To­day the tran­si­tion com­mit­tee ap­point­ed by Prime Min­is­ter Dr Kei­th Row­ley to come up with plans on how T&T will nav­i­gate the se­vere eco­nom­ic con­trac­tion brought on by the fall-out from the coro­n­avirus pan­dem­ic will present their ini­tial re­port to the gov­ern­ment.

As far as we know the com­mit­tee was sub­se­quent­ly bro­ken up in­to small­er sub-com­mit­tees and is ex­pect­ed to guide gov­ern­ment on two things, how to avoid a to­tal melt­down of the T&T econ­o­my and how to en­sure that the coun­try moves for­ward on a more sus­tain­able and re­silient path.

The sit­u­a­tion could not be more grave as the Fi­nance Min­is­ter re­vealed to the Par­lia­ment that the coun­try was run­ning per­haps its largest ever bud­getary deficit and would have to both bor­row heav­i­ly and al­so ac­cess its sav­ings by draw­ing down on the Her­itage and Sta­bil­i­sa­tion Fund.

Fi­nance Min­is­ter Colm Im­bert told the Par­lia­ment on Mon­day that there has been a 35 per cent de­cline in nat­ur­al gas prices since Sep­tem­ber 2019, as re­sult of weak de­mand, restart­ing of nu­clear pow­er plants in Japan and sharp in­crease in the avail­abil­i­ty of LNG from non-tra­di­tion­al ex­porters.

Added to this the Fi­nance Min­is­ter spoke of an un­prece­dent­ed col­lapse of oil prices over the last three months, caused ini­tial­ly by a price war be­tween Rus­sia and Sau­di Ara­bia, which dras­ti­cal­ly re­duced the price of oil from US$60 a bar­rel in Jan­u­ary to US$30 a bar­rel in March and then, the glob­al eco­nom­ic shut­down re­sult­ing from COVID-19, which so de­pressed the de­mand for oil that last week the May fu­tures price for West Texas In­ter­me­di­ate (WTI) oil dropped to US 1 cent per bar­rel and then turned neg­a­tive for the first time in his­to­ry.

Im­bert not­ed that the IMF’s base­line sce­nario,which as­sumes that the pan­dem­ic fades in the sec­ond half of 2020 and con­tain­ment ef­forts can be grad­u­al­ly un­wound will lead to the glob­al econ­o­my grow­ing by 5.8 per cent in 2021 as eco­nom­ic ac­tiv­i­ty nor­malis­es, helped by pol­i­cy sup­port.

But the Fi­nance Min­is­ter ac­knowl­edged that these pro­jec­tions were high­ly un­re­li­able be­cause no one re­al­ly knows how the world is go­ing to get out of this sit­u­a­tion and what may be an ac­cept­able lev­el of risk, death, pain that will al­low the world’s econ­o­my to re­turn to a lev­el of nor­mal­cy.

It is true there will be pent-up de­mand but there will al­so be sig­nif­i­cant un­cer­tain­ty that will make peo­ple more care­ful in the way they spend their mon­ey.

Ac­cord­ing to the Min­is­ter of Fi­nance the im­pact of low en­er­gy prices and low­er than an­tic­i­pat­ed re­ceipts has now caused the rise of the coun­try’s fis­cal deficit for fis­cal 2020 from an es­ti­mat­ed $5.3 bil­lion to ex­pand to $15.5 bil­lion, $10.2 bil­lion high­er than was en­vis­aged in our FY 2020 Bud­get.

In cal­cu­lat­ing this re­vised deficit Im­bert said he es­ti­mate a loss of $3.8 bil­lion in tax­es on in­comes and prof­its, and loss­es of $750 mil­lion in Busi­ness Levy and Green Fund Levy, $600 mil­lion in tax­es on goods and ser­vices and in­ter­na­tion­al trade, $2.5 bil­lion in roy­al­ties and pro­duc­tion shar­ing and $1.2 bil­lion in prof­its from state en­ter­pris­es, among oth­er ar­eas.

Ac­cord­ing­ly to the Fi­nance Min­is­ter the gov­ern­ment has tak­en note of the fact that the col­lapse of the price of WTI oil to US 1 cent per bar­rel last week is hav­ing an ad­verse ef­fect on oth­er oil prices. For ex­am­ple, Brent oil, which is clos­er in price to our lo­cal crude than WTI, has dropped to US$20. Such low prices were pre­vi­ous­ly un­dreamt of.

Notwith­stand­ing the fore­casts of the USEIA and WEO of oil in the $30 range and gas in the US$2.10 range for the rest of 2020, gov­ern­ment’s lat­est rev­enue pro­jec­tions, are based on US$25 per bar­rel for oil for the rest of the year and US$1.80 per MMB­TU for nat­ur­al gas. This re­sults in a pro­ject­ed loss of rev­enue in fis­cal 2020 of US$9.2 bil­lion, to which must be added an­oth­er net US$1 bil­lion in ex­tra­or­di­nary ex­pen­di­ture, Im­bert ex­plained.

Im­bert’s num­bers clear­ly show that as a coun­try we are in trou­ble and we will on­ly dig our­selves out of this hole by dis­ci­pline, hard work and smart de­ci­sion mak­ing.

Row­ley has ap­point­ed two for­mer Fi­nance Min­is­ters to his team. To me that de­ci­sion was a wise one be­cause Win­ston Dook­er­an was Min­is­ter of Plan­ning in one of the most chal­leng­ing pe­ri­od in the coun­try’s his­to­ry and along with his col­leagues took the hard de­ci­sions need­ed to sta­bilise the econ­o­my and walk us through an IMF stand­by arrange­ment.

Those were dif­fi­cult times and at that time I had just start­ed sec­ondary school and you learn lat­er on in life how much you are pro­tect­ed from these dif­fi­cult mo­ments. But I re­mem­ber well the im­pact it had on fam­i­lies as they suf­fered pay cuts if you were lucky and job loss if you were not so lucky. Mr Dook­er­an should have some wis­dom on this mat­ter even though the econ­o­my is changed from a com­plete re­liance on oil to a re­liance on gas and oil with some fi­nan­cial ser­vices and man­u­fac­tur­ing thrown in for good mea­sure.

Sec­ond­ly, Wen­dell Mot­t­ley who be­came Fi­nance Min­is­ter while the coun­try was still in re­ces­sion and took tough mea­sures is al­so a trump card for the coun­try. When he ex­it­ed as Min­is­ter of Fi­nance he was cred­it­ed for con­tin­u­ing the trans­for­ma­tion of the econ­o­my, its lib­er­al­i­sa­tion and left it grow­ing. A growth that con­tin­ued un­in­ter­rupt­ed for 13 years.

The com­mit­tee is al­so pop­u­lat­ed with peo­ple who are well known for their com­pe­tence in var­i­ous fields and I have no doubt they will make sound rec­om­men­da­tions to the Prime Min­is­ter and his Cab­i­net. Where I wor­ry is whether Dr Row­ley, or who­ev­er be­comes Prime Min­is­ter af­ter this year’s gen­er­al elec­tion, will im­ple­ment the ad­vice or at least im­ple­ment the work­able ones.

It is hard not be cyn­i­cal in a coun­try which has a his­to­ry for re­ports ly­ing on shelves, which al­lowed the hard work of some of the coun­try’s best minds on the Vi­sion 2020 com­mit­tee to go to waste as we were more con­cerned about po­lit­i­cal ex­pe­di­en­cy.

I said last week we are all to blame for this lack of di­ver­si­fi­ca­tion, for this lack of will to im­ple­ment, for this con­stant rum shop talk and for us be­ing afraid to make big de­ci­sions.

There is no rea­son, oth­er than a lack of will, that we are not a more re­silient coun­try. It is this sense that a good time is all that mat­ters and the will­ing­ness to put is­sues of tribe and pol­i­tics ahead of good sense that our cap­i­tal city still floods every time it rains. The icon­ic pic­ture of the late Jean Pierre wad­ing through mud and slush af­ter a sit­ting of the Par­lia­ment as she tried to get to her con­stituents dur­ing the great flood of Port-of-Spain should not be for­got­ten.

We have to hold our lead­ers to ac­count and to en­sure that we are not part of the prob­lem by not en­sur­ing this is a re­al democ­ra­cy and a re­al coun­try.

It is not good enough to tell us that we need more tests be­fore a de­ci­sion can be made to re-open but no re­al ex­pla­na­tion why it took so long to get the tests go­ing.

We need to safe­ly get this coun­try go­ing again, more than that we need not to rein­vent the wheel bur rather to get the econ­o­my rolling.