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The Parable of talent
Last weekend, Christian churches celebrated the feast of Pentecost or coming of the spirit. The word spirit is often associated with wisdom. Reflecting on that and perhaps moved by the spirit, I thought of the “Parable of the Talents” and its application to T&T.
Matthew 25:14-30 tells of a master who was leaving his house to travel and entrusted his property to his servants.
According to the abilities of each man, one servant received five talents, the second servant received two talents, and the third servant received one talent. The property entrusted to the three servants was worth 8 talents (a talent was a significant amount of money).
Upon returning home, after a long absence, the master asked his three servants for an account of the talents he entrusted to them. The first and the second servants explained that they each put their talents to work and had doubled the value of the property with which they were entrusted; each servant was rewarded. The third servant, however, had merely hidden his talent, burying it in the ground, and was punished by his master.
Government is about stewardship and accounting for the resources (talents) with which it has been entrusted. It must identify improvements which have resulted from conscious actions, much like the servants in the parable. The parable indicates the importance of a measurable scorecard with which to evaluate the performance of any administration in listing its achievements. Some initiatives take time to bear fruit and straddle administrations.
The IMF, S&P, Moody’s and the EIU all expect a modest improvement in economic growth in 2018 through 2022 on the strength of the expansion in gas supplies occasioned by increased drilling activity and investment at the well head.
All this in response to incentives given in 2014. It is significant that 2017 was a year of decline and that the IMF cut its growth forecast for 2018 by 90%, from 1.9% to .2%. Notwithstanding, the improved gas output projected to 2022, the IMF still forecasts continued declines in foreign exchange reserves declining to US$6 billion by 2022. This is a crucial statistic that should be used as a yardstick by itself.
Further, each organisation projects continuing fiscal deficits (expenditure greater than revenue) through 2021.
The construction initiatives included in the last three budget speeches have not borne fruit, nor can they revive the economy in time for the elections which will take place between now and 2020.
In that context, the MOUs announced during the Prime Minister’s visit to China take on special significance, as they are mainly construction related projects. No doubt they will come with Chinese financing with a promise for local content and technology transfer.
But construction activity and asset acquisition generate high demand for foreign exchange. The knock-on effect of expanded local demand and the need to repay the foreign financing, which will naturally follow these new projects, will reduce the foreign exchange reserves as they are not export generating.
We can, therefore, expect an increase in economic activity in the run-up to the 2020 election largely associated with construction. But this has no self-sustaining dynamic and has explicit and implicit negative foreign exchange effects. Foreign debts must be repaid.
This brings us back to the issue of long-term sustainability and non-energy growth. The growth in manufacturing projected by the Finance Minister is associated with output improvements in the petrochemical sector. But every other sector, non-energy manufacturing, yachting, the creative arts et al continue to decline.
To glibly speak of prudent management, turnaround, booming conditions is reckless folly. The management situation at all the state enterprises, including Petrotrin, is now made more difficult since the Government has changed the conversation.
The gas sector, therefore, remains the only credible source of growth. But increasing the output of gas in the long term is problematical. The GORTT cultivated a more significant relationship with Venezuela to access its gas reserves, even to the extent of compromising our foreign policy. But obtaining Venezuela’s gas became more remote and complicated when the US decided to impose sanctions on Venezuela on May 21st.
Currently, sanctions restrict commerce with energy, banking and other sectors by US citizens or corporations.
The probability that sanctions could be extended to any or all businesses that trade with or invest in Venezuela has increased the riskiness of the Venezuela gas initiative to all concerned.
We need an enlightened approach to determine policies to treat with what is obviously a deteriorating situation in Venezuela. We need to have a policy framework that will reconcile, inter alia, non-intervention and non-interference, energy diplomacy, humanitarian assistance, and critically, an immigration plan.
The parable of the talents is a story of measurable success as distinct from the political rhetoric which appeals to our basic instincts of fear and race.
Can we show that crime is reduced; social spending is better targeted; the Public Service more efficient; business is easier to do; health care is improved and the education system is producing more learned graduates? Even the Bible recognises the importance of leadership and management and measurable outcomes.
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