The Government’s move to finally grant approval to the Tobago House of Assembly (THA) to borrow money on the local market to finance Tobago’s development is “satisfactory” says economist Dr Vanus James.
James was reacting to Finance Minister Colm Imbert’s 2019 Mid-year Budget Review, in Parliament on Monday, that the THA will soon be given permission to borrow.
“I intend to grant approval in the very near future to the Tobago House of Assembly to raise loan financing on the local market in the sum of $300 million for a number of development projects, including health and sporting facilities, housing, roads and bridges, coastal protection and the THA’s innovative “Intelligent Island” ICT project,” Imbert said.
James said he was “satisfied” by the Government’s decision to “finally allow the THA to borrow... as the THA has the right to do so.”
However, James had reservations about how the Government arrived at the total amount of funds earmarked for borrowing.
“There is a standard ratio of your deficit being about three to five per cent of the deficit of the output — GDP (Gross Domestic Product) and the overall debt not to exceed 60 per cent of the GDP...in the absence of the GDP you cannot assess whether the $300 million is a prudential limit or not,” the economist said.
He said the THA does not follow the United Nation’s rules when it calculates the island’s GDP.
James also questioned the strategy behind the kinds of projects proposed for financing.
“What is the fundamental purpose of borrowing? How are the parts of the project of the strategy for developing Tobago as a focal point for non-energy development? How are these projects contributing to Tobago’s overall development and are they part of the country’s 2030 vision?” James asked.
He said Tobago has the “best potential to be the focal point for non-energy development in the country” and noted that “the projects we are borrowing for must make a significant contribution to that thrust.”
He said while he understood the Government’s plan to assist in Tobago’s development, the THA also must define its strategy for the island.
“We need to get from the THA its overall plan to reposition Tobago within the context of the development initiatives and the Government’s 2030 plan. If you look at Vision 2030, you can’t see that plan,” James said.
He said this is evident as the expansion of the Arthur NR Robinson International Airport is spearheaded by the Government.
“It should really be the THA hand in hand with the Government on the expansion project, not it being spearheaded by Trinidad,” the economist said.