PSA members, clad in black and green, had gathered on the Brian Lara Promenade to protest the 0-0-1 per cent increase Government offered them. Winston Dookeran can be criticised for acting too cool in the face of open contempt for his Government's offer. Truth is, Dookeran is "cool" about what's unfolding around him. The man, whose approach at rectifying the economy has been chastised by economists as being "conservative," is almost ambivalent to daily discontent.
"It's easy to stand on the outside and watch the picture. Doing it is another story," he shrugged. Lest his attitude be slammed as dismissive, Dookeran reasoned that union negotiations are a dynamic process. "I think this is the antics of the collective bargaining process which we have to go through. Also, what happens in the PSA sets the stage for other negotiations," he explained. PSA president Watson Duke has been adamant about the Government acceding to the union's demands. On the other hand, Dookeran is loathe to add another $3.2 billion annual expense to the country's recurrent expenditure. He believes the union, to which he's presented a report on the state of the economy, will comply with the Government's offer. "I think he (Duke) will become happy. As he begins to sink in what is possible, he will become happy."
Given the economy he's inherited, Dookeran said the PSA is just one cloud in his horizon. "I feel these noises are a natural consequence of a dynamic political system. In the end, they will arrive with a conclusion that is rational. My confidence grows from that." Dookeran's approach to the PSA is analogous to his approach to the economy. He's not daunted by the challenges.
He reasons that a policy has been put in place and the economy will eventually align. Dookeran's career has been in the business of managing economics and politics-while his affinity is for the former-he's given way to the latter. After the depression of the 1980s, Dookeran was part of the National Alliance for Reconstruction (NAR) team which set out a structured plan to put the country back on the path of economic growth.
"Everything happens in cycles. I've been here before. Don't think I learned all this is the last six months. So I recognise what has to be done to set a platform. The country went on to record 15 years of economic growth," he told the Business Guardian in an interview last week. When politics get in the way of prudent fiscal management, Dookeran's view is this: "For those of us who have had an economic tradition, recognise that economic logic does, in fact, dominate political thinking. So let the politician speak, but know that economic laws will prevail in the long run."
For this reason, he's kept in the background as he has set about transforming the country's financial architecture. In the past two weeks, he's addressed the American Chamber on his Government's way forward, announced a billion-dollar loan from the Inter-American Development Bank (IDB), conducted media interviews, addressed the Parliament on the Clico issue on Saturday morning and brought the Finance Bill to Parliament yesterday.
He acknowledged that his message, after weeks of silence, was not received as he'd intended, overshadowed by the media's attention to the revelations of the Strategic Intelligence Agency (SIA) by Prime Minister Kamla Persad-Bissessar. Nonetheless, he admitted to being relaxed as "half of my work has already been done." The Government, he explained, has adopted an approach similar to that of the NAR administration of 1986 to 1989-setting the right platform for economic growth. That structured approach to dealing with the economy was outlined in his budget of September 8. Unfortunately, the budget's stimulus fell flat as individuals were saving and the private sector wasn't investing.
Dookeran's next step was to secure financing. The Government swiftly secured a five-year (US)$1.3 billion loan from the IDB. Now that the plan and the money are in place, Dookeran is engaged in the execution. "In that sense, we have broken the back on the first round of putting the economy right. It will be a continuous process. In the midst of a turbulent financial situation, we are still able to see the light at the end of the tunnel." Central Bank Governor Ewart Williams has expressed a gloomy forecast for the economy: unless the private sector begins to invest, the economy can experience another year of economic stagnation. How then, to reconcile Dookeran's optimism with Williams' skepticism? "The Central Bank reports on what has happened in the past three months. They are reporting on the past and I am looking at the future."
Pushed to qualify that statement given that Governor Williams had projected two possible scenarios for the economy, Dookeran offered as further explanation: "My optimism is because I feel confident we have put a platform in place and we have reversed some of the trends which existed before. Some of the issues will be resolved." He's mindful, though, of the present state of affairs. "There is a sense of optimism, but not necessarily exuberance," he added. "I don't want to create a sense of false hope. While I am confident, I know there are a lot of issues to be resolved and hurdles to cross. Even with the best of intentions, we may not get to the high growth rates we've had in the past. If we could sustain it to 2.0 to 3.0 per cent for the next three to four years, that will be an achievement. It's that kind of optimism based on a more realistic assessment."
Photo: Central Bank.
He noted that even with the carefully laid plans for economic growth, there was a degree of risk involved. "My biggest concern is execution risk. By that I mean, we do not rise to the occasion of implementing as fast as I would like to see." Here's where he needs the support of the public servants with whom he'd like to settle wage negotiations by year's end. The latest Doing Business survey conducted by the World Bank reported that one of the major impediments of doing business in T&T was the bureaucracy involved. Minister of Public Administration Rudrawatee Nan Ramgoolam told the Business Guardian that her ministry was engaged in the process of bringing efficiency into the Public Service.
Despite the steps being taken to bring the country up to scratch, Dookeran is cognisant that two problems plague his plans: inflation and rising unemployment. He pointed out that inflation is falling, but still remains high. Inflation now stands at 13.2 per cent. "I've taken the choice at this time to promote growth. Even though it has an inflationary impact, which is what I think we need to straighten out first." Once the country achieves economic growth is achieved, Dookeran reckons it will have stem the country's rising unemployment. For the past year, 24,700 jobs have been lost. Unemployment has steadily increased: from its lowest point at 3.9 per cent in the fourth quarter of 2008 to its present 6.7 per cent; the highest it's been in three years. Most job losses are attributed to the country's construction sector, which is in decline.
The need to get stimulate construction, speeded the Government's approach to the IDB. The effect is to jumpstart the Public Sector Investment Programme (PSIP). Dookeran is firm that Clico policyholders will get what was passed in the budget: $75,000 upfront cash and 20 annual zero-interest bonds. Cabinet, he said, decided to set up a special window to deal with the credit unions, trade unions and educational institutions and it was working out the modality of that special window. While there is the possibility of a variance to the 20 years, Dookeran expects it to be minimal as the Government needs to control its debt. "The debt situation is within range. It is threatening. It is rising. Every fiscal deficit turns out into debt the next time around. Since we have to control the debt situation, to control the macroeconomic situation of the country, we have to have a programme over time to reduce the fiscal deficit."
Turning around the economy, he said, depends on the Government dealing with these issues as soon as possible. His intent is to inject liquidity into the system. His expectation is that people will begin to spend. He's committed himself to a tight timeframe of year's end. Once the clouds are cleared, the Government can get back to the work of turning the economy around, he reasoned. "I guess one can never say if the next year will turn out to be better than this year. A lot may not happen."