By VASANT BHARATH
The dramatic fall in oil and gas prices and the fiscal impact of the coronavirus have again exposed Finance Minister Colm Imbert’s glaring unsuitability to steer the economic ship in the current choppy waters.
Imbert predictably reached for his timeworn go-to measures of raiding the Heritage and Stabilisation Fund, sponsoring fire sales of State assets and knocking on the doors of lending agencies.
These steps have been his conventional and inane responses to each economic jolt during his beleaguered stint as the Minister of Finance.
It was not surprising that the Express newspaper editorialised that the Minister “lacked substance, was woefully inadequate and failed to inspire any confidence that he has an even adequate grasp of the short-term challenges facing the country.”
Other knowledgeable commentators condemned Imbert’s response as inappropriate, deficient and lacking creativity and purpose.
The Minister’s vacuous statement lacked scenario planning in the event oil prices further decline and hurt the T&T economy even more.
In his typical aloof manner, he declined to provide details on the planned deficit financing, on whether the local capital market would be tapped again and whether the country could face downgrading to junk bond status.
Indeed, the latest economic blow compounds a woeful state of affairs, with four years of declines, $107 billion in debt, an ever-climbing debt-to-GDP ratio, dangerously low import cover, and rising unemployment.
Imbert failed to offer meaningful proposals to boost the long-suffering private sector through tax breaks and other incentives, issuance of Value Added Tax (VAT) refunds and other valuable means.
There is a massive and unprecedented $4.8 billion in liquidity in national banks that, in the appropriate investment environment, would be put into productive
The Government has failed to cultivate that financial ecosystem in spite of repeated representation and the obvious national benefits.
The Minister seemed unaware that the sharp decline in oil and gas prices is likely to severely impact the local manufacturing sector since virtually all raw materials are imported.
The gov’t has made no efforts at reversing the downward spiral
Furthermore, China and India, which import about 10 million and 6 million barrels per day of oil respectively, would enjoy significant savings as a result of the lower prices.
This would make both countries even more competitive, to add to inherent advantages of labour productivity and other historic efficiencies, further eroding the ability of TnT manufacturers to compete on both home and export markets.
Note that under the current administration, Trinidad and Tobago has slumped on the all-important Ease of Doing Business indices, which means that this country has lost its attractiveness as an investment destination. Indeed, there are 104 countries worldwide where it is easier to do business than Trinidad and Tobago.
The Government has made no efforts at reversing the downward spiral, while several Caricom countries have enhanced their investment circumstances.
Jamaica is now being described as the Caribbean’s most desirable business destination.
Imbert also failed to place emphasis on agricultural production, even though T&T imports an astonishing 80 percent of the food that lands on our dinner tables.
The Rowley Government has callously rolled back the gains in food production achieved by the previous administration and has blatantly ignored this vitally important sector.
Food sovereignty has never been of interest to the PNM gov’t
Food sovereignty has never been of interest to the PNM Government despite grandiose manifesto promises.
The PM, himself a former Minister of Agriculture, is on record as saying that we do not have enough land in TnT to grow food to feed ourselves. Yet over 70,000 acres of ex Caroni lands lay idle!
In the current unpredictable international circumstances, food imports could be hampered, with producing countries withholding supplies for their own
How, then, would T&T feed itself?
In a singular reference to food and in a most bewildering move, Prime Minister Dr. Keith Rowley recently touted the importation of ground provisions from far-away Ghana.
That purported initiative was a telling commentary on the head of the T&T Government.
The economic realities should also have the Central Bank on standby to reduce interest rates in order to bolster economic activity, as has been done by several such institutions in other countries.
Imbert’s handling of the financial crisis was that of a pedestrian bookkeeper attempting to balance figures, and, once again, betrayed his lack of imagination, capacity, and competence.
The Minister’s manifest ineptitude now sees the debt-to-GDP racing to 70 percent, although the International Monetary Fund (IMF) has said that 60 percent was the optimum level for the domestic economy.
Most economic sectors are in a tailspin. The poor is becoming poorer. The middle-class is being wiped out. The cost of living is rising and anxiety is pervasive.
Against that backward state of affairs, the ever-bungling Imbert is now tasked with leading T&T through the latest economic crisis, one in which there is no end in sight.
T&T could be heading into a long, dark tunnel
And still, diversification remains a dirty word for the Rowley regime, with no efforts at weaning the country away from its reliance on the declining energy sector or even to spawn sustainable downstream industries.
T&T could be heading into a long, dark tunnel, since commodity prices are likely to further fall and remain depressed, and marginal sectors like tourism, travel, and hospitality would face tremors.
Global value chains have been affected by the coronavirus, through the shutdown of factories, and those circumstances may worsen before they eventually improve.
Foreign Direct Investments (FDI) are likely to move from countries that are badly affected by the health disaster, but T&T’s lack of competitiveness would hardly place us on the market.
In addition, much of the country’s domestic capital, both human and financial, is likely to be underutilized or idle.
The unchartered waters require competent and experienced economic leadership, a resource dreadfully lacking in Rowley’s Cabinet and way out of Imbert’s reach.
An adept and proficient administration would have assembled a team of talented and knowledgeable experts to map an effective and workable plan to maneuver the country out of the twin oil-gas price and coronavirus crises.
But we should not expect such a resolute and visionary approach from a Government that disbanded a team of respected economic advisors without accepting a single piece of advice and that has distanced itself from competence and expertise.
Instead, the Imbert-onomics of borrow, burn and beg would prevail, even as the unskilled and incapable Finance Minister leads Trinidad and Tobago into an ever-deeper financial hole.
We could anticipate the economic quality of our lives being further shattered and future generations having to pay for the most wretched and incompetent Minister of Finance in Trinidad and Tobago’s history.