Tuesday February 9th, 2010
- Last update:8 hours 45 min ago
Opposition Leader says T&T in recession
Budget offers ‘no hope’
Published: 12 Sep 2009
Opposition Leader Basdeo Panday delivers his response in Parliament yesterday to Finance Minister Karen Tesheira’s fiscal package.
Opposition Leader Basdeo Panday says the 2009/10 national budget offers no hope for the people of T&T. Panday said so during his three-hour budget response in the House of Representatives yesterday.
It was the first time he responded to a budget in three years because in the first instance his Couva North seat was declared vacant because of a court ruling and on the second occasion he was suspended because of his failure to heed a ruling by Speaker Barendra Sinanan about the use of a laptop computer during the particular sitting. Panday warned that after the $44.3 billion budget was approved the Central Bank would reveal the true state of the national economy. “The data which the Central Bank will produce conveniently after this Budget debate is finished will show that T&T is in fact, undeniably in a recession.” He said the country’s economy was in trouble because of the reckless spending and mismanagement of the economy by the Patrick Manning administration over the past several years. “The only plan the government has is to spend, spend and spend,” Panday added. He said the budget “offered nothing to spark a resurgence in any sector of the economy.” He said the Opposition UNC had no confidence in the Minister of Finance’s projection of positive growth in 2010.
“We see nothing to engender public confidence and to stimulate consumer spending. We see nothing here to stem the fall in business confidence.” He said the Finance Minister was engaging in a course of action that would burn a huge hole in the country’s foreign reserves in fiscal 2010. He then warned of “a very real possibility of a serious problem.” Panday also warned of an imminent devaluation. “The Government’s reckless expenditure pattern is pushing this country towards a possible devaluation in the short term.”. To this PM Manning responded telling Panday: “That was very irresponsible.” Panday said Tesheira should make a firm statement on that matter during the debate. He noted that the Review of the Economy, which was presented with other budget documents was not presented this year. He said that was contempt of Parliament. During his response, Panday was heard coughing on several occasions, prompting Prime Minister Patrick Manning to advise him to “stay out of the dew at nights”, to which Panday responded: “If we had a good health system here I would not be like this.” Panday was very critical of Tesheira saying the budget was only about “spending, spending and spending.” Panday said citizens still slept on the floor in public hospitals, the education system was irrelevant to the nation’s needs, the agriculture sector remained undeveloped, the manufacturing sector was on the decline, the minimum wage is unacceptably low.
“The only thing growing in this country is crime,” Panday said. He accused the Government of engaging in public relations gimmickry and failing to keep promises to citizens. Panday made a direct call to Prime Minister Patrick Manning to remove World record holder and former West Indies cricket captain, Brian Lara from the stadium being constructed in Tarouba, south Trinidad. “Mr PM for the sake of Brian Lara, remove his name from that,” he added to sustained desk-thumping. Panday said the Government was unable to say last week when the project would be completed and at what cost. “And you call that prudent management. I wonder what our zealous Minister of Finance has done to ensure transparency, accountability and value for money on that project,” Panday added.
Traffic offences
Dealing with the significant increase in penalties for road traffic offences to reduce the carnage on the nation's roads, Panday said it would not work. He suggested instead that police officers be equipped with speed guns. “If the Minister was really serious about addressing the carnage on the roads she would have implemented the Breathalyser. These fines are pure and simple desperate attempts to prop up government expenditure.” He said the Government was seeking to “fill a void caused by squander mania.” Dealing with tints on vehicles, Panday said employees of the Licensing Division were being put at a disadvantage in the execution of their duties as a special piece of equipment is required to prove that a tint was illegal. He said the property tax was “infamous and notorious.” He said the initiative to increase existing property taxes was “a desperate attempt to raise funds to satisfy the government’s spending craze.” He said the Property Tax was a “regressive” measure and suggested that the measure should be withdrawn.
This is the Budget response
This is the Budget response Mr. Lord. I believe it is due more than the one or two lines on each subject accorded to the Opposition Leader. Much more was said on the subject of the Property taxes, yet here it is relegated to a throwaway line at the end of the article. The nature of news being what it is, I am sure the Opposition's response will not be revisited in the pages of your newspaper, so you have done the public a great disservice by missing the boat.
Sad to have to say, but I am not a fan of Mr. Panday's but it is the only Opposition response and it was in fact a good one with insightful remarks that harken back to his heyday. It, and he, deserved better.
Oops...just noticed the
Oops...just noticed the entire response was posted as well. Kudos to the Guardian, but your reporter still failed in distilling it down from a 3 hour speech to the salient points for general consumption.
Its the best speech I have
Its the best speech I have read from Panday, he got into the nooks and crannies and had a couple wisecracks and a Latin phase asnd quoted Abe and told the speaker you dont have to l.listen to the next one. Wow Panday, I learnt a lot of what going on in TT. Now go in for the right spot be incisive, join forces back again with Warner et al and I know you can do it. Throw a Pooja now and invite all those guys and say prayers together. Throw out the PNM.
The UNC with Basdeo Panday
The UNC with Basdeo Panday as the political leader offers no hope for the people of the Republic of Trinidad & Tobago , either - therefore , T&T is in a sad state .
ATW - Barbados .
Either we are wineing in the
Either we are wineing in the streets during carnival or we are whining about perceived failures of the Govt of T&T. We really are a nation of whiners. Sure, things arent perfect in Trinidad. Whether its the crime situation or whatnot. But the fact is Trinidad is on sound economic footing. This cant be explained to the layman unfortunately. They want it all and they want it now. We have these same sort of people here in the States as well. Logic and reason fails them. They challenge why the US govt provides financial aid to other countries instead of using the money to insure that there is no poverty or hunger at home. Why the US spends so much on their military and not enough is allocated to domestic law enforcement, and also why the need to visit the moon or maintain a space station which costs billions. So many things i wanted to say on here but I will hold my tongue and suggest instead that you all read the analysis of T&T's budget by Ernest and Young dated Sept 12 2009:
• The balance sheet of the country remains strong.
As detailed by the minister, despite heavy expenditure during the boom times the Heritage and Stabilisation Fund stands at US$2.9 billion, import cover at US$8.6 billion remains at 11 months and public sector debt is projected at 39 per cent of GDP. The latter figure, however, has not been adjusted for off balance sheet borrowing by Government-owned entities nor does it anticipate the conservative estimate of up to $5 billion in bonds that will potentially be issued to support the rescue of CL Financial Holdings Ltd. In addition, unemployment, although growing, remains at historical lows and is projected by the Central Bank to range between six per cent-seven per cent, well under the rate in the US which is expected to surge over ten per cent before the end of this year. Whilst not as solid as Chile, in many respects we are in far better shape than our Caribbean neighbours and as such can afford to use measured and targeted deficit spending to stimulate the economy during the current recession.
This stimulative spending was sustained in 2009, resulting in a fiscal deficit of 6.3 per cent of GDP and is expected to prevail in 2010 with a planned fiscal deficit of 5.3 per cent of GDP with additional targeted spending being earmarked for affordable housing, infrastructure spending and construction incentives. Thereafter, the minister announced a phased withdrawal of government stimulus in 2011 and 2012 in conjunction with renewed private sector confidence and spending.
• The Point Lisas economic development strategy and the LNG trains embarked upon by our leadership has been a proven winner. These successes demonstrate that collectively we have the vision, talent and tenacity to achieve great economic feats. The time has now come for new areas of economic expansion to be focused upon, championed and executed in the areas of financial services, tourism, agriculture and manufacturing.
• Despite short-term pricing pressures, natural gas remains a viable alternative source of clean energy. Influential business leaders in the US should be able to convince Washington to invest more heavily in transformational projects that would allow for greater use of natural gas, such as in heavy motor vehicles, to decrease the country’s reliance on foreign oil. This type of thinking coupled with decreased exploration activity in the near term should help to boost natural gas prices in the longer term.
• The T&T private sector remains arguably the most entrepreneurial and innovative in the region. T&T remains one of the most competitive and open economies in the region and our business leaders have demonstrated the risk appetite to cross borders and make investments throughout the Caribbean, Central America, the UK and the US.
In the context of the present crisis, the minister provided ample rhetoric on the desire for enhanced government efficiency through the use of technology, greater co-operation with the private sector towards economic diversification, and the need for accountability and better service from government institutions such as the soon to be activated T&T Revenue Authority. These are all laudable objectives which have been on the cards for some time but the minister’s presentation lacked sufficient detail to allow for meaningful analysis of these initiatives.
Although important lessons can be derived from rearview gazing, there is no additional value in harping on the mistakes of the past. As a nation we must now forge ahead and seize the opportunity in this crisis to decisively transform our economy through diversification and savings with a view to making it less vulnerable to future external shocks and more sustainable for the next generation. In the short term, however, we must content ourselves with a highly uncertain future which will be more dependent upon uncontrollable factors such as the harshness of the North American winter and the robustness of the global economic recovery, than on our own doing.
Future generations will no doubt wish to place less reliance on the vicissitudes of nature and the randomness of volatile commodity prices, so as to better manage the next time the tide goes out!
• Continued from yesterday
Analysis of the 2010 budget by accounting firm Ernst & Young
Sounds like it don`t add up,
Sounds like it don`t add up, here are the real numbers the kind you have to pay for.
Trinidad & Tobago Country Snapshot
Trinidad and Tobago - Economist Intelligence Unit - The Economist
DOMESTIC POLITICS: Policymaking will become more challenging in 2009-10 as global financial and economic woes lead to a deterioration in Trinidad and Tobago's fiscal and external account balances. With the economy in recession in 2009, the already low popularity of the People's National Movement (PNM) government, led by Mr Manning, will suffer. However, with the opposition in disarray, this will not threaten the prime minister's mandate. According to recent polls, a majority of the population perceives little improvement to living standards during the recent economic boom years, regards much public spending as wasteful and is concerned about corruption. With a solid parliamentary majority, the government will be able to see through most of its legislative programme. However, the opposition United National Congress (UNC) retains sufficient seats to block constitutional changes, which require a two-thirds majority. With interparty relations hostile, this will scupper the government's hope of replacing the Privy Council with the Caribbean Court of Justice (CCJ) as the country's final court of appeal, and its goal of ratifying a new constitution. The leader of the UNC, Basdeo Panday, is due to retire; he is also facing criminal charges, which may force him out of parliament during the outlook period.
Source: Trinidad and Tobago: Country outlook
Country Forecast Overview (3 Year)
Key Indicators 2008 2009 2010
Real GDP Growth (%) 3.40 -.70 1.00
Consumer Price Inflation (av;%) 12.04 8.00 7.70
Budget Balance (% of GDP) 1.20 -1.50 -1.00
Current-Account Balance (% of GDP) 21.80 8.40 11.50
Exchange Rate US$:Euro (av) 6.29 6.28 6.28
Exchange Rate US$:Euro(year-end) 6.30 6.28 6.27
Trinidad and Tobago GDP PPP & GDP Growth Rates
2004 - 2008
Year GDP in Billions of USD PPP % GDP Growth
2004 16.82 6.54
2005 18.58 6.65
2006 21.52 12.00
2007 23.31 5.20
2008 24.66 3.40
Source: EIU Country Data
Trinidad and Tobago: risk assessment
Risk August 2009
Sovereign risk BBB
Currency risk BBB
Banking sector risk BB
Political risk BB
Economic structure risk BBB
http://www.alacrastore.com/country-snapshot/Trinidad+&+Tobago
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Trinidad and Tobago: Country outlook
April 04, 2009
COUNTRY VIEW
FROM THE ECONOMIST INTELLIGENCE UNIT
OUTLOOK FOR 2009-10
The already low popularity of the prime minister, Patrick Manning, will be eroded further by the economic downturn and the worsening violent crime situation.
Policymaking will become more challenging in 2009-10, as the deterioration of the fiscal and current-account balances leaves Trinidad and Tobago exposed to global financial and economic woes.
After slowing in 2008 to 3.5%, GDP growth will weaken further in 2009, to 0.9%, as the global recession bites. A mild global economic recovery will help to lift GDP growth to 1.9% in 2010.
Supply-side inefficiencies and loose fiscal policy preclude a rapid decline in inflation, but on the assumption of lower commodity prices and weaker private consumption, we expect inflation to ease to an average of 6.9% in 2009-10.
The exchange rate will remain around its quasi-fixed level of TT$6.3:US$1 throughout the forecast period, supported by a strong reserves position.
DOMESTIC POLITICS: Policymaking will become more challenging in 2009-10, as a deterioration of the fiscal and external account balances leaves Trinidad and Tobago exposed to global financial and economic woes. With economic growth slowing sharply in 2009, the already low popularity of the People's National Movement (PNM) government, led by the prime minister, Patrick Manning, will suffer. However, with the opposition in disarray, this will not threaten Mr Manning's mandate. According to recent polls, a majority of the population perceived little improvement to its living standards during the recent economic boom years, regards much public spending as wasteful and is concerned about corruption. The government has also been ineffective in dealing with spiralling violent crime. With a solid parliamentary majority, the government will be able to see through most of its legislative programme. However, the opposition United National Congress (UNC) retains enough seats to block constitutional changes, which require a two-thirds majority. With inter-party relations hostile, this will scupper the government's hope of replacing the Privy Council with the Caribbean Court of Justice (CCJ) as the country's final court of appeal, and its goal of ratifying a new constitution. The leader of the UNC, Basdeo Panday, is due to retire; he is also facing criminal charges, which may force him out of parliament during the outlook period.
INTERNATIONAL RELATIONS: International relations will continue to focus on developing commercial ties with gas-importing countries, most notably the US. In view of Trinidad and Tobago's shared interests with Venezuela on crossborder oil and gas issues and the proximity of the two countries, maintaining friendly relations with Venezuela will also be a priority. Trinidad and Tobago will continue to play a leading role in the Caribbean Community (Caricom), in which it is the largest economy. Trinidad and Tobago will host two major international summits in 2009, the Summit of the Americas on April 17th-19th and the Commonwealth Heads of Government Meeting (CHOGM) in November, further strengthening economic and diplomatic ties with both the western Hemisphere and the Commonwealth.
POLICY TRENDS: With lower global energy prices and falling US demand, the government will be forced to scale back its ambitious public investment programme, which it considers essential for the long-term development of the country. However, despite several revisions to the 2008/09 (October-September) budget, the fiscal stimulus will remain large by historical standards. The economy has boomed in recent years, as increases in oil and gas output, combined with high commodity prices, have generated vast energy wealth. Despite falling energy prices and tight financing conditions in 2009, policymakers will remain committed to attracting foreign direct investment (FDI) in the energy sector by overhauling the tax and incentives regime, developing downstream petrochemicals plants and local manufacturing, and addressing infrastructural deficiencies. However, as global liquidity has dried up, this will be a difficult task, and projected FDI is unlikely to materialise. The Central Bank of Trinidad and Tobago will increasingly shift its focus to boosting domestic demand growth as inflation continues to subside, and may need to turn its attention to deteriorating credit portfolios in the domestic banking system.
INTERNATIONAL ASSUMPTIONS: The global economic outlook continues to deteriorate at an alarming rate. A collapse in industrial production and trade volumes in recent months has made it clear that the downturn has become more synchronised across the developed and emerging world. We now forecast that global GDP will contract by 1.5% at purchasing power parity in 2009 (down from a contraction of 0.8% in our March report). The US, the EU and Japan will all contract sharply in 2009 (by 3.1%, 3.4% and 5.9%, respectively, substantial revisions from our forecasts last month of contractions of 2.5%, 2.9% and 5.5%). Global growth will recover only slowly in 2010, to a forecast 2% (down from 2.2% in our March report). World prices for oil and natural gas are expected to be sharply lower in 2009-10 than in 2008, weighing on Trinidad and Tobago's growth and fiscal and external performance. Despite recent downgrades, downside risks to our current forecasts are high, given the deepening global recession. Heightened risk aversion will severely restrict external credit lines, including export credits, throughout 2009, with only a slow recovery expected in 2010. More restrictive and costly access to finance will weigh on profits and growth.
ECONOMIC GROWTH: As a result of weaker energy sector performance, we expect economic growth to slow sharply in the outlook period. Following an estimated expansion of 3.5% in 2008, real GDP growth will decelerate to just 0.9% in 2009, as lower energy prices dampen both private and public investment and the US, Trinidad and Tobago's largest trade partner, endures a recession. In 2010 growth will pick up slightly (to 1.9%), as energy prices recover modestly and new production comes on stream. After several years of very strong growth, government consumption will contract in 2009, as lower energy revenue forces a freeze on spending. Fixed investment will also contract in 2009, as global financing remains rationed and construction costs rise; the recovery in 2010 is projected to be weak. Barring a sharper than expected fall in global demand for oil and gas, overall export volume growth will decline by 3.9% in 2009, before rising by 3% in 2010. With inflation--which erodes real disposable incomes--remaining relatively high and still-tight credit conditions slowing credit growth in 2009, private consumption is forecast to slow sharply. Falling investment and sharply weakening consumption will prompt real imports to contract.
INFLATION: Inflation will continue to ease throughout 2009. After peaking at 15.3% in October 2008, consumer price inflation fell to 11.7% in February. In contrast with other countries, where food price inflation has eased in recent months, it had remained strong in Trinidad and Tobago owing to flooding and pricing rigidities in the domestic market. Although there have been some indications that lower food prices are beginning to feed through, we do not expect the full impact to be felt until the second quarter of 2009. As a result, we expect consumer price inflation to remain above 10% in March, before easing rapidly in the remainder of the year. Falling food prices, combined with weaker private and public consumption, will lower consumer price inflation to 3.8% at the end of 2009. Price pressures are expected to rise again from late 2010, as global commodity prices rise and domestic demand begins to recover.
EXCHANGE RATES: Although there will be additional pressure on the currency in 2009 as support from foreign-exchange inflows is weakened, we expect the central bank to maintain the exchange rate at close to TT$6.3:US$1 in 2009-10. Since 2006 this policy has entailed a real trade-weighted appreciation of around 10%. Any change in exchange-rate policy in the face of weakening reserves could prompt volatility, given the inconsistent nature of foreign-currency flows in a relatively small economy (with multinationals injecting large quantities of foreign exchange into the economy in individual payments). In real terms the Trinidad and Tobago dollar is forecast to appreciate by a further 15% in 2009 and by 5% in 2010. This will have an adverse effect on the external competitiveness of non-energy activities.
EXTERNAL SECTOR: Lower international energy prices in 2009 will mark the end of the boom in export receipts that Trinidad and Tobago has enjoyed in recent years. In 2008 we estimate a current-account surplus of US$4.9bn (19.9% of GDP), primarily as a result of a large trade surplus of US$5.6bn (22.6% of GDP). However, in 2009 import spending will contract sharply, reflecting lower prices and slowing domestic demand. Nonetheless, on the back of continued energy-related investment inflows and further real exchange-rate appreciation, the import bill will remain high by historical standards. Export revenue, hit by a sharp decline in global energy prices and recessionary economic conditions in the US (Trinidad and Tobago's largest export market), will also fall dramatically in 2009 in year-on-year terms. As a result, the trade surplus will fall from 22.6% of GDP in 2008 to just 4% in 2009, the lowest level since 2002. In 2010 both export receipts and import spending are forecast to rebound, but with exports recovering more rapidly amid a pick-up in commodity prices, the trade surplus is forecast to rise to 6.5% of GDP.
http://www.ciaonet.org/atlas/TT/Economy/Outlook/20090404_25794.html
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Also look at Trinidad outlook for 2010 and then the world outlook for 2010.
http://www.economywatch.com/economic-statistics/country/Trinidad-and-Tob...