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!