It is stan­dard op­er­at­ing pro­ce­dure that a new­ly elect­ed gov­ern­ment will ac­cuse its pre­de­ces­sor of weak­ness or fail­ure. The out­go­ing PNM gov­ern­ment spent much of its time in of­fice blam­ing the UNC for many of the prob­lems that it faced. It would be a mis­take for the cur­rent ad­min­is­tra­tion to fall in­to this trap.

What­ev­er the pre­vi­ous ad­min­is­tra­tion did, or did not do, this ad­min­is­tra­tion is re­spon­si­ble for solv­ing it all. It was elect­ed to take ac­tion to im­prove the lives of its cit­i­zens. It must demon­strate that it has the com­pe­tence and ca­pac­i­ty to make a mea­sur­able im­prove­ment on the per­for­mance of its pre­de­ces­sors.

This is Kam­la Per­sad-Bisses­sar’s sec­ond term as Prime Min­is­ter. She al­so served in dif­fer­ent ca­pac­i­ties un­der Bas­deo Pan­day and for ten years as op­po­si­tion leader. The prob­lems are not new. Ad­dress­ing the eco­nom­ic and so­cial chal­lenges will re­quire dif­fer­ent ap­proach­es. Some poli­cies will be changed, some tweaked, and some con­tin­ued. This is a new team with ex­pe­ri­enced hands and neo­phytes, and the learn­ing curve is steep with no time for re­hearsal.

For the record, the coun­try ex­pe­ri­enced a deep de­cline in its for­eign ex­change earn­ings and tax rev­enues when en­er­gy prices de­clined in 2014. Since then, nat­ur­al gas pro­duc­tion has al­so de­clined. Ex­cept for an en­er­gy price bo­nan­za in 2022 and 2023, the coun­try en­dured a de­pres­sion. Eco­nom­ic growth was mod­est in 2024, and the eco­nom­ic out­look is mod­est. Chang­ing the eco­nom­ic dy­nam­ic re­quires more than emp­ty rhetoric and talk of growth poles or vi­sion state­ments. It needs for­ward think­ing and a mea­sured ap­proach to find new eco­nom­ic en­gines to im­prove the coun­try’s fi­nances.

The 2025 Mid-year Bud­get Re­view last week was an im­por­tant op­por­tu­ni­ty for Fi­nance Min­is­ter Dav­en­dranath Tan­coo to clar­i­fy his think­ing about the fu­ture. It was note­wor­thy that he in­di­cat­ed that the rev­enues will be 99 per cent on tar­get. How­ev­er, man­ag­ing ex­pen­di­ture is in­tractable. He pro­ject­ed an ad­di­tion­al ex­pen­di­ture of $3.1 bil­lion and a larg­er deficit of ap­prox­i­mate­ly $9 bil­lion. He cor­rect­ly blamed the PNM for this state of af­fairs.

The ques­tion is what will he do dif­fer­ent­ly in 2026? Re­cur­rent ex­pen­di­ture is no­to­ri­ous­ly dif­fi­cult to re­duce. Giv­en the ver­bal con­ces­sions dur­ing the elec­tion cam­paign and that the Gov­ern­ment in­cludes a coali­tion of labour in­ter­ests, we can ex­pect wages and salaries to in­crease. Oth­er than ad­di­tion­al bor­row­ing, which is un­sus­tain­able, how will these ex­pen­di­ture in­creas­es be fund­ed?

Min­is­ter Tan­coo’s com­ments on for­eign ex­change were as dis­turb­ing as they were vac­u­ous. What is a for­eign ex­change al­lo­ca­tion com­mit­tee? How will its mem­bers be se­lect­ed? What pow­ers will this com­mit­tee have? How do those pow­ers dove­tail with the Cen­tral Bank Act? How will this af­fect the com­mer­cial bank­ing sys­tem? Is this com­mit­tee to ad­vise the Fi­nance Min­is­ter like the Eco­nom­ic Ad­vi­so­ry Board?

Sim­i­lar­ly, what do re­port­ing re­quire­ments for high-vol­ume users of for­eign ex­change en­tail? The Cen­tral Bank has the le­gal au­thor­i­ty to ad­dress the com­mer­cial banks. How­ev­er, the com­mer­cial banks do not have sim­i­lar pow­ers over their cus­tomers.

Who has the reg­u­la­to­ry au­thor­i­ty to im­ple­ment and mon­i­tor these eco­nom­ic ac­tors? Is this a pre­lude to the reim­po­si­tion of for­eign ex­change con­trols?

These are im­por­tant ques­tions which were left unan­swered and un­ex­plained. Bud­get day is a few months away in Oc­to­ber. The an­swers to these ques­tions will set the tone for the next five years.