The current state of finances and prospects for a viable economic strategy remain troubling issues that undermine national confidence. While governments always need money to help solve problems, money alone will not solve any of the deep-seated problems in our society. Not crime, not the economy.
These issues are systemic and require policy shifts and good governance with infrastructure support.
Anyway, you look at it, the T&T economy is in difficulty. Not even the higher oil and gas prices can help us now because our production levels are down in both oil and gas. Higher oil and gas prices are our best news, but we have little leverage. Everything else is bad news.
The money side of things does not look good. We are using up all the money we have, in HSF and Reserves, we are producing little, we are dependent on imports, spending at almost the same levels in the same way, and living off deficit and debt financing. We are unlikely, without a plan for recovery and growth, to be able to repay our debt obligations if we continue in this way.
What to do? Grow revenue and earn more; alter spending patterns strategically; cut expenditure, don't spend more than you earn; create a climate of confidence; generate recovery, grow the economy with public projects and private investments; import less, export more. The critical question is elusive, how?
While we were managing COVID, such a plan should have been set in motion and by now results should have begun to show. What happened to the Road Map to which many nationals gave time and effort?
What not to do? Keep expenditure at the same level; spend money in the same way following the same pattern; depending on oil and gas prices for revenue; wait for energy production to go up; spend without regard to revenue generated; keep the deficit growing, borrow without a concerted action plan for recovery, growth, foreign exchange earnings; keep postponing important decisions; actively purchase goods and services without a transparent, accountable procurement regime.
You can't manage finance, ie, money and think you are managing the economy.
When you manage revenue, expenditure, deficit, debt to finance expenditure, you are managing operations, you are keeping things going and maintaining the status quo, with low productivity, and little improvement or development and constantly monitoring cash flow. There is little on the production side or on the stimulus side to make a difference in growth or development.
To manage the economy you have to manage production, trade, investment, and development. That is to say, what you can produce, what you can make, what you can do and what you can make happen. When you do these things, consumer demand at home and abroad help your businesses and your economy to grow.
In today's world, this only happens when you manage trade, investment and development sustainably. And that means understanding and appreciating that there are tangible, intangible, and practical, pragmatic elements of development. And that the objective is to export more, import less, attract more investment and stimulate entrepreneurship, innovation and competitive businesses.
So while money is always important, it is only part of the equation. Clear policy choices, effective systems, working structures, and good governance are essential parts of any equation. And these are the current missing ingredients.
Moreover, if T&T wants to be less dependent on energy, solve the foreign exchange crisis in the long term, shift to renewable energy and renewable industries, export more outside energy, move up the value chain technologically in keeping with where the most competitive economies are going, a transformation agenda must be rolled out and stakeholders have to be brought into the picture.
If you want to manage the economy to make recovery, growth and development possible then you need to recognise that what makes an economy go are businesses, government, labour, NGO s and citizens as consumers as well as groups with self-interest. All these stakeholders contribute to an economy and determine its well-being. And you also have to actively build international partnerships and alliances.
The Government seems to be off course on economic management and sustainable development. They are focused only on the counting of money.