Tell the truth on economic situation
ON JANUARY 27, the Minister of Finance posted on social media that, according to the CSO, the Trinidad and Tobago economy grew by a healthy 4.1 per cent in the first half of 2022. Did this have anything to do with economic policy or is it due to the reopening after the lockdown?
Similarly, the minister boasted that for the first time in 14 years, TT had a budget surplus. Was this due to some plan or was it by sheer coincidence?
To the uninitiated, this sounds absolutely fantastic. But in reality it is nothing more than a deflection from the real issues facing the economy. It is pointless to quote raw statistics without correlating them with other economic indicators to see the impact on the population. Without assessing the impact on the population the Government is not being truthful.
For example, try accessing US dollars from any of the official channels and you would see the difficulty. Ask the shrinking middle class how they are dealing with the skyrocketing cost of food and inflation in general, which the CSO also reported. Has the Government forgotten the unprecedented murder toll of 614 for 2022? Did the minister try to connect the dots between the low participation of the labour force and the murder rate?
According to the CSO, the unemployment rate for the third quarter of 2022 was 5.4 per cent. Inflation in November 2022 was at 5.6 per cent. According to the Central Bank, food inflation for September 2022 was 11.6 per cent and headline inflation was 6.2 per cent. Why doesn’t the Government quote these figures to the population?
The truth is that the standard of living has declined for the middle and lower classes of the economy. Inflation and unemployment have taken a significant toll on workers. Boasting of a balanced budget and economic growth when the standard of living is declining for the majority of the population and the murder rate is at an all-time high is nothing more than political hogwash.
Tell the already burdened population, including pensioners, how they will now have to provide for property tax, increased T&TEC and WASA rates, the already increased fuel price and proposed increased court costs for several services with an average of 520 per cent for e-filing and 1,153 per cent for paper filing. Does an economic growth rate of 4.1 per cent or a budget surplus mean anything to these people?
How is the Government, that got an unplanned budgetary surplus in 2022 due to the Ukraine war, plan to address the monies owed in VAT (value added tax) refunds, BIR (Board of Inland Revenue) refunds and contractors? Shouldn’t the Government be telling us about the statistics on these matters?
Shifting to the Dragon gas deal, there has been great fanfare by the Government in announcing the deal. However, there was no commensurate announcement by the Venezuelan government. For such a deal, would it not have been an even greater PR stunt for both TT and Venezuela to have a joint press conference?
A key clause in the US waiver is that Venezuela is not to receive any cash payments and the duration of the waiver is two years. Keep in mind the average timeline for monetisation of such gas fields is at minimum three years and a critical economic consideration is that the payback period for investors is more than two years.
Any one financier for such a project would obviously want to assess the impact of the US waiver on their ability to recover their investment and the level of profit from same. In other words, if the clause is too restrictive from a business perspective, then an investor would take the investment somewhere else where there is a greater probability of an acceptable rate of return. Capital goes where it is welcomed and where it can provide the highest rate of return.
Having received approval from the Biden administration, what is Venezuela’s demand for accessing the gas? A critical consideration for investors would be if they can take Venezuela’s policy as sacred. With the current state of Venezuela, should there be a dispute, how will arbitration be settled and how will it be enforced? These are all risks that must be carefully assessed. Rowley’s enthusiasm should be measured before all considerations are taken into account.
The population by now is wary of the mixed signals and falsehoods given by the Government. The Prime Minister himself stated that rough waters are ahead while the Minister of Finance was promising smooth sailing. Time for the truth to be told on the economic situation.
Dinesh Rambally is the MP for Chaguanas West
"Tell the truth on economic situation"