FINANCE Minister Colm Imbert said if government had ran a surplus budget, it would have “crashed” the country.
He was delivering the feature address at the TT Chamber annual post budget analysis breakfast meeting on Tuesday at the Hyatt Regency.
EY Caribbean chairman elect Wade George in his presentation urged TT to follow the Jamaica example and pointed to their reduction of debt-to-GDP ratio by 50 per cent, had its lowest unemployment and had the best performing stock market in the world for the last five years.
Imbert in response said Jamaica was very good at marketing and was a lot better than TT. He said, however, on comparison the per capita GDP for this country was about US $16,000 compared to Jamaica where it was $5,000 or less than one third. He also said TT’s credit rating was investment grade while Jamaica was highly speculative grade “way out of investment grade”.
Imbert said Jamaica had been in an IMF programme for 44 years. “Can you imagine TT being on a forced austerity programme for 44 years?” He said when a country goes to a lender of last resort like the IMF one of the things that the country was forced to do was to run a budget surplus. Imbert said if TT was to run a budget surplus of five per cent of GDP then it would be a surplus of $38 billion and expenditure by the government would be $37 billion.
“And can you imagine what would happen in TT if Government only spent $36 billion? The entire country will crash.” He said for this surplus government would have had to retrench workers and reduce the incomes of people.
“So pray you do not get there. Because if the Government was not spending 50-odd billion and putting it into this economy this country would not survive.” Imbert said it was “easy” to talk about debt but this Government had no alternative but to borrow for the first two to three years. He added some people said this country should not run a deficit but if the country had not chosen to run a deficit Government would have to retrench 10,000 workers and increase corporation tax to 50 per cent.