The following should interest our Minister of Finance, Winston Dookeran, and his cohorts as much as our Governor of the Central Bank, Ewart Williams, who are even now wallowing in despair over the economic future of our country and seeking ways to find money to meet legitimate demands of long-suffering workers who have had their incomes constantly eroded for decades through no fault of their own. As I write, vital institutions in the nation are cracking at the seams and we are heading toward a state of anarchy that is poised to replace the horrors of galloping crime and murder. Even as we conduct the belated enquiry into the events of 1990, just after the nation had embraced "One Love" ecstatically, we are seeing an ominous gathering of clouds in which dismayed government supporters, who had enthusiastically voted in the coalition of parties, are now completely disenchanted with the failure to accomplish meaningful change when so much was expected.
The intractability of the economic problems does not mitigate the feeling of betrayal and increasingly we are seeing the Government being tested in its will by open lawlessness expected to be tolerated in its economic failure. The nation has indeed suffered more than enough at the uncaring hands of predecessor governments and the present Government and its supporters are expecting the same degree of tolerance which the violated public gave to the PNM. Such tolerance will prod no creative thinking. Necessity is the mother of invention. The expectation of the Government is that the people should be reasonable and willing to give it time to solve the financial dilem-ma, because of its complexity. This is because the Government actually sees the financial and economic challenges as indeed monstrously large and requiring years of further sacrifice.
The T&T ship of state is taking water and citizens are being called upon to be patriotic and collectively start bailing it out. Who can deny the reasonableness of this appeal? Our Finance Minister and cohorts, our Central Bank Governor and our entire cadre of professional economists are all in agreement that we need concerted effort, self-sacrifice and belt-tightening, combined with a change of economic targets aimed at reducing our dependency on oil, to see us through these lean years. During which time well-paid ministers and officials innocently enjoying the perks of office with emoluments decided by the arms-length SRC are telling all government employees that they must accept an obscene five per cent salary increase after years of double-digit inflation and serial depreciation of our currency that has made mountainous debt an inescapable way of life. Additionally, business opportunities are being reduced, throwing many on the breadline from looming closures.
Our trade unions, Police Service, prison officers, security forces and all essential government employees are refusing to appreciate the predicament of the Government. The sacrifices are simply too much. The PM sombrely appealing to patriotic understanding and loyalty, expecting quiet respect for law, cannot stem the tide of violent protest in full-blown anarchy. Now that we have arrived at this dangerous juncture, perhaps the administration will consider that the complicated economic para-digm with complex solutions and long-term agendas (that may yet fail) being pursued should be reviewed in a very simple set of measures that can be implemented close to home effectively and without fanfare. First of all, present cash shortage, necessitating an intractable negotiating position against trade union demands by following the route of present monetary policy, rather than be resolved will only see an exacerbation of the problems, ending in civil conflict.
The silver bullet that will resolve the present diminishing value of our currency, which is at the heart of increased cost of living and decreased buying power, is to delink the TT dollar from the purposefully depreciating US dollar and to link it with a basket of currencies, if not with a single strong currency as had been the case when we were tied to the pound sterling. The diminishing value of the US dollar is clearly reflected in the continuing rise in gold prices (up 100 per cent from my Senate arguments two years ago), which is increasing only partially from market demands and more from designated currency devaluation. I have repeatedly recommended converting our Heritage and Stabilisation Fund (HSF) to bullion holdings, at least in part, and disregard of this has resulted in our having lost much of our HSF value since.
The US and China are in a currency war of attrition to improve respective exports and we are sandwiched with ever-increasing import costs and inflation. Attaching our currency alternatively will see an arrest of its current slide and a continuing real increase over time, reducing cost of living across the board.
We may also simultaneously increase our authorised money supply and pay outstanding debt arrears with negotiable bonds carrying a short-term moratorium for encashment. Our banking liquidity position makes all of this eminently feasible. There is no reason why those who labour should continue to suffer financial deprivation because of ill-conceived financial policies. There are additional measures that can be taken to enhance our economic growth, but enough for now.
MF Rahman
Via e-mail