Does economic strategy trump common sense?

THE EDITOR: This is an open letter to the Prime Minister.

It is accepted that a country’s growth depends on efficient institutions, such as government institutions that provide services to citizens and services that make the private sector effective and more competitive, resulting in increased trade, receipt of greater foreign exchange, and increased revenues.

This requires the attraction and retention of competent workers, a proper working environment and conditions. Competitive salaries is a prerequisite and motivation for successful implementation and operation of effective policies.

In addition, wise budgetary outlays in recognition that resources are not unlimited is basic, as exemplified by priority expenditure on basic goods and services, with the ministries of education, national security and health occupying high priority in respect of such allocations.

Subsidies and transfers are also crucial to maintain balance and provide for the less fortunate among us.

Given the above, I wish to make a few observations.

The first relates to the implementation of the Salaries Review Commission (SRC)'s recommendations.

Notwithstanding the long-term economic benefits of the recommendations, one ought to consider that the low-income individual, like the highly skilled, high-income individual, has to face the same grocery and market prices. They therefore cannot see sense in supporting a party that supports higher salaries for people already in receipt of higher salaries while they must settle for a significantly lower per cent increase.

You may be reminded that the PNM has always identified with low-income workers and efforts to raise their standard of living through the expansion of public-sector work, the imposition of an unemployment levy, as well as the maintenance of a progressive income tax regime, which all allow for increases in subsidies and disability and unemployment relief programmes. To change this view would be to distance the party from its base.

Secondly, the cap placed on qualifying savings of less than $25,000 for access to the senior citizens grant, even though this was deemed to be an error, was severely frowned upon.

I wish to remind the authorities that whereas the grant is being abused, seniors are concerned with providing for their funeral arrangements. And the cost of a decent funeral far exceeds $25,000. Therefore, other measures must be found to address the abuse.

There is also the feeling that you tend to pander to the rich, preferring their company, and your favourite hobby on the greens adds fuel to this feeling. You are additionally accused of saying “I would like the rich to get richer so that they can help the poor.”

It is an accepted economic policy that the rich have a higher propensity to save than the poor, leading to investment, but this is mainly because the rich receive higher incomes and therefore have more to save, while the poor spends most of their income on their basic needs. Further, there is no belief among the poor that such a policy benefits them.

The introduction of a state of emergency without restrictions may be considered a positive move by your support base.

There is the popular view that undecided voters, mainly the middle-income, affect the outcome of elections. However, there is also the view that disaffected voters who withhold their support are just as crucial in deciding outcomes of elections.

The crime scourge, retention of the current Commissioner of Police and your government’s inability to manage our safety may be the loudest criticism of your leadership, but money issues can have the most telling effect on your support base.

It is therefore critical that you think again on whether sound economic policies can trump the common thinking of the ordinary man and woman.

D THOMAS

Port of Spain