“It is evident we must abandon a return to normal mindset and instead aim to devise ways to consciously transform the economy.”
Secretary for Finance and the Economy Joel Jack made this appeal to Tobagonians on Monday, telling them the island’s development can no longer be business as usual, post covid19.
Presenting a $4.71 billion request to central government in the Tobago House of Assembly’s (THA) 2020/2021 budget, Jack said the statement took into account the effects of the pandemic.
Jack noted covid19 had forced many territories to review their economic agendas. He said Tobago is no exception.
“Covid19 has upended all previous forecasts for the global economy leading to a virtual shutdown of the economy.”
However, stakeholders claim Tobago’s economy was in the doldrums long before covid19.
Further, they dismissed the presentation as a rehash of old ideas with no real initiative to propel the island forward.
Financial analyst/chartered accountant David Walker agreed with Jack’s statement about the need for Tobagonians to “abandon a return to normal mindset.”
However, he believes the budget, titled Recalibrating Our Priorities Towards A More Resilient Future, does not support this thrust.
“I have seen no evidence of it in the document. No new thinking. It is very similar to all of the old budgets,” Walker told Business Day.
He also observed Jack spoke in general terms about the administration’s achievements over the past three years.
“It was not specific in the sense that what he has failed to do, to my satisfaction, is to identify targets and say we have achieved what we set out to do. Or we have achieved more than we set out. It was just broad-brushed statements.”
Walker also poured cold water on Jack’s boast the assembly had maintained transparency and accountability in its activities over the period.
He said: “This is a bit rich given the situation with the THA, the lack of audited statements and a host of reported incidents like the money that was paid to the singer who never turned up and there was no apparent acceptance of a responsibility to keep us updated. It is as if these things don’t exist anymore.”
Walker was referring to R&B artiste D’Angelo who was reportedly paid US$430,000 by the Division of Tourism, Culture and Transportation to perform at the Tobago Jazz Experience’s World Music Night at Pigeon Point on April 29, 2017. D’Angelo did not perform at the event.
Cultural activist John Arnold, who was chairman of the Tobago Jazz Festival at the time, had told the media D’Angelo was unable to perform because his grandfather had died.
The matter is still being investigated.
Saying the budget should have placed emphasis on Tobago’s mainstay, tourism, Walker believes it offered “no new direction” for the sector.
Jack has proposed the Division of Tourism, Culture and Transportation receive $234.7 million, the sixth largest chunk of the budget.
The Division of Health, Wellness and Family Development is requesting the lion’s share of the budget – $801.7 million.
It is followed by the Divisions of Education, Innovation and Energy ($525.6 million) and Infrastructure, Quarries and the Environment ($475 million).
Describing the statement as a farce, Walker said: “This pathetic ritual sees the assembly present a budget with great pomp and fanfare, which everyone knows will bear no relation to reality.
“The most realistic description one could put to that statement is that it is a budget request, albeit an unrealistic one rather than a budget statement.”
Outspoken Tobago Chamber of Commerce president Diane Hadad also dismissed the budget as “fluff and talk."
“It lacked depth in terms of content. And when you get to the reality of what it is really saying, it has shown based on the data and numbers, that our economy has shrunk drastically even prior to covid19, which is what the chamber was saying all the time,” she said.
Prior to Jack's presentation, the THA had assigned a 17-man committee to come up with an economic policy to chart Tobago's development post covid19.
On June 3, Chief Secretary Ancil Dennis announced the team which is chaired by Dr Selvon Hazel, the chief economist, Division of Finance and the Economy, who is also on the national roadmap to recovery team. The committee was due to begin its work on June 1, however, the members only received their instruments of appointment Tuesday. Dennis had a meeting with the team later on Tuesday and was updated on their progress. The team is due to submit their first report in four weeks, the Office of the Chief Secretary said in a post on its Facebook page.
The Tobago committee is divided into seven sectors: finance; tourism; food production; governance, productivity and human resource; sustainability and innovation; creative economy and social development.
In his budget presentation, Jack, who is also on the national committee, and chairs an Executive Council sub-committee, said the initial mandate included a stimulus package to minimise the effects of the pandemic on Tobagonians. Discussions were held with the Tobago chapter of the TT Chamber of Industry and Commerce, the wider tourism sector, cooperative societies, trade unions, supermarket owners and other small business owners. A series of economic and social measures have since been approved by the Executive Council, he said.
He told the assembly the Tobago recovery committee's role is to come up with specific measures "to reset and reinvigorate" the island's recovery. A preliminary report is expected by the end of July, he said, with the final report due later this year. "...the assembly proposes to undertake a number of fiscal measures with the overall objective to arrest any declines in economic activity and to set our economy on a trajectory for recovery and positive growth. Our stimulus measures will be geared primarily towards ensuring business continuity, preserving and creating jobs, stimulating production and aggregate demand and protecting our society’s vulnerable groups," he said.
However, Hadad said the package offered no meaningful solution for growing the economy.
“They do not seem to have any good ideas in terms of how we are to be moving forward because a lot of money is now being asked for health. So, it almost seems as though we have a sick society.”
Like Walker, Hadad also observed the tourism sector was not a priority in the presentation.
“So, it means we are really not talking about economics.”
She also wondered whether some of the measures outlined are in alignment with work already being undertaken by the THA-appointed covid19 economic recovery team. She complained the team was given a "long time to fix something that was called a crisis.”
Hadad said the THA’s leadership offered little hope in “guiding the process” of development, post covid19.
Asked if the THA had approached the chamber for recommendations before the budget, Hadad said she was asked to attend a virtual meeting last week “which the membership found to be a little bit late.”
She said the chamber, which has close to 80 registered members, has long felt its pre-budget recommendations are never taken seriously into account.
“And so, their interest to participate is really low and therefore there really wasn’t very much to say.”
Additionally, Hadad said members have observed the chamber's suggestions to the THA over the past ten years are still relevant today.
Nevertheless, Hadad remains optimistic “because I always believe that the source is much bigger than the human beings that put themselves up for leadership.
“However, the reality of what the mood is in the environment means that people like me have a bigger job to do in terms of keeping the others upbeat and not in the position of hopelessness because what is being put out there does not give you the encouragement.”
Economist Anslem Richards believes the Tobago economy is dead.
“The Tobago economy has been upended. There is no economy happening in Tobago now,” he told Business Day.
“Tourism is dead and everything that spins from tourism in terms of the services sector, distribution and banking were impacted by the level of tourism activity.”
Richards said the government sector is the island’s only saving grace.
“They continue to subsidise and provide social safety net support. That is the only thing that working for the government now.
“That is the only thing keeping the miniscule demand that is available alive.”
The economist observed for yet another year the budget’s estimates have suggested that 60 per cent of Tobago’s population are employed in the government sector.
“But, outside of government, the economy is dead. There is really no vibrant beating of any economic drums in Tobago at this point in time.”
Richards said he also is not convinced the drive towards domestic tourism will revive the economy in the short to medium-term.
“Hoteliers are now trying to do a local promotion to hope that Trinidadians would come to fill all of the empty hotel rooms. But, I don’t know how that will work because the Trinidad economy is taking a beating too.”
He added: “A deficit of $15 billion is not an easy black hole to shine a light in when your main source of income from revenue and energy are down because of the global pandemic.”
Richards said the budget was really a draft of expenditures “because it is about what they want to spend without even tying the expenditure to output.
“So, it is really keeping with the legal definition of what the event really is – a presentation of draft estimates and probably income to a lesser extent.”
He said the budget lacked ingenuity and creativity.
“The budget is bland. It is flat. The same old narrative that is rehashed.
“Covid19 could not even squeeze the juices out of the authors and presenters of this document. They really did not do a good job in terms of coming up with some kind of plan in response to the impact of covid19.
“And given the declining trend the Tobago economy has been in for nearly ten years there is nothing to celebrate.”
Referring to the $4.71 billion being requested, Richards argued Jack should have crafted the budget to include projects and activities in response to the challenges created by covid19.
“He should have come with clarity so that the people will understand where you want to go, why you want to go there and their role and responsibility in the process.”
Richards said Tobago is in “a very dark place."
“The times ahead are going to be very difficult for all of us. Tobago needs critical, enlightened leadership to change the fortunes of the people to transform and develop the economy, to exploit the resources and the opportunities that are before us.”