En­er­gy econ­o­mist Gre­go­ry Mc Guire be­lieves T&T is head­ing for a down­ward eco­nom­ic spi­ral be­cause of Gov­ern­ment's un­will­ing­ness to wean the pub­lic from its de­pen­dence on gas sub­si­dies.Speak­ing at a post-bud­get fo­rum at the Oil­fields Work­ers' Trade Union's (OW­TU) Para­mount Build­ing head­quar­ters, San Fer­nan­do, yes­ter­day, Mc Guire con­tend­ed that ex­or­bi­tant sub­si­dies on gas and elec­tric­i­ty could not be sus­tained over time, even though the econ­o­my was rel­a­tive­ly sta­ble.Not­ing that the sub­si­dies had in­creased ten-fold from 2001 to 2011, Mc Guire said the path on which T&T was be­ing steered was sim­i­lar to what ex­ist­ed dur­ing the eco­nom­ic bust of the 1980s.

He added: "Soon­er or lat­er, we sense that some Gov­ern­ment will find them­selves in a sit­u­a­tion where they will have no choice but to re­duce the lev­el on trans­fers and sub­si­dies, which over the last ten years have in­creased ten-fold."In 2001, 25 per cent of Gov­ern­ment ex­pen­di­ture went in trans­fers and sub­si­dies, while in 2011, 56 per cent of Gov­ern­ment's ex­pen­di­ture went to trans­fers."In oth­er words, the mon­ey we earn from oil and gas, we are sim­ply us­ing to sub­sidise, rather than to cre­ate new ca­pac­i­ty for growth of the econ­o­my.

"There­fore, in the face of a stag­nant econ­o­my, a bud­get that in­creas­es sub­si­dies, is a cause for con­cern. Cit­i­zens re­main con­cerned about the fu­ture be­cause of the ab­sence of a clear sense of di­rec­tion and new ini­tia­tives in the trans­for­ma­tion process."Mc Guire said the no­tion that pro­mot­ing CNG as an al­ter­na­tive fu­el would re­duce the sub­sidy over time was not fea­si­ble.He said: "In my judge­ment, they need to do much more than that. This sub­sidy can­not be sus­tained over time. We need to wean the pop­u­la­tion out of it."We need to track the sub­sidy at the bud­get price of oil, so if the bud­get­ed price of oil is $75 a bar­rel, any­thing above $75 should be passed on to the pub­lic. "They al­so need to im­prove the al­ter­na­tive means of trans­porta­tion so pub­lic trans­porta­tion will be more ef­fi­cient."If this hap­pens, every­one will not see the need to pur­chase a car and if they do, they will not use it every­day," Mc Guire con­tend­ed.

Asked by stu­dents whether T&T could be head­ed to the IMF af­ter a third year of deficit spend­ing, Mc Guire said that was un­cer­tain."The an­swer to that ques­tion is we don't know. It de­pends on the ex­tent to which we are con­tin­u­ing on the path that we are on. "The path that we are on could lead to de­struc­tion if we do not pause for a mo­ment and take a dif­fer­ent di­rec­tion," Mc Guire warned.He ex­plained that in the boom days of the 70s calls were made to slow down the trans­fers on sub­si­dies and ex­pen­di­ture, but it was not done and in the 1980s all sub­si­dies had to be cut and State en­ter­pris­es had to be di­vest­ed.Mean­while, for­mer se­nior econ­o­mist of the RBTT Group, Hay­den Blades, de­scribed the bud­get as vi­sion­less.La­bel­ing it Eco­nom­ic Re­cov­ery Plan, Part 2, Blades said he had yet to see con­sti­tu­tion­al re­form and re­form with re­gards to par­ty fi­nanc­ing.He called for col­lab­o­ra­tion with Gov­ern­ment and warned that an­tag­o­nism from the labour move­ment would not do T&T well.