By VASANT BHARATH
The truth shall set you free, the biblical quotation says.
Leaders have a greater responsibility to adhere to the principles of candour and accuracy, management experts have historically said.
In that context, the Trinidad and Tobago Government must relate the raw facts, even if they amount to a bitter pill and a painful reality. Sugarcoating of the realities helps no one!
Economy in freefall
The bare actuality is that the economy is now in a freefall comparable in modern domestic history only to the financial ruin of the late 1930s. Even the global financial collapse of 2009 does not compare in magnitude and reach, with the current impact expected to wipe off US$ 9trillion from the world economy.
Indeed, independent studies suggest that the current collapse would be worse than that infamous period, with unemployment of at least 20 per cent, yawning fiscal deficits, failure of most sectors and alarming levels of poverty.
All of that is projected against the on-going regression in the energy sector, shutting down or idling of 7 of Point Lisas’ manufacturing plants, and the continued mothballing of the oil refinery.
By all fair assessments, T&T is racing toward a dark and gloomy economic tunnel, with no visible light, especially under the current bungling administration.
Admit to the truth
There is a relevant adage that “it takes strength and courage to admit the truth.”
Regrettably, in his recent mid-year fiscal review, Minister of Finance Colm Imbert took a wide and irresponsible berth from the economic reality, and reasserted the fantasy he had earlier moulded around Johnny Nash’s “I can see clearly now.”
The Minister once more utilised semantics and sleight of hand to steer away from the true economic state of the nation.
Against all sensible evaluations, Imbert projected a moderate rebound over the next 12 months, he pegged to oil and natural gas exports at unrealistic prices, and he under-played the galloping debt-to-GDP ratio.
$46 billion deficit
Even with a cumulative deficit of more than $46 billion over the past five years, the Minister talked wistfully of bringing debt levels “back to their early trajectory.”
He minimised the current year’s deficit, which could potentially reach a staggering $18 billion, and he simply pulled figures from thin air about the national economic health.
He skirted the continued failure of all economic sectors, including the stillborn agriculture sector, manufacturing, construction, tourism, the lowered credit rating, foreign exchange challenges and balance of payments deficits.
He ignored the anguished pains of small businesses that are shutting up shop and tens of thousands in the informal sector who are not sure how they would meet their monthly commitments.
He was unable to report on a single investment into the country or to provide the comfort of impending improvements in the current disastrous placement on Ease of Doing Business metrics.
He simply glossed over the startling reality that the T&T economy, which was mismanaged over the past five years, is now further plummeting amid the Covid-19 crisis.
Don’t take us for fools
There is yet another pertinent adage: It is that Minister Imbert is taking us all for fools.
After all, every single international analysis is forecasting a global economic tailspin, with major contraction, especially in vulnerable developing countries, huge job losses, the collapse of small and medium-sized businesses – and more. The IMF is predicting economic declines in the USA of 5.9% and the UK of 6.5%….and similar declines with all our trading partners.
The United Nations advised of “an economic crisis, unprecedented in scope and magnitude” and “the grim reality of a severe recession of a magnitude not seen since the Great Depression.”
The International Monetary Fund (IMF) said that “the global economy” would “contract sharply” and would be “much worse than the 2008-09 financial crisis.”
IMF Managing Director Kristalina Georgieva made the bleak assessment that developing countries would require hundreds of billions of dollars in aid to get back on their feet.
The GDP of emerging economies would shrink, she forecasted, and those countries are likely to struggle for years to come.
The prediction is even more woeful for countries like T&T that are enduring a collapse in commodity prices, for which “there is considerable uncertainty about what the economic landscape would look like.”
The rise in global poverty
The World Bank tells of the spectre of “a dramatic rise in poverty” and “significant global shock.”
The bank’s dire projection is that “emerging markets and developing countries are due to shrink… their first contraction as a group in at least 60 years.”
The global forecast is for disruptions in the food supply chain, leaving T&T vulnerable to shortages, especially since it is reliant on international producers for most of what appears on the dinner table.
The Organisation of Economic Cooperation and Development (OECD) warned of a “tightrope walk to recovery”, adding that this is “the most severe recession in nearly a century.”
The International Growth Centre (IGC) places T&T among Latin American countries that “have been unable to reduce the income gap…” and need to improve human capital and infrastructure.
T&T is not in a “positive position”
Yet, Imbert, dancing to his drumbeat, touted that T&T is “unique” and is in a “positive position”, adding that “there is no liquidity crunch.”
He typically harped on the Government’s ability to borrow rather than its capacity to stimulate economic growth and to improve the well-being of its citizens.
He saw no irony concerning increased borrowings and his boast of reduced debt-to-GDP.
There were no references in the Minister’s hour-long harangue about long-overdue measures to diversify from the one-horse pony of petrochemicals.
Instead, he airily bragged that his administration had “weathered the economic storm”, even with the most appalling deficit in living memory.
Equally astounding is that he forecasted a return to the debt-to-GDP level of 63 per cent when sound economic analysts predict that it could climb to as high as 80 per cent.
He even projected revenues in the second half of the year, post covid, to be greater than that in the first 6 months! This despite the lowered economic activity, lack of economic confidence and depressed commodity prices.
He projected negative growth of (2.4%) in 2020 and a massive rebound in 2021 of 4.7% compared to the IMF’s projections of negative (4.5%) in 2020.
This despite presiding over an economy that has suffered negative growth every year since he has sat in the chair of Minister of Finance. He sounded tone-deaf to the challenges of the manufacturing sector and the anticipated decline in exports, with implications for job losses.
In short, Imbert provided an alternative reality, a spiel best suited to unthinking party loyalists rather than discerning citizens who are conscious of the critical state of play and deserve urgent and workable solutions.
His bluster has set back Trinidad and Tobago’s overdue path to progress, for the same reason that an addict cannot seek recovery unless he acknowledges a problem.
Minister Imbert’s reckless misrepresentation of the urgent and troubling state of affairs is, even by his standards, a new low in the dereliction of his important national duties.
If the truth shall set you free, Imbert and his administration have again failed the people of Trinidad and Tobago.