I have spent a great deal of time read­ing the com­ments and views on whether T&T's econ­o­my is in a slump, re­ces­sion, slow­down or what­ev­er des­ig­na­tion and de­scrip­tion some have felt ap­pro­pri­ate. Notwith­stand­ing the ex­per­tise of some of the per­sons who have of­fered their views, I be­lieve one es­sen­tial el­e­ment is lack­ing and must im­me­di­ate­ly be ad­dressed. I be­lieve if this el­e­ment is con­sid­ered, the en­tire view of the cur­rent eco­nom­ic sit­u­a­tion in our coun­try will change. The Peo­ple's Part­ner­ship Gov­ern­ment's pur­suit of eco­nom­ic re­forms came about be­cause of a num­ber of fac­tors, most of which were in­sti­tut­ed by the pre­vi­ous gov­ern­ment and rep­re­sent­ed an eco­nom­ic mis­di­rec­tion. T&T is, for the most part, to be con­sid­ered a free-mar­ket econ­o­my. In free mar­kets, the pri­vate sec­tor must be ag­ile, re­spon­sive, and cer­tain­ly not risk-averse. In free mar­kets, the pri­vate sec­tor tends to be the lead­ers of in­no­va­tion and even the cham­pi­ons for in­tra-sec­tor and eco­nom­ic di­ver­si­fi­ca­tion. They must be the ones to lead the growth of new in­dus­tries and the flow of in­vest­ments. The sit­u­a­tion in T&T is, how­ev­er, dif­fer­ent. Where­as we have a pri­vate sec­tor that is al­ways ready to sound its own trum­pet, one must now be bold enough to ques­tion whether the pri­vate sec­tor has re­al­ly lived up to its re­spon­si­bil­i­ty to it­self and the en­vi­ron­ment in which it op­er­ates.

Sweep­ing eco­nom­ic re­forms

The pre-NAR econ­o­my un­der the Williams/Cham­bers regimes was led by gov­ern­ment spend­ing. In the throes of a boom, the gov­ern­ment be­came the lead spender and cre­ator of wealth in the econ­o­my. Busi­ness­es were formed specif­i­cal­ly to cap­i­talise on gov­ern­ment spend­ing through lu­cra­tive con­tracts, and were sus­tained by gov­ern­ment largesse and over­spend­ing. Many busi­ness­es at that time elect­ed to re­main home-grown and did not ex­tend too many hands across the seas for in­ter-is­land trade and even be­yond to South Amer­i­ca, North Amer­i­ca and Eu­rope. Small busi­ness­es with in­creased rev­enue and greater ex­pec­ta­tions in­vest­ed lit­tle in growth po­ten­tial, client loy­al­ty, sus­tain­able ex­pan­sion and em­ploy­ee de­vel­op­ment. The NAR and post-NAR pe­ri­od saw sweep­ing re­forms which, in the face of a re­ces­sion, led the gov­ern­ment to pull back spend­ing, re­struc­ture pri­or­i­ties, ad­vance new de­vel­op­ment pro­pos­als and fo­cus more on the fun­da­men­tals of the macro­econ­o­my. The re­forms were nec­es­sary, with­out a doubt, and were the on­ly way out of cer­tain doom for the lo­cal econ­o­my. In that pe­ri­od, many busi­ness­es fold­ed, some peo­ple lost their homes and con­sumer spend­ing fell sharply. The rea­son? The for­mer gov­ern­ment had crowd­ed out the pri­vate sec­tor's lead role in the econ­o­my and in so do­ing, weak­ened the pri­vate sec­tor in­to a form of eco­nom­ic de­pen­dan­cy. The new gov­ern­ment set the con­di­tions for the pri­vate sec­tor to take the lead.

Float­ing TT dol­lar

By the fol­low­ing PNM regime of 1991-1995, it was the re­form ap­proach that had strength­ened the econ­o­my so much that the TT dol­lar could have been float­ed with con­fi­dence, putting in the hands of the pri­vate sec­tor the op­por­tu­ni­ty to take a lead role in the econ­o­my. The 1995-2000 UNC ad­min­is­tra­tion took a firmer ap­proach to em­pow­er­ing the pri­vate sec­tor and by the end of its term, all in­di­ca­tors were pos­i­tive, even on nar­row means. In fact, the gov­ern­ment at that time, notwith­stand­ing low oil prices, had been able to in­spire so much con­fi­dence in the free-mar­ket econ­o­my, it was able to save for the Her­itage and Sta­bil­i­sa­tion Fund. The PNM gov­ern­ment that fol­lowed (2001-2010) brought with it a rag­ing in­tent to re­turn to pre-NAR eco­nom­ics and once again be­gan a ram­pant cam­paign to crowd out the pri­vate sec­tor, by ac­cel­er­at­ing ex­pen­di­ture to an al­most un­sus­tain­able lev­el. The gov­ern­ment's role as reg­u­la­tor, fa­cil­i­ta­tor and pol­i­cy­mak­er suf­fered at that time be­cause the PNM was op­er­at­ing the gov­ern­ment like a busi­ness that didn't have to be wor­ried about its rev­enue; it just need­ed to spend.

The 2008 fi­nan­cial cri­sis blew that bub­ble in an in­stant and the PNM strug­gled to find ways to de­cel­er­ate spend­ing, while at the same time not al­low­ing the econ­o­my to dip in­to the red. Not the best eco­nom­ic man­agers, the PNM could not fight off the ef­fects of the prob­lem they helped to cre­ate, par­tic­u­lar­ly when faced with an in­ter­na­tion­al phe­nom­e­non over which they had no con­trol. The Peo­ple's Part­ner­ship's mixed bless­ing of win­ning the elec­tion race, but be­ing faced with an econ­o­my in need of re­form, once again brought in­to sight the pos­si­bil­i­ty of an "NAR sce­nario." Time and ex­pe­ri­ence have, how­ev­er, taught politi­cians a great deal. This time, the re­forms un­der­tak­en were at­tend­ed to with so­cial poli­cies that would take the sting out of re­forms for the most vul­ner­a­ble, as well as in­cen­tives for the pri­vate sec­tor to take hold of and recom­mence its path to be­com­ing the pri­vate sec­tor that it could be. That to­day we find some busi­ness or­gan­i­sa­tions talk­ing about a slump and de­creased eco­nom­ic ac­tiv­i­ty is an un­for­tu­nate and in­de­lib­er­ate ad­mis­sion of the weak­ness of the pri­vate sec­tor.

Quit com­plain­ing

If we are in a slump, on this oc­ca­sion the Gov­ern­ment in place has done all that it had to do and more of what it could have done in or­der to re-in­spire a true free mar­ket. If we are in a slump and per­sons are seek­ing rea­sons and li­a­bil­i­ty, the pri­vate sec­tor must be pre­pared to ex­am­ine it­self first and un­der­stand the role it plays in achiev­ing eco­nom­ic di­ver­si­fi­ca­tion, eco­nom­ic growth, job cre­ation and sus­tain­able de­vel­op­ment. The pri­vate sec­tor must now stop this con­tin­u­ous com­plain­ing about a slow­down and be the lead­ers they claim to be. The in­cen­tives are there, the so­cial pro­tec­tion for our most vul­ner­a­ble is there, the em­ploy­ment train­ing and cer­ti­fi­ca­tion ini­tia­tives are there, the friend­ly tax en­vi­ron­ment is there, the sta­bil­i­ty fac­tors are there. What, then, is the pri­vate sec­tor wait­ing for? If we are to tru­ly emerge as the force we want to be in the Caribbean and the world, the Gov­ern­ment has done its part. It is for the pri­vate sec­tor to now take re­spon­si­bil­i­ty. Now, more than ever, is the time to in­vest!

Jee­wan Jaimun­gal

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