DA­REECE PO­LO

Se­nior Re­porter

da­reece.po­lo@guardian.co.tt

For­mer min­is­ter in the Min­istry of Fi­nance Bri­an Man­ning is urg­ing Pub­lic Ser­vices As­so­ci­a­tion (PSA) pres­i­dent Fe­l­isha Thomas to re­sign if she can­not se­cure at least a 10 per cent wage in­crease for pub­lic sec­tor work­ers by Christ­mas.

His re­marks fol­low the PSA’s con­fir­ma­tion that it had re­ceived a for­mal wage of­fer cov­er­ing the 2014–2016 and 2017–2019 bar­gain­ing pe­ri­ods. The pro­pos­al marks the of­fi­cial start of long-de­layed ne­go­ti­a­tions for thou­sands of civ­il ser­vants.

The news has re­newed op­ti­mism among work­ers, but econ­o­mists warn that meet­ing such a com­mit­ment could place sig­nif­i­cant pres­sure on state fi­nances. Some an­a­lysts sug­gest the gov­ern­ment may need to in­crease bor­row­ing or draw from the Her­itage and Sta­bil­i­sa­tion Fund to cov­er the costs.

Al­though the wage ad­just­ment was not in­clud­ed in the 2025–2026 na­tion­al bud­get, econ­o­mist Dr Vanus James says a pay­out be­fore year-end is pos­si­ble if the ad­min­is­tra­tion re­cal­i­brates its fis­cal pri­or­i­ties.

“If the gov­ern­ment is go­ing to move ahead and meet these wage com­mit­ments, it faces a medi­um-term chal­lenge to find so­lu­tions,” James said. “Those chal­lenges gen­er­al­ly de­pend on favourable con­di­tions—high­er en­er­gy sec­tor prices and a res­o­lu­tion of the gas sup­ply sit­u­a­tion with Venezuela. If en­er­gy prices col­lapse or the gas is­sue is un­re­solved, then se­ri­ous eco­nom­ic chal­lenges will arise.”

James added that tra­di­tion­al deficit spend­ing could gen­er­ate short-term eco­nom­ic ac­tiv­i­ty, but bor­row­ing to fund wages pri­mar­i­ly stim­u­lates con­sump­tion rather than in­vest­ment, of­fer­ing on­ly a tem­po­rary boost.

“Work­ers and busi­ness own­ers may wel­come a short-term lift as it stim­u­lates de­mand and sup­ports re­tail and whole­sale sec­tors,” he said. “How­ev­er, most of this con­sump­tion re­lies on im­ports, which rais­es ques­tions about for­eign ex­change avail­abil­i­ty. Wages paid now will large­ly be spent on im­port­ed goods, and re­plen­ish­ing stocks could ex­pose the econ­o­my to a for­eign ex­change crunch.”

Econ­o­mist Dr In­dera Sage­wan agrees that the wage in­crease alone is not the cause of the coun­try’s broad­er eco­nom­ic chal­lenges, but she ac­knowl­edges it could stim­u­late ac­tiv­i­ty in a slug­gish econ­o­my.

“On one hand, the gov­ern­ment mak­ing such a size­able com­mit­ment rais­es ques­tions about where the mon­ey will come from and whether it in­creas­es in­debt­ed­ness,” she said. “On the oth­er hand, the econ­o­my is at a stand­still and needs an in­jec­tion of eco­nom­ic ac­tiv­i­ty. Pump­ing this kind of mon­ey in­to the sys­tem fu­els ex­pen­di­ture and trig­gers a mul­ti­pli­er ef­fect.”

Guardian Me­dia con­tact­ed Fi­nance Min­is­ter Dav­en­dranath Tan­coo to clar­i­fy how the in­crease would be fi­nanced and whether a Christ­mas pay­out was fea­si­ble, but he did not re­spond.