Ur­vashi Ti­wari Roop­nar­ine

There will be no de­posits to the Her­itage and Sta­bil­i­sa­tion Fund (HSF) for this year. This has been con­firmed by Fi­nance Min­is­ter Lar­ry Howai who told Guardian Me­dia Lim­it­ed who ex­plained that be­cause the price of oil has fall­en be­low the price iden­ti­fied in the na­tion­al bud­get, "there will be no room to make any de­posits this year."

Over the past 42 years that T&T has been ex­port­ing oil and gas, bil­lions of dol­lars have been earned in rev­enue which has been used for many of the so­cial and in­fra­struc­tur­al projects the coun­try ben­e­fits from to­day.

While there are con­cerns that the loom­ing chal­lenge of falling oil prices could take the coun­try back to square one, Gov­ern­ment says this will not hap­pen. In an ad­dress to the na­tion ear­ly in Jan­u­ary, Prime Min­is­ter Kam­la Per­sad-Bisses­sar warned against "us­ing the pe­ri­od of chal­lenges to pro­mote fear and pan­ic," adding that to do so will "have the im­pact of cre­at­ing prob­lems where in fact no prob­lems ex­ist."

The HSF, a sov­er­eign wealth fund, was con­cep­tu­alised by the then PNM ad­min­is­tra­tion in 2000 but was on­ly en­act­ed in 2007. It now stands at US$5.5 bil­lion.Con­rad Enill, who was Min­is­ter of En­er­gy when the fund start­ed, ex­plained: "We felt, at the time, if we were able to cre­ate a pool of mon­ey from which when we in­vest it will give us in­come. It means we can build a buffer in the event that prices are re­duced. You get in­come from an­oth­er source."

He said an­nu­al de­posits to the fund de­pend on gov­ern­ment's abil­i­ty to run bal­anced or sur­plus bud­gets.

HS­Fchair: don't re­strict sav­ings

Chair­man of the Her­itage and Sta­bil­i­sa­tion Fund Dr Ralph Hen­ry feels con­tri­bu­tions should not on­ly come from the en­er­gy sec­tor as per the Her­itage and Sta­bil­i­sa­tion Fund Act.In an in­ter­view at his con­sul­tan­cy of­fice in Tu­na­puna, Hen­ry, who has been chair­man of the fund since last March, said con­tri­bu­tions have been made as re­quired dur­ing his tenure.

"The leg­is­la­tion as writ­ten fo­cus­es on oil and gas, but maybe we should have a fund pe­ri­od that we should be putting away for the rainy day," he said.Fel­low econ­o­mist Dr Ronald Ramkissoon said oil and gas has towed the lo­cal econ­o­my and per­pet­u­at­ed a lifestyle not had by many of T&T's non-oil pro­duc­ing neigh­bours. He said the cur­rent fall in oil prices brings the ques­tion of sus­tain­abil­i­ty to the front burn­er.

"When we spoke about sus­tain­abil­i­ty and re­cur­rent ex­pen­di­ture, that sub­si­dies and trans­fers were not sus­tain­able, very of­ten the politi­cians of the day would see us as prophets of gloom," Ramkissoon said.He added that a glance at decades old bud­gets show that as rev­enue in­creased, ex­pen­di­ture in­creased at a sim­i­lar rate. This trend, means that at this point "cut­ting back on ex­pen­di­ture is crit­i­cal."

Whether a gov­ern­ment hop­ing for an­oth­er term in of­fice will take this harsh nec­es­sary mea­sure will be a test of po­lit­i­cal and eco­nom­ic lead­er­ship, he said."It is a test to see if this gov­ern­ment, or any gov­ern­ment, can take the nec­es­sary mea­sures, some of which are go­ing to be harsh, and to get the pop­u­la­tion to ap­pre­ci­ate the need to do that and yet win the elec­tion," he said.Ramkissoon said the time to act is al­ways up to the state.

"If you do noth­ing, or do very lit­tle, or tin­ker at the edges, the prob­lem is not go­ing to go away, they are go­ing to haunt you or an­oth­er ad­min­is­tra­tion," he ex­plained.En­er­gy Cham­ber pres­i­dent Dr Thack­wray Dri­ver said the ef­fects are al­ready be­ing felt with­in the sec­tor.

"En­er­gy com­pa­nies are look­ing to cut dis­cre­tionary spend, but you tend to see the ma­jor projects which have al­ready been sanc­tioned and be­gan the process­es, they tend not to be cut as they would be worked out on longer term oil prices," he said.Hen­ry, who spent a large part of his ca­reer as a se­nior lec­tur­er at the Uni­ver­si­ty of the West In­dies, said the boom­ing econ­o­my has per­pet­u­at­ed a lifestyle many may not be able to re-ad­just so eas­i­ly.

"We have con­sump­tion habits based on an im­port­ed lifestyle and they are ir­rel­e­vant and sure­ly waste­ful," he said.He said the wealth of the coun­try could have been bet­ter utilised over the years."We use up for­eign ex­change to bring in a whole lot of ve­hi­cles to be in a mas­sive air con­di­tioned traf­fic jam. We could have spent a lot more as a so­ci­ety in a trans­porta­tion sys­tem that is ef­fi­cient and can get large num­bers of peo­ple from point A to point B ef­fi­cient­ly," he said

Hen­ry said small coun­tries like T&T, which are eco­nom­i­cal­ly de­pen­dent on a lim­it­ed num­ber of sec­tors should have more com­mit­ment to sav­ings.

Asked what he en­vi­sioned the HSF would best do for its most needy re­cip­i­ents, he said: "I see all ar­eas of mar­gin­al­i­sa­tion, dis­po­si­tion and re­tar­da­tion in ur­ban and rur­al ar­eas. Ur­ban like Laven­tille and rur­al like Biche and Matelot. I would like to see that a young child, girl or boy, when he or she looks in­to the mir­ror, they can see the pos­si­bil­i­ty that from right there in Matelot, they can take on the world."?