JavaScript is disabled in your web browser or browser is too old to support JavaScript. Today almost all web pages contain JavaScript, a scripting programming language that runs on visitor's web browser. It makes web pages functional for specific purposes and if disabled for some reason, the content or the functionality of the web page can be limited or unavailable.

Thursday, July 24, 2025

'Watch the public debt'

by

20100911

This is the warn­ing be­ing sound­ed by econ­o­mist Dhanesh­war Ma­habir who said Fi­nance Min­is­ter Win­ston Dook­er­an failed to cap the es­ca­lat­ing debt in his 2010/2011 bud­get pack­age. Ma­habir said while the coun­try rev­enue ex­ceed­ed ex­pec­ta­tions, gov­ern­ment moves to in­crease ex­pen­di­ture could pose a chal­lenge. "His col­lec­tion rate im­proved giv­en that some $41 bil­lion was col­lect­ed, how­ev­er, he has in­creased the lev­el of ex­pen­di­ture and un­less he is able to fill this gap he would have to make some ad­just­ments for the next bud­get. The min­is­ter would have to come to a bal­ance very soon giv­en that he can­not con­tin­ue bor­row­ing for the next five years, es­ca­lat­ing the lev­el of pub­lic debt and ty­ing his own hands with out­stand­ing in­ter­est pay­ments."

Debt trap loom­ing

From all in­di­ca­tions Ma­habir said the red flags were up and Dook­er­an needs to tread cau­tious­ly. "He is not look­ing at the debt trap. The debt trap is go­ing to oc­cur when he has to pay so much in­ter­est on that debt and the bulk of his tax rev­enues would sim­ply go to debt ser­vic­ing and very lit­tle would be avail­able for the es­sen­tial needs he would want to sat­is­fy the pop­u­la­tion. He is not as cau­tious of the pub­lic debt as he ought to be. He needs to give him­self a tar­get of the amount of tax rev­enues he would like to see al­lo­cat­ed to the pub­lic debt."

Cut back spend­ing

Re­it­er­at­ing that the coun­try's debt is at its lim­it, Ma­habir said Dook­er­an need­ed to seal the cap now. "The min­is­ter has reached the lim­it of debt and needs to cap it now giv­en that 10 per cent of gov­ern­ment rev­enue is al­lo­cat­ed to in­ter­est pay­ments. He has to be cau­tious with re­spect to bor­row­ing over the next three years. If in fact the econ­o­my stag­nates, even though he pro­vid­ed ma­jor con­ces­sions to oil com­pa­nies, he must be mind­ful that con­ces­sions do not cre­ate out­put, it is the wells. The min­is­ter has to take cog­nizance of the fact that the lev­el of spend­ing for fis­cal 2011 may not be sus­tain­able. He has to be look­ing at economies and ef­fi­cien­cies and ar­eas which he would want to scale back and ar­eas he may want to pro­vide some kind of ra­tio­nal­i­sa­tion for." (AGS)


Related articles

Sponsored

Weather

PORT OF SPAIN WEATHER

Sponsored