Leaving no one behind

This has been the Finance Minister’s most taxing year – at least figuratively – thus far. On Friday, Colm Imbert will present a mid-year review of the national budget, requesting nearly $2.7 billion in additional funds to bolster ministries and public services as the country emerges from a nearly three-month lockdown to mitigate the spread of covid19. We already have an idea of the bad news – a $15.5 billion budget deficit, a $6 billion covid19 relief plan and falling revenues because of depressed oil and petrochemical prices.

The bulk of the supplemental allocations are expected to go to the Ministry of Finance ($880 million) and the Ministry of Social Development ($581.8 million) – not surprising since these are the two agencies responsible for overseeing most of the Government’s stimulus and safety net policies in the wake of covid19, including salary relief grants, VAT and income tax refunds and food cards. The challenge, and what the country is likely eager to hear Imbert elucidate, is how the government plans to pay these unexpected bills – including if it has yet tapped into the Heritage and Stabilisation Fund.

The main source of government revenue – taxes, usually on profits – will of course be slashed. So, it is incumbent on the minister to find viable alternatives – even if it means borrowing. So far, Government has raised $500 million on the domestic market to pay for increased goods and services for regional health authorities and sourced nearly US$300 million (about TT$2 billion) from international agencies like the World Bank, the Development Bank of Latin America (CAF) and the Inter-American Development Bank (IDB). (Government has noticeably avoided availing itself upon the IMF’s facilities like the Rapid Financing Instrument, which many Caribbean have tapped into). It remains unclear if and how any of these funds have been accessed and allocated.

While to its credit, Government has responded rapidly to the coronavirus threat, the impact of the lockdown will undoubtedly have far reaching and long-lasting implications on the country’s society and economy. And in an election year, Government must be careful to ensure it balances its responses, especially to the most vulnerable, in a way that is not viewed as exploitative or opportunistic to curry favour and consequently, votes. The country’s scarce resources must be allocated equitably, transparently and with accountability. Social services already cost the State $9 billion, or six per cent of the country’s income, and because of covid19, that estimate may now increase to $11 billion, or between seven to ten per cent of GDP in the coming year.

This brings us to the Roadmap to Recovery. It’s an ambitious undertaking, incorporating inputs from the public and private sectors and civil society, and may well serve as a manifesto template for the government’s re-election bid as it prepares to execute the committee’s recommendations. The Prime Minister noted last Saturday that he received an initial copy of the phase one report, which considers the immediate to short-term response to the coronavirus. A key rhetorical point is “leave no one behind.” Whatever the Government decides is bound to be controversial, if only because of electioneering. But we trust that, given these unprecedented times, unprecedented action for the benefit of every citizen will prevail.