Last week, Prime Minister Dr Keith Rowley was optimistic about the TT economy despite a downgrade in the credit rating for this country by Standards and Poor from BBB+ to BBB. The rating agency’s outlook is now positive, noted Rowley, last year it was negative. That’s not an unreasonable perspective, but there also hasn’t been any clear plans to steer this country back to a growth position. As the clock winds down to the next general election, it isn’t surprising for a seasoned political leader to put the best possible spin on uninspiring news, but saying a thing is okay doesn’t make it so.
For economist Dr Valmiki Arjoon, the downgrade signals increased risk for investors and “uncertainty and shattered confidence in the economy.” While a bleak outlook by an international financial agency need not encourage panic, it shouldn’t breed overconfidence in our economy.
Between the Prime Minister’s optimism for the country’s future economic performance and the Opposition Leader’s death pronouncement for its prospects there is a reality of stagnation, reluctant investors and a significant grassroots search for business opportunities.
There is need to reform the tax collection regime to improve government’s revenue but the tardy process of implementing the Revenue Authority is appalling. The government is still to demonstrate how it will forge meaningful collaborations with the private sector to stimulate the economy. The Dragon Gas deal has misfired and must now be acknowledged as joining the Sandals resort and the ardently hoped for resurgence in oil and gas prices and improvements in energy sector performance as duds that have failed to meet the expectations of either taxpayers or foreign investors.
The government must commit to articulating its economic decisions based on reliable data and financial indicators, which our institutions have proven notorious at obfuscating or rendering in impenetrable forms. To successfully collaborate with existing private sector businesses and to stimulate the growth of local entrepreneurship, the government’s commitment to providing governance information expressed as open data must be fulfilled. Until everyone is working from the same verified datasets representing the reality of our economic standing, it will remain impossible to separate wishful thinking from strategic investment and engagement.
Major government spending projects make for good electioneering and temporary surges in the economy but stifle private sector growth by misdirecting capital flows in the economy.
TT needs fewer big-ticket items and more focus on the expanding opportunities for existing businesses while supporting next generation entrepreneurship and building entry points into the knowledge economy. That won’t happen without a commitment to engineering the TT economy for the future instead of continuing to rely hopefully on its fading past.