Against the back­drop of cur­rent low en­er­gy prices and a dis­mal fis­cal pro­jec­tion, Prime Min­is­ter Dr Kei­th Row­ley's first ad­dress to the na­tion held a few glim­mers of hope.

In his al­most 30 minute de­liv­ery, Row­ley touched on the pre­vi­ous gov­ern­ment's fi­nan­cial fail­ings, but quick­ly moved on to his Gov­ern­ment's in­tend­ed plan of ac­tion.

One of those plans is to split the bil­lion dol­lar Her­itage and Sta­bil­sa­tion Fund in­to two "dis­tinct parts" and utilise one por­tion of it.

"We in­tend to leave the bulk of the ex­ist­ing fund in the Her­itage com­po­nent and al­lo­cate the re­main­der to the Sta­bil­i­sa­tion Fund. We in­tend to use ap­prox­i­mate­ly US$1.0 bil­lion for sta­bil­i­sa­tion pur­pos­es in FY 2016 and per­haps an­oth­er US$0.5 bil­lion in FY 2017," Row­ley said.

While the HSF re­mained un­touched for years, Row­ley said it was be­ing saved for this rainy day.

"The cir­cum­stances we now face are pre­cise­ly those which were en­vis­aged for the use of the Sta­bil­i­sa­tion Fund and we will utilise it rather than in­crease the coun­try's debt lev­els un­nec­es­sar­i­ly," he said.

An­oth­er key com­po­nent of the plan mov­ing for­ward is to keep T&T away from the In­ter­na­tion­al Mon­e­tary Fund (IMF) and a promise to ramp up home con­struc­tion through a part­ner­ship with the pri­vate sec­tor. Row­ley out­lined a merg­er be­tween the Trinidad and To­ba­go Mort­gage Fi­nance and the Home Mort­gage Bank to help pro­vide fi­nanc­ing for new home own­ers.

"We will en­cour­age hous­ing con­struc­tion by the pri­vate sec­tor and si­mul­ta­ne­ous­ly, we will ac­cel­er­ate the im­ple­men­ta­tion of the Trinidad and To­ba­go Mort­gage Bank through the merg­er of the TTMF and the Home Mort­gage Bank to pro­vide the fi­nanc­ing for the mort­gages for those new home­own­ers," he said.

Row­ley said ac­cess to the pri­vate sec­tor in the con­struc­tion in­dus­try would save Gov­ern­ment ini­tial cap­i­tal in­vest­ment in the hous­ing sec­tor.

"The ob­jec­tive here is to quick­ly move pri­vate cap­i­tal in­to the hous­ing mar­ket to ser­vice a sec­tor which forms the HDC client base with­out ini­tial state cash out­lay. The pri­vate de­vel­op­ers should be mo­ti­vat­ed to get in­to the pro­gramme bring­ing fi­nance in the ex­pec­ta­tion of a bet­ter re­turn on cap­i­tal than is eas­i­ly avail­able else­where and the state would get the job done whilst stim­u­lat­ing the econ­o­my with­out too much up-front cap­i­tal com­ing from the state," Row­ley said.

It will al­so help with job cre­ation.

"New home con­struc­tion and build­ing main­te­nance will sus­tain em­ploy­ment of plumbers, car­pen­ters, ma­sons and elec­tri­cians," he said.

He said un­em­ploy­ment re­lief pro­grammes, like CEPEP, were ex­pect­ed to con­tin­ue, but with an ex­pand­ed range. He said those pro­grammes would have to be ex­am­ined to elim­i­nate cor­rup­tion and make them more ef­fi­cient and ef­fec­tive.

"The Min­istries of Lo­cal Gov­ern­ment and Rur­al De­vel­op­ment, Ur­ban De­vel­op­ment, Works and Agri­cul­ture will have a de­ter­min­ing role in some of the projects to which this ex­pen­di­ture can be tar­get­ed with a de­cent ra­tio be­tween ma­te­r­i­al and labour," he said.

Those min­istries will have to ac­com­plish that with a sev­en per cent ad­just­ment to their re­spec­tive op­er­at­ing ex­pens­es.

"The Min­is­ter of Fi­nance will di­rect the man­age­ment of every state en­ter­prise, statu­to­ry body and each Min­istry and the To­ba­go House of As­sem­bly to re­view their op­er­a­tions and make iden­ti­fi­able ad­just­ments of sev­en per cent re­duc­tion in pro­posed op­er­at­ing ex­pens­es, elim­i­nat­ing waste and/or in­ef­fi­cien­cies, not re­lat­ing to job cuts at this in­stance," Row­ley said.

Greater role for cen­tral bank

The Prime Min­is­ter out­lined a spe­cif­ic watch­dog role for the Cen­tral Bank, in light of its "re­newed con­fi­dence".

The Cen­tral Bank...will work close­ly with the Min­istry of Fi­nance to en­sure that fis­cal, mon­e­tary and ex­change rate poli­cies are aligned through ef­fec­tive co­op­er­a­tion and col­lab­o­ra­tion be­tween the Cen­tral Bank and the Min­istry, and will ad­just these poli­cies as they deem ap­pro­pri­ate," he said.

Spend­ing less forex

The Prime Min­is­ter is al­so urg­ing the na­tion to con­serve its use of for­eign ex­change.

He said the Gov­ern­ment planned to con­tin­ue mak­ing in­vest­ments and even pro­ject­ed an in­crease in that in­vest­ment ac­tiv­i­ty.

"Es­pe­cial­ly where there is greater in­cen­tive to earn for­eign ex­change. Our ex­porters of man­u­fac­tures and ser­vices should con­tin­ue to do as well or bet­ter dur­ing the pe­ri­od of ad­just­ment, and some of those busi­ness­es may even in­crease em­ploy­ment," he said.

Row­ley said T&T has "al­ready used up al­most US$2 bil­lion of our for­eign ex­change re­serves in 2015" and laid most of that re­spon­si­bil­i­ty at the door of the Cen­tral Bank.

"Un­for­tu­nate­ly, the Cen­tral Bank saw it fit to make for­eign ex­change cheap­er in the face of falling ex­port earn­ings and re­duced in­flows of for­eign ex­change and al­so opened up new chan­nels for out­flows of for­eign ex­change oth­er than the tra­di­tion­al chan­nels through the com­mer­cial banks," he said.

Row­ley said that in ad­di­tion to that, "Gov­ern­ment ex­pen­di­ture con­tin­ued un­abat­ed and even ac­cel­er­at­ed in the run up to the Gen­er­al Elec­tion, thus fu­el­ing even greater de­mand for for­eign ex­change in a pe­ri­od of height­ened po­lit­i­cal un­cer­tain­ty."