery are everywhere. People are buying cars like crazy with more than a million in circulation. As a metric for economic performance or consumer confidence, car sales don’t tell the whole picture.

By the way, when did we hit that figure of one million cars? Was it over the last year? If a surge in car sales occurred during the recession, were we ever in a recession, or just in the matrix? Furthermore, don’t higher vehicle sales represent higher outflows of foreign exchange?

The minister applied an onerous tax to online purchases, in part to stem the flow of foreign exchange through the online shopping route. Now the untrammelled importation and consumption of vehicles is a positive sign? Navigating the Government’s reality is a tricky business.

In his mid-year campaign presentation, the minister alluded to several just-in-time-for-the-elections “goodies.” Doctors who couldn’t be found to staff the monument to PP profligacy, the Couva Children’s Hospital, have somehow materialised. Other infrastructural projects are expected to provide another boost to the economy. Jobs will be created, contracts will be awarded, the little engine that could will chug along once more. How much of a fillip, though, will short-lived jobs and contracts give to an economy that has been in decline and paralysis since 2014?

Perhaps it’s easier to take the Government’s word for it.

It’s simpler to pray for oil and enjoy the economic revival happening everywhere but where you are. Not everyone, though, has the luxury of blind faith. Regardless of the Finance Minister’s cheery outlook, a block of rat cheese is still like a block of gold. Banks and service providers don’t care if you’ve lost your job or that business is dormant. Imbert’s job is to sell his reality. It is our cross to live in ours.

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