University of the West Indies (UWI) economist Dr Roger Hosein says is not unreasonable for Government to seek international financing, given the state of T&T's economy.
"Given that the economy is in a recession there are several approaches to help stimulate economic activity, one of which involves the simultaneous stimulation of both aggregate demand and aggregate supply. In this regard, the intention of borrowing US$1 billion on the international market place is not unreasonable," he said in emailed responses to questions from the T&T Guardian.
He was commenting on Finance Minister Colm Imbert's announcemernt that he will be going to the United States next month to raise US$1 billion on the international market.
Hosein wondered how the money will be used: "What we need to be clear about is what is the purpose of these borrowed resources. Is it to help jump start the economy by way of a capital project such as completing the Point Fortin to San Fernando highway? If that is the case, then this has some merit as it would stimulate the supply capacity of the economy and help to unlock resources either unemployed or underemployed, whilst at the same time increasing both direct and indirect employment in the construction sector."
Noting that even if the money is not from the IMF, there could be burdensome conditions, Hosein asked: "If the resources are to be borrowed, can the Caribbean Development Bank (CDB) lend this amount, or is it the IMF and or World Bank we will have to visit? Will the US$1 billion borrowed resources come with a structural adjustment programme?"
Economist Dr Ronald Ramkisson said Government had the ability to raise the money but in the long term had to implement sustainable policies for less borrowing and more generation of foreign currency.
"Compared to its peers, T&T has many advantages to raise international funding. Foreign borrowing is only part of the solution. The question is how will T&T be able to pay that back in the long run," he said.
Ramkissoon said T&T needs to live within its means as the price of oil will not be rising significantly any time soon.
"We need to move the population to domestically produced goods and services. We need to diversify the sources of foreign exchange," he said.
At Thursday's post-Cabinet media briefing, Imbert said he will be doing roadshows in Los Angeles, Boston and Chicago next month to the financing that is needed to carry T&T through the rest of 2016 and into 2017. He said the objective is to strengthen foreign reserves and deal with cash flows.
A team of Ministry of Finance and Central Bank officials would make presentations to banks in the United States, the minister said.