T&T is not in a recession, Energy Minister Conrad Enill insisted last Thursday, refuting such reported claims by business leaders. Instead, T&T is experiencing "lower economic activity," the minister disclosed in an exclusive interview with the Sunday Guardian at his International Financial Towers office on Wrightson Road, last Thursday. Enill made the statement after he was asked about the reported recession. A newspaper report, last Thursday, said business leaders believed that the Central Bank's most recent economic indicators had confirmed that T&T was in recession.
The indicator from the Central Bank was that the country's economic growth fell by more than four per cent between October, 2008, and March, 2009. However, the Energy Minister charged that the information from Central Bank was interpreted "how they wanted," and that the bank never said T&T was in a recession. "Central Bank did not say we're in a recession. The bank can't say that, because it's not true. "Some commentators have decided that, once you have two quarters of lower economic growth, you are in a recession. "But you have to look year to year to determine if you're in a recession. Quarter to quarter is cyclical." Enill added further: "You can't have a recession in T&T with full employment. It doesn't make sense."
Noting that you could have lower economic activity, however, because of less revenue, he asked: "Which country has a recession and a five per cent unemployment rate at the same time? In 2001, the unemployment rate was 12 per cent and I don't know we had a recession then." He said since last year there was a significant number of jobs not taken. "I'm seeing a significant amount of vacancies in the non-energy sector not being filled. "There are individuals working three and four jobs. That's why we had to bring in foreigners." Enill said the situation was such that the managers of certain industries found themselves having to reduce their requirements for labour. He suggested that job vacancies were not being filled because "some people may want money, but not work."
President of the Greater Chaguanas Chamber of Commerce, Stephen Cadiz, said they continued to see job losses in all sectors in the area and signs of a recession were evident all over. President of San Fernando Business Association, Daphne Bartlett, said T&T was experiencing the symptoms of a recession since the end of last year. Outlining the difference between a recession and lower economic activity, Enill said a recession had to do with rising unemployment, inflation and major reduction in GDP. "If these conditions are present, we can conclude that we're in a recession. None of these things are present." Told that hundreds are losing jobs all over the country, he replied: "The way you look at it is not in the context of absolute numbers, but in the vacancies that are not being filled."
So what is lower economic activity? "If you used to spend $52 billion, you're now spending $40 billion," he said, summing up that situation. "Government has to manage the economy on the basis of maintaining macro-economic fundamentals. This simply means you don't spend all the money you get; you save some." And how is lower economic activity going to affect the average citizen? "It doesn't affect the average citizen," Enill replied. "I don't know that they're paying more for gas, or (have) stopped getting the education grant (from the Government)." So the nation has nothing to be worried about?
"Lower economic activity also suggests you have to take a view where you get more efficient and productive, because wastage could have a big impact on you. Your resources will have to do more for you." He said duration of the period of lower economic activity in T&T would depend on how Government proposed to spend in the future, and on what they would concentrate the spending. The answers to these questions would be decided by budget time later in the year, he said. T&T is the only country "in this part of the world" that is not doing too badly economically, Enill pointed out. "We're the only country in this part of the world to have the ability to continue with our development programme. Most of the others are in a difficult situation.
"Although we have lower prices, we still have a level of revenue from trading in energy. There's no trade in tourism, agriculture or offshore activities in any part of the Caribbean. "Most territories are taking a beating." Asked if it was due to prudent fiscal management by the Government, he replied: "Government created and maintained the Heritage and Stabilisation Fund and the Infrastructure Development Fund. On a yearly basis, we had surpluses which went to the Central Bank."