The prime minister’s address to the party faithful at the People’s National Movement (PNM’s) 67th anniversary celebration at the National Academy for Performing Arts (NAPA) is radically different to his New Year’s Day message which assured the nation that 2023 will bring brighter days. He warned the party faithful that difficult times were ahead, and the country must prepare to adjust. Which is it, brighter or more difficult days?
The prime minister and the finance and energy ministers routinely rubbish commentators who argue that the country cannot depend on the energy sector alone describing them as, uninformed prophets of doom, naysayers who are “misleading” the country. The finance minister has boasted about the strength of the HSF, the achievement of the first fiscal surplus in 14 years and that the economy had turned around as indicated by the Finance Ministry’s press release last Friday. The prime minister once petulantly ranted that commentators advocating “diversification, diversification, diversification” were annoying. It was the same with “forex, forex, forex,” and “ferry, ferry, ferry.”
The sudden change in outlook is in response to the public backlash caused by the Regulated Industries Commission’s (RIC) provisional grant of increased electricity rates which range from 15 per cent to 64 per cent. The public consultations on the rate increases have been marked by public anger and angst. Most have objected to the substantial rate increases as they have come at the same time as increased fuel prices and rising inflation which have affected the cost of living as household income growth has been much slower than the inflation rate.
He raised the possibility that circumstances could change so significantly that gas reserves could be insufficient to generate the revenues to which the citizens had become accustomed. In that scenario, he noted that citizens would no longer benefit from services supported by the State which citizens had come to view as entitlements. Those services included electricity, water, health care, public transport and interisland travel, all provided at subsidised rates as a matter of government policy.
Importantly, he said that there was no good time to adjust rates and noted that the Government should not intervene to reverse the decision. He said that T&TEC could not even pay for the supply of gas provided by NGC at below-market prices, an unsustainable arrangement in the current economic environment.
Politicians are in a leadership role and therefore tend to project hope as messengers of bad news are not generally welcomed by the electorate. Hence, politicians tend to paint a more optimistic picture as the electorate prefers good news to bad. Optimistic scenarios are deceptive half-truths as they contain some element of truth which deceive the listener by presenting a believable scenario using aspects of the statement that can be shown to be true as a good reason to believe the statement is true.
Dr Rowley’s presentation was a tacit admission that the economic reality is far from the previous upbeat commentaries, like the finance ministry’s Friday press release. The recent financial buoyancy that has reversed the depression of recent years is the result of one-off international market developments caused by the war in Ukraine, a short-term windfall gain that can be quickly reversed. The message is clear; difficult times are ahead, and everyone will have to adjust.