With the economy under siege from falling revenues, the Government has already signalled its intention to curb its spending. In an address to the nation at the end of last year, Prime Minister Dr Keith Rowley said that state enterprises and ministries have been mandated to cut spending by seven per cent by the end of this month.
As citizens, various calls have been made to tighten our belts and do some cost cutting. But for many in this country, the period from Boxing Day to Ash Wednesday is Carnival time and the reality is that the revelry is in our DNA. Cutting out the cost of Carnival at a personal level is just not on the cards.
Jane* is one such person. Annually, she goes to several all-inclusive fetes and plays with one of the more popular mas bands in Port-of-Spain. Her costume is in excess of $6,000. Fete tickets are between $1,200 and $1,500. Then there is hair and makeup, and because many of the same people go to the same all-inclusive fetes that Jane frequents, that means she has to get a new outfit for each fete.
How does she cover the cost?
Well, Jane said that every year she takes a loan to the value of $15,000 which she has to pay monthly to finance her Carnival tastes. Her friends do the same because "obviously you don't play mas or go to a fete alone. You want to have a good time, so we go as a group."
The loan of $15,000 is sometimes not enough and she dips into salary or savings to ensure she is well outfitted, because "we have to get shoes for every outfit. We have to look good."
Jane and her friends go to five all-inclusive fetes annually. For one person, that is between $6,000 and $7,500 depending on the fete they choose to go to.
They spend about $4,000 on outfits, hair, makeup and shoes.
The costume costs $6,000. The total bill for their Carnival revelry costs each one of them between $16,000 and $17,500.
Granted it's money on loan and they pay back monthly, but the reality is there are other bills to pay.
Jane is one of the lucky ones. Her salary is over $10,000, and she does not pay rent.
But her weekly grocery bill is $900, that works out to $3,600 a month and sometimes it is a little more. She is also paying for a car. She admitted that if her grocery bill increases because of the new VAT measures she would have to cut back on some items. But she still has to work out where those cut backs will be.
Jane said she has friends who are not as lucky. While Jane's job is secure, she said some of her friends are afraid they will be laid off because of the economic downturn.
They also pay rent and are concerned that their bills will increase. They fear rent could go up because of the re-introduction of land and building taxes. They are also worried that their grocery bills may also go up because some items that were zero rated may now incur the 12.5 per cent VAT.
So, how are they planning to cut back?
Jane said they have decided this year to not play in their regular mas band. They have chosen, instead, to play in a less-popular band but there they will be paying a quarter of what they would normally pay for a costume.
She admitted, "We will not get all the things we are accustomed to–the drinks and food–but we don't drink much anyway. The idea is: we will all be together having a good time."
They still intend to go to one all-inclusive fete, but will patronise some of the low-end fetes which don't require a big spend on outfits, shoes, hair and make-up.
Personal sacrifices will have to be made during the year. Less spending on new clothes, shoes, Friday evening limes with friends and luxury items. But Jane said she is no "big spender and does not squander" so cutting back will be easy for her. Her friends also have some personal choices to make.
Economist Indera Sagewan-Alli told the GML Enterprise Desk that these tough economic times call for significant introspection and a relook at where we, as citizens, can cut back.
Your grocery bill, for example, Sagewan-Alli said: "Replace a lot of things which are processed and high value adding with things you can make yourself. Start a kitchen garden, produce things yourself once you have the time.
"Also, look at utilities–water and electricity–and how you use them. Cutback where you can. Look at how many lights you keep on. The use of air condition units, do you really need them on all the time?"
Small reductions in bills, the economist said, will add up.
She is also advising that we may want to look at our entertainment bill.
"Look at how much you spend on movies, eating out for the week," she said, "if you have to dine out you may want to consider spending the money where it stays in the country, eat at a local restaurant as opposed to an international franchise."
Sagewan-Alli also said citizens could consider carpooling. "Spread the cost, you and a friend or a neighbour could share the cost by carpooling if you going in the same direction. Do not do long trips unnecessarily."
She is also advising that you may want to put off a decision to change your vehicle.
It's really a chicken and egg situation, she said, because when "demand contracts, the economic situation could worsen."
Sagewan-Alli advises, "As a nation, we have a collective responsibility. Business organisations need to redirect production, reshape the structure of production and demand to ensure it is stimulating the economy and keeping the economy going.
"Also, the Government needs to be doing its part to instil confidence but that is not happening. There are significant opportunities in times like these. One such opportunity is growing the agricultural sector because we cannot continue to import as we have and the sector cannot do it on its own."
Using Oman as an example, she said that oil producing nation is formulating a long-term strategy to reduce its dependence on oil from 40 per cent to 22 per cent. The plan involves diversification of the economy. "It is something we have long spoken about but continue to fail to do."
In light of the necessity now to feed ourselves, she said, the State must consider how to stimulate the agriculture sector, "whether by mega-farms or small-scale farming cooperatives. We need to decide what we need to produce. What are the products which we can produce for export? The investment needs to be of such to ensure long-term sustainability."