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Tuesday, February 25, 2025

PM's missed opportunities

by

20150109

A cou­ple as­sump­tions can be made on the fail­ure of Prime Min­is­ter Kam­la Per­sad-Bisses­sar to pro­vide the de­tails of her Gov­ern­ment's plans to main­tain and even grow the econ­o­my in the cir­cum­stances of hav­ing lost some $7.4 bil­lion re­sult­ing from the fall in oil and gas prices.

First, the Min­is­ter of Fi­nance and his col­leagues have not yet worked out where the cuts are to be made, though the so­cial wel­fare pro­gramme is to re­main un­touched, jobs are to be pro­tect­ed and there is to be no slow­down in eco­nom­ic ac­tiv­i­ty.

The sec­ond as­sump­tion is that while the min­istry has al­ready worked out the de­tails of the cuts, the Gov­ern­ment is not yet ready to list them lest they con­flict with the over­whelm­ing­ly pos­i­tive por­tray­al of the Prime Min­is­ter as she as­sured "that the pace of busi­ness ac­tiv­i­ty con­tin­ues to pre­serve jobs and per­son­al in­comes."

It is dif­fi­cult to com­pre­hend how the Gov­ern­ment plans to not spend bil­lions of dol­lars on in­fra­struc­tur­al projects and re­duce spend­ing on non-crit­i­cal goods and ser­vice with­out there be­ing a loss of jobs and neg­a­tive im­pact on the op­er­a­tions of the fi­nan­cial and con­struc­tion and oth­er sec­tors that de­pend on gov­ern­ment spend­ing.

There is al­so the hang­ing ques­tion of whether or not the con­tin­u­a­tion of the San Fer­nan­do to Point Fortin High­way fits in­to the cat­e­go­ry of projects for which fund­ing has not been con­firmed and so will be sus­pend­ed.That's be­cause Fi­nance Min­is­ter Lar­ry Howai told Par­lia­ment on Wednes­day that fund­ing of the high­way from the Trea­sury was like­ly to end and the Gov­ern­ment may need to bor­row mon­ey to com­plete the road­works.

It seems that if there is one in­fra­struc­tur­al project for which state funds have not been con­firmed, that would be the con­tro­ver­sial high­way.Sig­nif­i­cant­ly miss­ing too from the PM's state­ment was an out­line of how the Gov­ern­ment is to en­gen­der the di­ver­si­fi­ca­tion of the econ­o­my through the pri­vate sec­tor and with a few crit­i­cal ini­tia­tives tak­en in the pub­lic sec­tor.

Sim­ply say­ing that Gov­ern­ment "will con­tin­ue its in­vest­ment in these and oth­er new sec­tors that will sup­port a grad­ual shift from heavy re­liance on en­er­gy re­sources, to a broad­er based econ­o­my," is ab­solute­ly in­suf­fi­cient to give any as­sur­ance that the di­ver­si­fi­ca­tion nec­es­sary to break the de­pen­dence on en­er­gy is to be achieved in the short or medi­um term.The Prime Min­is­ter al­so said noth­ing of a fall-back op­tion of bor­row­ing in some form to meet ex­pen­di­tures if the $4.5 bil­lion "sav­ings" are not made.

Lack­ing as it is in de­tails, the state­ment seeks to push the prob­lems and the so­lu­tions down the road per­haps be­yond the hold­ing of elec­tions. In this re­spect, it may very well be that faced with the un­pop­u­lar de­ci­sions which have to be tak­en soon­er rather than lat­er, the gov­ern­ment may be forced to call an elec­tion be­fore the im­pacts of the bud­get cuts be­gin to set in.

It is well un­der­stood that the Prime Min­is­ter did not want to en­gen­der pan­ic among the pop­u­la­tion and there­fore went out of her way to give the as­sur­ance that the Gov­ern­ment will man­age its way through the dif­fi­cul­ties.There is some log­ic in such an ap­proach, as pan­ic helps no one and car­ries a dy­nam­ic of its own that will make things worse than they need to be.

How­ev­er, be­ing fo­cused on putting a good face on the prob­lems of los­ing $7.4 bil­lion in rev­enue, the Prime Min­is­ter missed an op­por­tu­ni­ty to alert the coun­try that the cir­cum­stances have changed sig­nif­i­cant­ly re­gard­ing the coun­try's rev­enue base and there are no as­sur­ances that there will be a re­turn to high oil and gas prices in the near fu­ture.

Un­der such cir­cum­stances, and with­out gen­er­at­ing pan­ic, the Prime Min­is­ter, as leader of the coun­try, had every re­spon­si­bil­i­ty to in­form and coun­sel cit­i­zens to re­turn to pru­dent fi­nan­cial be­hav­iour.

And she could have urged the pop­u­la­tion to in­no­vate and as­pire to greater dis­ci­pline and pro­duc­tiv­i­ty–fac­tors that would be ul­ti­mate­ly re­quired to turn the sit­u­a­tion around. Op­por­tu­ni­ties lost!


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