Ian Nar­ine

Next Mon­day is bud­get day in T&T. Every year the Min­is­ter of Fi­nance sets a theme for the bud­get. Over the past five years, they were as fol­lows:

2007: Vi­sion 2020: Mov­ing For­ward

2008: Shap­ing Our Fu­ture To­geth­er

2009: Vi­sion 2020: Strength­en­ing Ef­fi­cien­cy, Ad­dress­ing the Chal­lenges

2010:?Fac­ing the Is­sues: Turn­ing the Econ­o­my Around

2011: From Steady Foun­da­tion to Eco­nom­ic Trans­for­ma­tion

A re­view of the themes that were set, against the re­al­i­ty of the per­for­mance in the en­sur­ing year, should make it clear that our na­tion­al bud­gets for the past five years at least, span­ning three ad­min­is­tra­tions, have been lit­tle more than ad­ver­tis­ing brochures lead­ing to un­ful­filled promis­es. Since 2007 we have re­gressed rather than moved for­ward at least in eco­nom­ic terms. As op­posed to be­ing shaped, our fu­ture is now more un­cer­tain. We are less ef­fi­cient all round, but clear­ly in the face of CL Fi­nan­cial we have de­vel­oped ef­fi­cien­cies for skirt­ing the chal­lenges. The econ­o­my has not turned around and in 2012 lead­ing in­to our 50th year of In­de­pen­dence, we are still try­ing to craft pro­pos­als to trans­form in­to a sus­tain­able econ­o­my.

Maybe it is time our politi­cians take a sip from the cup of eco­nom­ic and po­lit­i­cal re­al­i­ty. What is need­ed right now is shared re­spon­si­bil­i­ty and sac­ri­fice where all in­ter­est groups recog­nise the re­al­i­ty of an eco­nom­ic slow­down and less than buoy­ant prospects and come to­geth­er to put T&T on a sounder eco­nom­ic foot­ing. "Shared Re­spon­si­bil­i­ty and Sac­ri­fice" should there­fore be the theme of the 2012 bud­get and any­thing out­side of that par­a­digm will once more be a path to un­ful­filled promis­es. In the wake of the Sec­tion 34 fi­as­co, where there are se­ri­ous ques­tions re­lat­ed to breach­es of trust and pub­lic con­fi­dence, cre­at­ing the en­abling en­vi­ron­ment for shared sac­ri­fice is go­ing to be a chal­lenge. Yet this is the task that is be­fore the Min­is­ter of Fi­nance as he de­liv­ers his first bud­get pro­pos­al and the third of the cur­rent ad­min­is­tra­tion.

Known is­sues

What is re­quired seems to be well un­der­stood, but not prop­er­ly im­ple­ment­ed. Last year, in the pre­am­ble to the 2011/12 pre­sen­ta­tion, then Fi­nance Min­is­ter Win­ston Dook­er­an of­fered the fol­low­ing ad­vice and so­lu­tions: "Some of our be­hav­iour­al pat­terns nur­tured over the past must shift. Un­sat­is­fac­to­ry lev­els of pro­duc­tiv­i­ty, in­sen­si­tive cus­tomer care, lack of com­pet­i­tive­ness, so­cial in­equity and lack of trans­paren­cy must be left be­hind. "We must hold our­selves ac­count­able as in­di­vid­u­als, as fam­i­lies, as in­sti­tu­tions, as civ­il so­ci­ety and as a gov­ern­ment. "Peo­ple must be held ac­count­able for the past reck­less­ness in our fi­nan­cial sec­tor and the harm they have caused to many vul­ner­a­ble peo­ple. "Peo­ple must take re­spon­si­bil­i­ty for their per­son­al in­vest­ments. Peo­ple must com­ply with reg­u­la­tions and tax laws.

We must ex­er­cise fis­cal re­spon­si­bil­i­ty. It is time to take re­spon­si­bil­i­ty for ad­her­ing to the rule of law."

Few can ar­gue with these pol­i­cy ob­jec­tives yet the irony is that T&T finds it­self one year lat­er faced with is­sues of trans­paren­cy, ac­count­abil­i­ty and re­spect for the rule of law. What seems to be lost is that shared sac­ri­fice is a process that must be en­gi­neered. This is where lead­er­ship is re­quired and a gov­ern­ment's job is to lead. It is time for pol­i­tics to take a back seat to ac­count­abil­i­ty and trans­paren­cy, for with­out these two in­gre­di­ents, there is no moral au­thor­i­ty to call for any type of sac­ri­fice by the na­tion­al com­mu­ni­ty.

Eq­ui­table tax­ing

Every year for the past three years, I have point­ed out that prop­er im­ple­men­ta­tion of the tax code is a key in­gre­di­ent in mov­ing this coun­try for­ward. This is not about new tax­es, but about en­sur­ing that what is owed is col­lect­ed. Re­cent­ly, one of the ma­jor ac­count­ing firms echoed a sim­i­lar call. Hope­ful­ly, this time the call will be heard. It was in Ju­ly 2010, I point­ed out that col­lect­ing all tax­es due "goes a long way to re­build­ing the rev­enue base and for the ma­jor­i­ty of cit­i­zens who were prop­er­ly con­tribut­ing to pay for the goods and ser­vices pro­vid­ed by the State this rep­re­sents a fair­ly pain­less ex­er­cise. "The col­lec­tion of VAT, the ac­tiv­i­ties of the self-em­ployed, pro­fes­sion­als, small and mi­cro en­ter­pris­es and, of course, cor­po­rate T&T should be bet­ter po­liced from a tax per­spec­tive in or­der to im­prove the lev­el of re­ceipts." It is in­con­ceiv­able that a gov­ern­ment can say to the work­ing-class that there are in­suf­fi­cient re­sources to as it re­lates to wage ne­go­ti­a­tions, yet not work to close the many tax loop­holes and ar­eas of non-com­pli­ance, es­pe­cial­ly in gam­ing tax­es, that ex­ist in the sys­tem.

Gen­er­al­ly speak­ing, all salaried work­ers pay their prop­er lev­el of tax­es and have been do­ing so for decades. Yet these are the ones who al­so face the brunt of high lev­els of in­fla­tion and the "fi­nan­cial re­pres­sion" that comes from a near-ze­ro rate of re­turn on sav­ings. Im­prov­ing the lev­els of tax col­lec­tions will go a long way to­wards demon­strat­ing the com­mit­ment to­wards a sense of shared re­spon­si­bil­i­ty across the in­come spec­trum as all that is due to the State is col­lect­ed with­out favour. An­oth­er way to en­gi­neer a sense of shared re­spon­si­bil­i­ty is to put the prop­er and nec­es­sary em­pha­sis on white-col­lar crime. Lock­ing down tra­di­tion­al hot spots while ig­nor­ing the mon­ey trail that sup­ports the crim­i­nal ac­tiv­i­ty sug­gests that on­ly one sec­tor of so­ci­ety is be­ing tar­get­ed.

I sug­gest the dis­band­ing of the un­em­ploy­ment re­lief pro­gramme (URP) and the re­turn of Cepep to the re­gion­al cor­po­ra­tion struc­ture. Tar­get un­em­ploy­ment re­lief funds and pay it di­rect­ly to the un­em­ployed for a pe­ri­od of at least a year with the ob­jec­tive that the un­em­ployed must seek em­ploy­ment dur­ing that time pe­ri­od. If the URP rep­re­sents a fo­cal point for gang ac­tiv­i­ty, then dis­band­ing URP rep­re­sents a cul­ture shift. To the ex­tent that polic­ing re­sources are freed up, then a fo­cus on white-col­lar crimes can rep­re­sent a clear sig­nal to the pop­u­la­tion that there is eq­ui­ty in the sys­tem and no one is above the law. These are the types of poli­cies that can en­gi­neer a sense of shared sac­ri­fice across the pop­u­la­tion.

Con­struc­tion stim­u­lus

Be­yond that, it is time that the Gov­ern­ment and politi­cians in gen­er­al, recog­nise that part of the role of prop­er gov­er­nance is to cede pow­er to the forces of the mar­ket. A mar­ket re­flects the col­lec­tive will of the peo­ple act­ing in their self-in­ter­est and this is far bet­ter at polic­ing out­comes than any politi­cian can ever ac­com­plish. How much of the 2013 bud­get is go­ing to be spent on con­struc­tion ac­tiv­i­ties de­signed to stim­u­late the econ­o­my? Is the in­tent on­ly to cre­ate a few short-term jobs? If we are seek­ing some­thing more sus­tain­able, then there must be trans­paren­cy and ac­count­abil­i­ty as­so­ci­at­ed with this stim­u­lus pack­age oth­er­wise there will be lit­tle to show in two years' time.

Con­trac­tors bid­ding for most projects should be re­quired to list on the T&T Stock Ex­change. This au­to­mat­i­cal­ly deals with is­sues of prop­er ac­count­ing, tax­es and es­tab­lish­es a reg­u­la­to­ry frame­work to gov­ern the ac­tiv­i­ties of said com­pa­nies bet­ter than any Uff rec­om­men­da­tions can ever ac­com­plish. Fur­ther, it al­lows the pub­lic to par­tic­i­pate in the wealth cre­at­ed from the award of these state con­tracts. In the 1970s the gov­ern­ment of the day man­dat­ed that banks and oth­er in­sti­tu­tions had to list their shares lo­cal­ly. To­day every cit­i­zen par­tic­i­pates in the re­turns gen­er­at­ed ei­ther di­rect­ly, via a mu­tu­al fund or through their pen­sion plan. If we are se­ri­ous about de­vel­op­ing this econ­o­my in a trans­par­ent man­ner then this is a "must have" mea­sure for 2013. How much of the un­told bil­lions spent on con­struc­tion and in­fra­struc­ture works over the past decade and more have re­sult­ed in gains that have gone to a se­lect few. Isn't this at the core of the Sec­tion 34 fi­as­co?

Ap­pre­ci­ate that these monies were spent with a promise of stim­u­lus and jobs. Im­ple­ment­ing a pro­pos­al such as this is a good way to sig­nal to the pop­u­la­tion "nev­er again". Even more far reach­ing should be a reg­is­trar avail­able to the pub­lic de­tail­ing all con­tracts that are award­ed by the state and its agen­cies. Here again, the mar­ket is giv­en the op­por­tu­ni­ty to scru­ti­nize and rep­re­sents a form of gov­er­nance that is both nec­es­sary and time­ly. On Mon­day, all will be re­vealed. Let's see if we con­tin­ue to op­er­ate with delu­sions of grandeur or we are pre­pared to get down to the re­al task of trans­par­ent and ac­count­able gov­er­nance.

Ian Nar­ine is a bro­ker reg­is­tered

with the Se­cu­ri­ties and

Ex­change Com­mis­sion.