Andrea Perez-Sobers
Senior Reporter
andrea.perez-sobers@guardian.co.tt
Concerns are being raised by business groups and economists as to what the Government withdrew US$160.38 million ($1.09 billion) from the Heritage and Stabilisation Fund (HSF) on December 18, 2023 to do.
On Wednesday, the Guardian reported that the HSF quarterly report does not state what the US$160.38 million was used for, except that the withdrawal was made in accordance with section 15 of the HSF Act (2007).
The HSF quarterly report stated that the withdrawal came from the fund’s liquid assets, further clarifying that “assets from the US short-duration fixed income mandate were sold to meet this obligation.”
Speaking on the issue, economist Dr Marlene Attzs said the HSF was established in 2007 with two objectives: to act as a buffer for when seen things occur such as the pandemic and to accumulate savings for future generations as a result of the depletion of non-renewable resources.
Attzs noted that the Finance Minister had indicated during the pandemic that this country was fortunate to have access to the HSF for COVID-19 emergencies.
“We understand now that there was a withdrawal in December of 2023 to the tune of $1.09 billion, approximately US $160.38 million, and there is no indication of what that withdrawal was for. I think in a spirit of transparency as with this withdrawal the government went back to seek supplementary approval for $3 billion to meet its expenditure based on budget 2024,” Attzs explained.
Economist Marino Browne said it is no secret that natural gas prices are down by at least 40 per cent and that must be taken into consideration. He said it is clear the Government cannot keep running to the HSF.
“Notwithstanding the good news about the final investment decision on Manatee, that field cannot close the gap in terms of the amount of production that we've lost. It can't. So, what will you do in the intervening period, the three years between now and when Manatee starts to produce? And even if it starts to produce in 2027, we have no idea what the prices will be then,” Browne highlighted.
Business groups
Chairman of the Confederation of Regional Business Chambers, Vivek Charran, said “If money is drawn from the HSF, then one would have to assume it was drawn because existing US-dollar inflows are insufficient. The money was withdrawn to perhaps cover a shortfall in Government expenses or even to bolster Central Bank forex reserves. Yet it is said we are not in a forex crisis, but money continues to be drawn from the country’s savings.”
Giving a different outlook on the issue, T&T Chamber of industry and Commerce said the Act is very clear about how the funds can be used.
“The HSF cannot be used to directly finance capital expenditure or as collateral for government borrowing,” said the T&T Chamber, adding that there is specific guidance in the Act, so once the Fund is being utilised in the stipulated manner, there is no reason for concern.
“The Fund is designed to ensure the best interests of our people are served. The government is doing what it sees as necessary at this time and is within its rights based on the Act. We believe that this signals the need for ongoing robust discussions among stakeholders, with actions to be taken to catalyze and build other sectors of the economy to enhance and improve economic activity,” The chamber added.