T&T debt portfolio

119

By VASANT BHARATH

Over the past few weeks, the Government has raked in multi-billion-dollar Covid-19-related loans from at least six pri­mary sources.

They in­clude Trinidad and Tobago’s rainy-day Heri­tage and Stabi­lisation Fund, Development Bank of Lat­in America, also known as CAF, World Bank and Inter-American Development Bank.
Finance Minister Colm Imbert has also sapped $500 million in liquidity from the local market.
Even further, Minister Imbert an­nounced, with great fanfare, a few days ago that a US $500 million bonds had been launched by Credit Suisse, at an interest-bearing rate sig­nificantly higher than the prevailing international market rates.
In a typical manner, he distorted the facts over the use of half of that sum concerning repayment of a previous bond.
Then he merely stated that the re­maining $250 million would be utilised to “support budgetary alloca­tions.”
Earlier this year the Minister also secured approval for lifting the HSF borrowing ceiling to up to $10 billion “in any given year, for budgetary sup­port…”
Information presented by the Min­ister in his recent mid-year budget review suggests that the recent total borrowings tally around TT $6 bil­lion.
But that does not appear to be the final figure.
It is difficult to aggregate the value of recent international and local loans because of his casual, almost haphaz­ard, reporting to the national commu­nity.
It is no easier to tabulate the spend­ing.
He talks glibly of seeking “financial assistance to address the unprecedent­ed financial demands of Covid-19” and the “increased demands for goods and services…”
He tells of funds assigned for long-outstanding tax refunds or social wel­fare assistance or to buffer the health sector – without detailing how much was allocated or disbursed.
There are no confirmed numbers of the people who got Salary Relief Grants or the vulnerable who received “food support” or the beneficiaries of food cards.
He did not report on the “guaranteed soft loan programme” to struggling small and medium-sized businesses, or support to the informal sector.
Completed applications are being processed, he simply told the nation.

Characteristic snooty manner

Then, in his characteristic snooty manner, Imbert concluded that “we are on a strong footing.
Apart from the absence of compre­hensive accounting on the total worth of the recent mass borrowings, appli­cable terms and conditions have also not been revealed.
There has also been no proper ex­planation of their disbursement.
Imbert has not explained why he slighted assigned Covid-19 loans from the International Monetary Fund, in favour of a CAF debt.
The nation has not been told of pro­curement procedures for purchases of multi-million-dollar pandemic-asso­ciated goods and services.
There is no assessment of the value of aid provided by commercial banks in the so-called bailout of clients, af­ter benefiting from a reduced reserve requirement and repo rate.
On a few occasions, the Govern­ment was challenged to probity, of­ficials were dismissive and authorita­tive.
In mid-May, Imbert said that $934 million in relief aid had been assigned to date, but added nonchalantly: “This is not an easily determinable figure.”
In Parliament, he snapped at “those… who seem obsessed with generating misinformation…”
There is no statutory reporting to the country from a government that rode into national office on a solemn promise of honesty in public affairs.
There are merely off-handed state­ments whenever Imbert or another Government official considers it pru­dent to address the media on the vital matter.
And that is even though T&T’s in­ternational debt portfolio has now topped $125 billion, our debt-to-GDP ratio is at a staggering level of well over 70%, and the current budget def­icit is at a historic high.
The emerging Grand Canyon of budget shortfalls could well get close to $20 billion.
The decline in credit ratings has been acknowledged by all stakehold­ers, including the Central Bank – but not Imbert.
He recently engaged in seman­tics, insisting that “our rating with Moody’s remains exactly where it was a year ago.”
The Central Bank, meanwhile, is agonising over “credit rating down­grades.”
The impending recession is disturb­ing enough, but with the economy in Imbert’s bungling hands, there is good cause to ring the alarm bells.
The current bleak health of the economy would compromise the qual­ity of life of our grand-children.

The country is plummeting into an unprecedented precipice

All reasonable financial analysts conclude that the country is plummet­ing into an unprecedented precipice, worsened by the collapse in energy prices.
But, ever in fool’s paradise, Imbert boasts that “our proactive approach” has saved T&T “much of the pain and distress that other countries face.”
He brags of the measures for “prior­ity expenditure, pub­lic health and safety measures” and “actions to protect vulnerable people and maintain household incomes.”
But he has not acknowledged the hardship being endured by the work­ing class and small business people, who are yet to receive assistance even as they have lost their jobs, their busi­nesses or their markets.
In contrast, the British Govern­ment convened virtual sittings of Parliament, responded to Opposition queries and proffered details on Co­vid-19 stimulus spending.
That administration has been open to expert advice.
Chancellor of the Exchequer Rishi Sunak explained all aspects of the package, and how they are aimed at assisting from the small man to en­trepreneurs.
Sunak acknowledged: “I know how worried people are, worried about their health, the health of their loved ones, their jobs, their income, their business, their financial secu­rity.”
Prime Minister Boris Johnson carefully answered Opposition Leader Keir Starmer’s penetrative questions.
As another example, Canadian Prime Minister Justin Trudeau gave a rollout of spending linked to Co­vid-19, including allocations to the tourism sector, which has essential­ly collapsed.

Comingling of taxpayers’ money and campaign finance of the rul­ing party

Circumstances are even more trou­bling in this general election sea­son, with the possible comingling of taxpayers’ money and campaign finance of the ruling party.
Evidence reveals that party opera­tives are being assigned hampers and other resources for allocation to pro­spective voters.
It leaves one to question how much more taxpayers’ money is being sur­reptitiously funnelled into the party’s re-election campaign?
In the manifest absence of account­ability with the public’s purse, how much is being chiselled off to buy votes?
This is a critical issue that must be publicly prosecuted by the Parliamen­tary Opposition and by civil society organisations and individuals com­mitted to good governance and free and fair elections.
The Government must be made to properly account for the huge funds in its hands amid an election season.