“One must be­ware of min­is­ters who can do noth­ing with­out mon­ey, and those who want to do every­thing with mon­ey.”—In­di­ra Gand­hi

Eco­nom­ics is about scarci­ty and choice. Re­sources are al­ways lim­it­ed rel­a­tive to the range of spend­ing op­tions. To max­imise the re­turn, one must make the best choice. Choos­ing the best op­por­tu­ni­ty in­volves an op­por­tu­ni­ty cost, that is the loss of the ben­e­fit that could have been en­joyed if the al­ter­na­tive were cho­sen. In a choice be­tween two com­pet­ing al­ter­na­tives A and B, if one choos­es al­ter­na­tive A, then one los­es the ben­e­fit of B. It is pre­sumed that A gives a bet­ter re­turn than B.

This the­o­ry is sim­ple in its ex­pla­na­tion, but com­plex in its prac­ti­cal ap­pli­ca­tion. How does the Gov­ern­ment (Cab­i­net) set pri­or­i­ties to guide bud­get ex­pen­di­tures? The as­sump­tion is that choic­es are made in the na­tion­al in­ter­est. More­over, gov­ern­ments can in­crease spend­ing by bor­row­ing, bur­den­ing fu­ture gen­er­a­tions if the choic­es are poor. Too much bor­row­ing gets gov­ern­ments in­to trou­ble.

Cur­rent­ly, sub­si­dies and trans­fers ac­count for rough­ly 50 per cent of the an­nu­al bud­get though the dol­lar amount has de­creased since 2014. Mon­ey spent on sub­si­dies can­not be spent on de­vel­op­ment, health care, di­ver­si­fi­ca­tion, or main­te­nance, the op­por­tu­ni­ty cost prob­lem. The fi­nance min­is­ter has even mis­led at least one econ­o­mist with the sil­ly state­ment that he has “saved” $10 bil­lion since com­ing in­to of­fice. Re­duc­ing ex­pen­di­ture when there is no mon­ey to spend is not “sav­ing”.

Ig­nor­ing so­cial trans­fers, the most im­por­tant sub­si­dies ac­count for ap­prox­i­mate­ly $5 bil­lion. First, there is the elec­tric­i­ty sub­sidy which is borne by NGC and is con­tribut­ing to its loss­es. Sec­ond, the an­nu­al $2 bil­lion sub­sidy to WASA which is paid by tax­pay­ers. Third, the diesel sub­sidy ben­e­fits both per­son­al and com­mer­cial trans­port. Fourth, oth­er trans­porta­tion sub­si­dies in­clude the sea and air bridges, wa­ter tax­ies, PTSC and waivers on the pur­chase of maxi-taxis et al. Fifth, LPG (cook­ing gas) is sub­sidised.

Set­ting mean­ing­ful pri­or­i­ties re­quires good eco­nom­ics and good pol­i­tics. Re­duced ex­pen­di­tures on sub­si­dies and make-work pro­grammes can hurt those on low­er in­comes. If ex­pen­di­ture cuts are to be ac­cept­ed by cit­i­zens, they must be­lieve and trust the per­ceived eq­ui­ty and trans­paren­cy of the change. Every­one must be seen to give up some­thing.

But this ad­min­is­tra­tion’s mes­sag­ing has been mixed since 2015, un­com­mit­ted to the task of ad­dress­ing ba­sics. Af­ter alert­ing the coun­try to the new re­al­i­ty, it has been look­ing back, blam­ing the UNC for its wastage. What is Cab­i­net do­ing to make the Gov­ern­ment more ef­fi­cient? Franklin Khan's state­ment that the pos­si­ble rise in cook­ing gas is an at­tempt to wean the pop­u­la­tion off a de­pen­den­cy syn­drome rings as hol­low as Mr Im­bert’s boast that they “haven’t ri­ot yet.” What will Cab­i­net mem­bers and se­nior pub­lic ser­vants give up?

In­deed, in ad­dress­ing the for­eign ex­change cri­sis ear­li­er this year the fi­nance min­is­ter not­ed that de­val­u­a­tion was not an op­tion since it did not im­prove gov­ern­ment’s rev­enue. De­val­u­a­tion is a tool to fa­cil­i­tate eco­nom­ic re­struc­tur­ing, not to in­crease gov­ern­ment’s rev­enue. Mean­while, the struc­tur­al ad­just­ment process con­tin­ues nat­u­ral­ly af­fect­ing many busi­ness­es and their em­ploy­ees as they ad­just to low­er de­mand.

Min­is­ters blame the lack of mon­ey when chal­lenged by de­mands for bet­ter de­liv­ery of pub­lic goods and ser­vices, es­pe­cial­ly since the de­cline of en­er­gy prices in 2014. Sure­ly, re­struc­tur­ing WASA and re­plac­ing leak­ing pipelines or ad­dress­ing the de­fi­cien­cies in the cur­rent ed­u­ca­tion pro­gramme are pri­or­i­ties?

But mon­ey was found to fund “oth­er pri­or­i­ties.” Like buy­ing two new fer­ries, build­ing a new hos­pi­tal, fire sta­tion, and po­lice sta­tion in the dis­put­ed To­ba­go East con­stituen­cy sac­ri­fic­ing na­tion­al pri­or­i­ties on the al­tar of re­tain­ing po­lit­i­cal of­fice with pub­lic mon­ey. Or ini­ti­at­ing ex­pen­di­ture to fa­cil­i­tate a To­co port in time to “re­tain” the San­gre Grande seat in the na­tion­al elec­tion. Or re­fur­bish­ing the Prime Min­is­ter’s “new” res­i­dence in To­ba­go. In­deed, elec­tions cam­paigns have be­come syn­ony­mous with road paving and the award of big con­tracts to favoured con­trac­tors and ad­ver­tis­ing firms.

Cab­i­net sets pri­or­i­ties and tasks the state ap­pa­ra­tus (state en­ter­pris­es and the pub­lic ser­vice) with im­ple­ment­ing those pri­or­i­ties. It is Cab­i­net that de­cides how scarce re­sources (mon­ey) will be used, not pub­lic ser­vants.

The pri­or­i­ty now should be to im­prove the gov­ern­ment’s op­er­a­tional ef­fi­cien­cy and ef­fec­tive­ness by im­prov­ing the pub­lic sec­tor’s de­liv­ery ca­pac­i­ty and the man­age­ment of state en­ter­pris­es. Pub­lic pro­cure­ment ac­counts for a sig­nif­i­cant part of the na­tion­al econ­o­my and must be sub­ject to in­creased scruti­ny, not more loop­holes by weak­en­ing the Pro­cure­ment Act. Mon­ey spent on van­i­ty and self-in­ter­est­ed pur­suits is mon­ey tak­en away from fix­ing wa­ter lines or fix­ing health care.

Nei­ther new build­ings, nor new min­istries will im­prove pub­lic ser­vice de­liv­ery. Giv­ing an in­sti­tu­tion a new name, or a new coat of paint (CN­MG to TTT, NHA to HDC, 3 TD­Cs) will not change the or­gan­i­sa­tion’s elan or per­for­mance. What are the nec­es­sary steps re­quired to im­prove ser­vice and de­liv­ery? Fix­ing the gov­er­nance is­sues and ad­dress­ing the peo­ple, process and sys­tem dif­fi­cul­ties will im­prove ser­vice de­liv­ery. One does not need con­sti­tu­tion­al change to fix the Ser­vice Com­mis­sions. Ser­vice Com­mis­sions need man­age­ment and re­sources.

Pub­lic re­sources must not be used to fund re-elec­tion bids and fur­ther­ing po­lit­i­cal am­bi­tion. Gov­ern­ment (Cab­i­net) must al­lo­cate funds in a man­ner that ben­e­fits cit­i­zens’ present and our fu­ture.