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Onward into 2018

Published: 
Thursday, December 21, 2017

The economic pundits and soothsayers have all been singing the refrain that 2018 is likely to be a better year for the T&T economy than the last three years.

From the IMF, to the UN’s ECLAC, to the Central Bank—all have projected a rebound in economic growth (low single-digits) engineered on the back of increased output in the oil and gas sector (in no small measure through bpTT’s Juniper and TROC efforts).

Certainly this is good news. Be that as it may, though, one wonders if the experiences of the past three years have been sounded down and sufficiently embedded into the national consciousness.

In other words, as a country, have we felt enough pain—and for long enough—so as to not repeat the mistakes of the past when it comes to how wealth is created, distributed, and accounted for in T&T? Or is there a quiet sense that the gas will flow again, and the party will pick back up right where it left off?

Truthfully, at this juncture in our history, any income accrued from energy sector rents going forward should be strategically applied towards investments yielding long-term positive benefits. Summed up in one word: diversification.

In fact, there are twin issues that must be addressed going forward: reigniting growth that can sustain itself beyond the energy sector, and reducing the overall dependency syndrome fuelled by open-handed governments.

Note that only half of this problem is ascribed to the state sector. The private sector most certainly has its own role to play as well.

Any executive worth his salt will tell you, however, that achieving these bigger picture objectives is a by-product of getting the tiny—even imperceptible—steps right along the way.

Results, the “bread and butter” of the business world, are built of properly executed procedures and plans. T&T provides no shortage of opportunities to create a better “doing business” environment going forward.

To round out 2017, and look forward into 2018, there are perhaps five critical issues that warrant immediate attention, and certainly some redress if our country and economy are to progress.

1 Crime: Often times the focus tends to be on homicide, but for all intents and purposes, white-collar crime in this country runs rampant.

Bribery, corruption and other forms of “hand-greasing” have destroyed the legitimacy of what can be called “business” in a number of industries in T&T. The time for talk where this is concerned has long gone.

Much like what has taken place in Brazil with construction company Odebrecht, it is time to start making examples of wrongdoers.

2 State enterprises: Many of the companies in the state sector are a huge drain on the Treasury and are plainly unsustainable.

Even those that have real social benefits are in desperate need of restructuring. Frankly speaking, the government has no basis for being in business in industries that are best served by enterprising private sector players.

For sure this one will be a political hot-potato, but tough decisions must be made to ensure proper allocation of scarce fiscal capital.

3 Inter-island ferry situation: How serious about tourism are we as a country if citizens suffer more to move between islands than to travel to the United States? The situation on the sea bridge has grown beyond ridiculous, causing untold financial losses to the Tobago economy. Some long-term solution in 2018 is a must.

4 Foreign exchange: Not much else needs to be said about this situation as, in many ways, the forex crisis dominated a lot of the news cycle in 2017.

Both the Finance Minister and Prime Minister have focused their attention on the demand side for forex, asking locals to change their consumption habits. Surely these gentlemen realise that this is easier said than done and, in the absence of any incentivising mechanism, taste and preferences will continue as they have. Another political hot potato, but with reserves falling at a faster rate than they are being replenished, something may have to give in 2018.

5 Govt capital expenditure: No one doubts that the coffers of the State are constrained as the government seems to be confronting legitimate cash flow problems. That said, kick starting some form of capital expenditure programme to help stimulate economic activity should be a point of focus in 2018.

In budget speeches of the past, the finance minister laid out grand plans for road construction and other infrastructural development projects. Truthfully, restoring and building out the nation’s crumbling infrastructure is ideally where much of the government’s efforts should be.

While the list of issues could be extended beyond these five, getting these right provides a solid foundation for restoring confidence among citizens who, in many respects, feel the country has gone adrift.

That said, our outcomes as a country represent a tapestry of who we are as a collective, try as we might to deny it. Putting T&T back on a stable path will require all hands on deck in 2018.

Andre Worrell