By VASANT BHARATH
It is not my intention to disrupt your festive mood this Christmas season, especially since it is a brief and enjoyable respite from yet another difficult and tumultuous year.
But as the year draws to a close, our financial state of affairs is bad, with the economy strangulated and the outlook for 2020 not positive.
The revelation of lower-than-expected natural gas production is a crucial aspect of the disturbing economic scenario, but the negative circumstances are more pervasive and worrying.
The Central Bank is reporting setbacks in several important sectors and continued concerns over unemployment.
But the gas situation is, by far, the most alarming in the current flat economy, with forecasts for a fourth successive year of below zero growth, the first time since 1986 that this country has suffered three successive years of negative growth
Gas production for this year is expected to be even lower than that of 2018, despite the government’s earlier implausible forecasts.
Finance Minister Colm Imbert had projected an average of 3.8 billion cubic feet per day for the current fiscal year, but the actual production is 3.55 bcfd, almost 250bcfd less than anticipated.
This production shortfall is enough to fulfil all of Trinidad and Tobago’s electricity requirements daily.
To a large extent, the Central Bank had hinged a stabilising of the national economy on the 3.8 bcfd production.
And Imbert had bragged in his budget address that “significantly, natural gas production has continued (its) upward trend…”
The bank’s most recent monetary report stated that “economic activity could improve in the second half of 2019 if there is a normalisation of natural gas production following temporary disruptions at mid-year.”
The bank alluded to the 3.8 bcfd projection “aiding the rejuvenation of downstream refining and strengthening petrochemical production.”
But that forecasted production has turned out to be as fabled as several other economic analyses by Imbert and other senior government officials.
The reduced production and supply would surely continue to create deep anxieties at Atlantic LNG and Point Lisas plants, with direct and harmful effects on the economy.
Equally disturbing is that the decreased yields are taking place in spite of the commissioning of BPTT’s much-touted Angelin and DeNovo’s Iguana fields.
The Ministry of Finance acknowledged in its Review of the Economy that the decline in extraction from mature fields “outweighed the additional output from new sources.”
The rationalisation of operations by energy companies would continue into the new year, and there is no indication of how far-reaching the consequences of the depressed gas production would be.
No one – not even Imbert – would dare to project a turnaround in gas yields.
In addition, as the Central Bank noted, refinery operations at Pointe-a-Pierre have not yet restarted.
Rig operations are at a nine-year low.
In addition to gas, crude oil and LNG also had lower year-on-year performance, resulting in a 3.4 per cent reduced output for the sector in the first half of 2019.
The signs are becoming ever clearer that T&T’s bountiful energy days are behind us, and yet the Rowley administration has made no serious effort at diversifying the declining economy.
The Central Bank is hoping the current end-of-year commerce would provide an economic fillip and the government’s planned infrastructure projects would boost the construction sector.
But these ventures would provide only short-term and seasonal stirrings to a troubled and declining economy.
T&T has declined precipitously
The indications of the impact of the flagging economy are everywhere.
During the review period alone, supermarket sales fell by five per cent, while there were declines in food and drink, cement, auto sales and other consumables, the obvious result of reduced disposable income.
The vital manufacturing sector has seen a 2.6 per cent decline, which means there is a continued contraction in a vital industry that stimulates the economy through jobs and trade.
The decision of Unilever to whittle down its T&T operations and send home 285 workers did not feature in the latest Central Bank report.
Of note is that the multinational manufacturer took the decision in light of “a weak domestic economy and a challenging global environment.”
Manufacturers have repeatedly groused about the onerous taxation system, inefficient port operations, low productivity, bureaucratic public service, slow VAT returns and other pressing issues.
T&T has declined precipitously in international ease-of-doing business indices, and this has resulted in a total absence of direct foreign investments over the past four years.
Instead, there is an annual flight of an average of US $400 million to greener and investment-friendly destinations and $4.8 bn in cash sitting idly in bank accounts in TnT.
The Central Bank sums up the economic stagnation with the report that “activity declined in several sub-sectors, such as manufacturing and construction, while the distribution sub-sector was flat.”
The minor increase in inflation is attributable only to “restrained consumer demand”, meaning, of course, that joblessness and generally lower income have affected people’s purchasing power and there is absolutely no economic activity taking place.
There are also signposts of an anaemic economy, with sobering reviews from both the International Monetary Fund and World Bank.
Typical brazen manner
But, like Alice in Wonderland, Imbert termed his latest budget one of “stability, strength and growth.”
In his typical brazen manner, he boasted: “This administration has been leading a transformation effort to rebuild our economy.”
He crowed that his government had stabilised “a dangerously slipping country” and revitalised the economy “after years of economic stagnation.”
“I can see clearly now” he crowed.
The cold and distressing facts reveal the exact opposite.
But the grandiose and flawed reporting by Imbert and his colleagues belie a government believing its tall tales and not levelling with the country.
As long as the Rowley Government continues to live in a fool’s paradise, it would not begin the urgent and critical chore of restructuring the economy and saving Trinidad and Tobago from impending financial ruin.
The country would continue to endure poverty, business closures, increasing unemployment, capital flight, inability to afford health care, and other forms of hardship.
Trinidad and Tobago urgently need competent, innovative and visionary leadership with capacity and resolve to radically remake this rapidly worsening economy.
Imbert’s economic trickery, fictitious statistics and braggadocio will only serve to lead us to further economic failure, anguish and ruin with the ordinary ‘pumpkin and bhaji’ man-in-the-street, that he belittled in Parliament, struggling to put food on the table.
The natural gas disaster is the harsh reality of failed and incompetent leadership and a bitter a wake-up call for us all in Trinidad and Tobago.