As the Bud­get pre­sen­ta­tion ap­proach­es, there has been a flur­ry of ac­tiv­i­ty by the Gov­ern­ment. There was a Cab­i­net re­treat at which 50 key mat­ters were dis­cussed. There was a suc­cess­ful bond is­sue on the in­ter­na­tion­al mar­ket. The Lo­ran Man­a­tee deal was con­firmed. An agree­ment to ex­plore three new deep­wa­ter blocs was an­nounced. An­oth­er agree­ment with Venezuela re­gard­ing the Drag­on Gas field was signed. These new de­vel­op­ments have been praised by the busi­ness com­mu­ni­ty as they should be. The var­i­ous Cham­bers of Com­merce amongst oth­ers have al­so ex­pressed their bud­get day wish­es.

Con­fi­dence may be in­vis­i­ble, but it is an im­por­tant in­gre­di­ent to en­cour­age in­vestors for the long term and give or­di­nary cit­i­zens hope. How­ev­er, con­fi­dence-build­ing mea­sures must have a sol­id foun­da­tion as it is al­so said that hope whis­pers qui­et­ly with the courage of new pos­si­bil­i­ties.

The coun­try de­pends on the pro­duc­tion of nat­ur­al gas and re­lat­ed prod­ucts as they gen­er­ate 80 per cent of the coun­try’s for­eign ex­change. There­fore, it is ex­pect­ed that the Gov­ern­ment would press gas pro­duc­ers to ac­cel­er­ate new nat­ur­al gas out­put as the LNG and petro­chem­i­cal sec­tors are op­er­at­ing at re­duced ca­pac­i­ty due to a con­tin­u­ing gas short­fall. The an­nounce­ment of the Lo­ran Man­a­tee project is a sol­id de­vel­op­ment that meets this re­quire­ment. It is un­like­ly that the project will come on stream in less than three years.

The same can­not be said of the Drag­on gas field. Sign­ing an­oth­er co­op­er­a­tion doc­u­ment with Venezuela brings the Drag­on deal no clo­sure to fruition. How many agree­ments deal­ing with this field have been signed to date? But the most im­por­tant agree­ment giv­ing the ex­clu­sive right to de­vel­op the field re­mains out­stand­ing. This as­sumes a deal with the Unit­ed States on terms favourable to Venezuela can be ob­tained. In the ab­sence of any such agree­ment, no progress is pos­si­ble. One may re­main hope­ful for some break­through, but af­ter more than a decade of try­ing, a deal re­mains elu­sive.

The Fi­nance Min­is­ter will point to the suc­cess­ful bond is­sue of USD560 mil­lion for a sev­en-year term at a nom­i­nal rate of 5.95 per cent as ev­i­dence of con­fi­dence by in­ter­na­tion­al in­vestors. But this is­sue was done to re­pay a bond of USD 550 mil­lion which ma­tures ear­ly in 2024. If any­thing, it re­flects the min­istry’s cau­tion lest its cred­it rat­ing or mar­ket con­di­tions change thus af­fect­ing its chances of achiev­ing a suc­cess­ful rollover at a favourable rate next year.

The re­al­i­ty is that petro­chem­i­cal and nat­ur­al gas prices have con­tin­ued to fall, re­duc­ing for­eign cur­ren­cy earn­ings and gov­ern­ment rev­enues. In­fla­tion has re­mained strong do­mes­ti­cal­ly and in­ter­na­tion­al­ly. Sim­i­lar­ly, the de­mand for in­creased pub­lic ex­pen­di­ture comes from mul­ti­ple fronts. The Gov­ern­ment has al­ready ad­mit­ted that 2024 will be a deficit bud­get with ex­pen­di­ture ex­ceed­ing rev­enue. One can con­clude that the up­lift from high en­er­gy prices has dis­ap­peared, and the coun­try is re­turn­ing to the pre-2022 trend line.

Trag­i­cal­ly, the vi­o­lent crime wave has con­tin­ued as ev­i­denced by the grue­some mul­ti­ple mur­ders last week. Crime re­mains a se­ri­ous con­cern and the in­abil­i­ty to deal with the sit­u­a­tion does more to damp­en con­fi­dence than any an­nounce­ment on the en­er­gy front. What is the val­ue of ad­di­tion­al in­come if one can­not en­joy its ben­e­fits in peace? Solv­ing the crime is­sue re­quires pa­tient prob­lem-solv­ing and man­ag­ing the se­cu­ri­ty re­sources more ef­fec­tive­ly, not spend­ing more mon­ey or more press re­leas­es.