Finance Minister Colm Imbert has said that T&T is fortunate to be a full member of the Development Bank of Latin America (CAF) saying its approach is a breath of fresh air compared to the that of other multi-lateral lending institutions.
“I really have appreciated their approach to financing infrastructure, policy, and fiscal consolidation in T&T. It has been a breath of fresh air when compared to other developmental banks.”
Imbert spoke yesterday at the CAF Seminar entitled “Envisioning Long Term Sustainability in T&T” held at the Hilton Trinidad Hotel, St Ann’s.
According to CAF, this seminar organised on its 50th anniversary will address long term developmental challenges with the participation of speakers from academia, the Government, international organisations and the private sector.
He added that T&T does not wish to return to the days of the International Monetary Fund (IMF) which bailed out the country but on terms that hurt the general population.
“Blind adherence to this severe model of structural adjustment at the expense of our human capital was not a road that we wished to travel again. While learning the lessons from the past, we focus on our future and carefully reviewed all of these proposals. In 2015, T&T’s economy was in an even more perilous state than the new Government initially envisaged. Although, the economy was basically flat over the 2010 to 2015 period with just a two per cent overall increase in real Gross Domestic Product (GDP) over that period, the previous Government had grown Government expenditure to unsustainable levels from TT$46 billion in 2010 to TT$63 in 2014, an increase of 37 per cent. Even before the 2015 election, we had reason to believe that T&T’s economy deteriorated.”
He said several independent commentators including international rating agencies were of a similar view.
“When we were able to establish the reality, we had to balance the need to ensure that the economy had sufficient stimulus for recovery with the need for reducing expenditure and restoring discipline in a medium-term fiscal framework. This was particularly difficult in the context of depressed commodity prices. But we chose not to return to the International Monetary Fund (IMF) for assistance. We have had enough of that. We chose a different path.”
He said their next step was to reduce Government expenditure to “manageable” levels.
“From TT$63 billion to TT$52 billion in the first year and eventually down to $50 billion by 2018. It may sound facetious but we were able to do this by cutting out waste, mismanagement and inflated costs known in some quarters as corruption.”
He also justified the closure of state-owned Petrotrin as it was a “money loser” and the restructure of Caribbean Airlines.
He said both led to the state saving money.
Imbert added that T&T’s economy has been dependent on energy for almost half-century and it takes a long while to diversify the economy.
But he added that T&T is making the effort to diversify the economy.
“Buzz words like the blue economy, the green economy, and the silver economy sound nice, but these transformations cannot be achieved overnight. The economy of T&T has been changing and in 2019 the mining sector and the petroleum product sector which are the core areas of T&T’s energy sector make up just 28 percent of the economy. The other 72 percent is made up of the non-oil, manufacturing and a range of non-oil services which has helped us to weather the storm created by the collapse of oil prices. Eleven years ago in 2008, the petroleum sector made up 50 percent of T&T’s economy. There has been a significant shift away for absolute dependence on oil and gas,” he said.