AmCham to meet with Finance Minister over budget deficit

As issues about how the T&T economy should be kickstarted, what large projects should deployed and which programmes are sustainable, Hugh Howard, president of the American Chamber of Commerce (AmCham), spoke to the Business Guardian about its views. Howard was interviewed following last week’s launch of AmCham’s 16th annual Health, Safety, Security and Environment (HSSE) conference, at the Hyatt Regency Trinidad hotel, Port-of-Spain. 

AmCham has submitted proposals to the Ministry of Finance about the 2012/2013 budget, and is due to have further discussions with ministry officials and Finance Minister Larry Howai. “We are looking at the fact that we cannot continue with deficit budgeting over an extended period of time.” Howard contended that nothing is wrong if borrowing is done on a short-term basis, if its purpose is to “kickstart the economy to ensure that we do not go into recession.” Howard was clear about one thing: there must be returns on money borrowed. 

 

 

“When you do that, (borrow money) you have to align that with the returns that you would be getting from the investment and the expenditure.”   Another concern Howard has is borrowing from such lending agencies as the International Monetary Fund. “How much would you borrow internationally, which has implications for foreign reserve because you are going to be paying that out of your foreign reserve.” If there are no other alternatives to borrowing, Howard said there is need to strike a balance between external and domestic borrowing. “Try to strike a balance between your external borrowing and national borrowing. You also try to ensure when you are borrowing, you do not borrow at such a high cost that in servicing that loan, you are creating greater economic problems for your country.” Though there is turbulence in global economies, the turbulence gives an opportunity to “bring out the best, where the strong will survive.” “When things are easy and money is flowing, people become complacent, you have a lack of accountability. There’s no question about value for money because you believe that the money is going to be flowing.

 

 

“When you are faced with challenges, that’s the time you become inventive, you become critical, you become analytical,” Howard said. “If you do those things, then you can steer yourself out of the turbulent waters.” On July 17, newly-appointed Central Bank Governor Jwala Rambarran received his instruments of appointment. Commenting on Rambarran’s new job, Howard said, “The gentleman has had some experience in financial services over the years. He worked at the Central Bank. I guess he would have some idea as to how the institution functions. “I believe that once he goes into the job without any hard preconceived ideas and adopts the position: let me discuss, let me collaborate, I think an important aspect and challenge would be how he can work along with the Minister of Finance because there has to be a balance between fiscal and monetary policies but, at the same time, bearing in mind that the Central Bank, they are independent,” Howard said.

“It is going to be a matter of a kind of maturity and analysis that he brings to the table. I don’t think it would be prudent or even fair to second guess or be critical about the gentleman before we see what he can produce.”