Since the granting of universal suffrage, T&T elections have revolved on personality and tribe. In more recent times critical development issues have been relegated to the sidelines. The 2020 campaign will not be different; the usual themes, corruption, race and the economy, have already been deployed with long-term survival issues trivialised. Yet since 1956, no one has been successfully prosecuted for corruption, or abuse of public office, despite a plethora of legislative changes; the Integrity in Public Life Act, Proceeds of Crime Act, FIU, a new Procurement Act (not fully proclaimed) to name a few.
Indeed, every election is preceded by announcements of new contracts to build new roads and resurface existing ones, new public housing etc, regardless of which party is in government. Elections have to be financed, I guess.
But infrastructural development, education, health care, and the national security apparatus also have to be paid for This week the Auditor General’s report shows the Consolidated Fund at an overdraft of $40.2 billion. Last week the full implication of “prudent” financial and economic management was on display. Helicopters that cost billions were “non-operational” due to lack of funding to provide adequate maintenance. The same for the Coast Guard fleet, the non-functioning radar system all of which are meant to operate in sync. So much for securing our borders. The same is true of the Tobago ferry maintenance. And this is the reason why the Couva hospital remains unopened.
There is not enough money to pay salaries and meet all the other commitments as well. Rather than hypothetical “savings” from expenditure curtailment, the Government has in effect borrowed from contractors, taxpayers (by not paying refunds) and even public servants by not paying increments that are due. The Finance Minister is in a bind; he has borrowed to fund recurrent expenditures (salaries and other operating cost) and has reached the point where he cannot raise taxes; to do so will chase investment away.
Hence the importance of a finding a “turnaround” even where we are only at a turning point. Government gets revenue by taxing the profits of successful businesses and the citizens that work in those corporations. That is why facilitating business and providing an enabling environment matter. If businesses (the energy sector corporations too) don’t grow, then government expenditures cannot grow. Borrowing is only a temporary measure as loans have to be repaid.
The dilemma facing the Government (the country) is that the country’s key economic assets are ageing and must work harder to maintain the revenue flows. T&T is a mature geological province. New oil and gas discoveries have been made elsewhere. The USA has now become an exporter of LNG and oil and new, more efficient petrochemical plants are being built which make them more competitive, and therefore more profitable that those in T&T. The majority of T&T's petrochemical plants were built in the late 70s or early 80s, apart from the new Mitsubishi plant making these plants 30-40 years old. ALNG’s Train 1 is over 20 years old and was to be refurbished later this year. And gas is no longer cheap to produce and even maintaining output is challenging as BPTT’s recent announcement so amply demonstrated.
The closure/restructuring of Petrotrin and the lack of financial and technical capacity to undertake new investment adds to the complexity which would face any government. Even if joint venture partners are found to make these new entities function more efficiently, it will require a five-seven-year turnaround exercise before any gains can be realised. Remember, the steel plant and two petrochemical plants remain idle.
T&T is in a very challenging situation and does not have the luxury of carrying on business as usual, waiting for energy prices to rebound. Even if prices increase this will only give a short-term gain. The country must find additional export activities to move forward. This is a change moment and requires a new approach and economic reform. But economic reforms are more likely to fail or even be reversed, unless they are understood, believed, and accepted by those whom they affect. Communication is important but can never be a substitute for good policies.
The country cannot afford a Toco Port, or a Drydock or a Sandals hotel without an independent feasibility study which establishes a viable business case. Where are the incentives to increase exploration, to build an energy services sector to service the world not merely T&T? The real resource of a country is its people, their skills and aptitudes, training levels and the determination to address the challenges the world order sets us. Yet last week, the Finance Minister indicated that he will again ignore the NIB Actuarial reports recommendations which have been repeated for the last six years.
The blame game is unproductive as each side can inflame the base against the other side’s iniquities with no focus on the systemic changes that must be adopted. “Show trials” and other gladiatorial games achieve nothing. Corruption must be dealt with by changing the system to measure outcomes and hold people accountable. The cynicism that passes for leadership cannot achieve progress. Policies, plans, and programmes, complimented by patient and consistent follow through, matter.