Eliz­a­beth Gon­za­les

To­ba­go Cor­re­spon­dent

Econ­o­mist Dr Vanus James says the promis­es be­ing made on the elec­tion cam­paign trail are “su­per­fi­cial” and dis­con­nect­ed from the eco­nom­ic re­al­i­ty fac­ing T&T.

He is wor­ried that cit­i­zens will buy in­to those promis­es de­spite can­di­dates fail­ure to iden­ti­fy where the mon­ey will come from.

“The kinds of promis­es be­ing made are not con­nect­ed to the spe­cif­ic poli­cies that would dri­ve the econ­o­my for­ward. They’re most­ly su­per­fi­cial,” he said.

James took aim at re­cent pro­pos­als to raise wages and pen­sions, in­clud­ing Wat­son Duke’s pledge to in­crease pay for CEPEP and URP work­ers to a min­i­mum of $5,000, and to boost old age pen­sion to $4,500.

“So if Wat­son Duke is mak­ing a promise, he’s run­ning as a sin­gle can­di­date. Es­sen­tial­ly, he doesn’t have a chance of form­ing the gov­ern­ment. So ef­fec­tive­ly, if he wins his seat, he would end up in the op­po­si­tion,” he said.

“And un­der the con­sti­tu­tion­al arrange­ments we run in the coun­try, the op­po­si­tion has no cred­i­ble ba­sis on which to push up the wages of any set of work­ers in the coun­try, whether they work for the gov­ern­ment or not.”

Turn­ing to the op­po­si­tion’s promis­es, in­clud­ing a pro­posed in­crease in the min­i­mum wage from $20 to $25 and a 10 per cent salary in­crease for unions, James said these could on­ly be vi­able if they are backed by pro­duc­tiv­i­ty.

“The on­ly cred­i­ble ba­sis on which you could talk about rais­ing the min­i­mum wage is if you are putting in place arrange­ments to raise labour pro­duc­tiv­i­ty in those ac­tiv­i­ties.

“Re­or­ga­ni­za­tion of ac­tiv­i­ty, pro­grams, cap­i­tal in­vest­ment pro­grams in­to what­ev­er they’re do­ing, the labour pro­duc­tiv­i­ty would go up and un­der­write the fi­nanc­ing of the wage in­crease,” he said.

“You’re talk­ing about in­creas­ing pay, and that’s the same as in­creas­ing costs for what­ev­er those work­ers are go­ing to be do­ing in what­ev­er those ac­tiv­i­ties are. And the ef­fect of that will be to put pres­sure on the busi­ness­es in the pri­vate sec­tor to be more vi­able by rais­ing their prices.”

James said even if a gov­ern­ment want­ed to im­ple­ment those in­creas­es, they would need to bor­row and that, he warned, would be dan­ger­ous.

“It would have to si­mul­ta­ne­ous­ly promise large scale bor­row­ing to fi­nance those kinds of things and that would be fool­hardy, won’t it be? You’re bor­row­ing to pay for ris­ing con­sump­tion. Es­sen­tial­ly, that doesn’t make eco­nom­ic sense for the coun­try.”

He called the cur­rent eco­nom­ic sit­u­a­tion a cri­sis and warned that the wrong pol­i­cy de­ci­sions could tip the coun­try in­to some­thing worse.

“So you’re in an eco­nom­ic cri­sis, and if you take steps of the kind they are promis­ing, you’ll end up in both an eco­nom­ic and a so­cial cri­sis in short or­der. It won’t take very long.”

Asked what politi­cians should be telling vot­ers, James re­spond­ed: “We are at a fork in the road. Noth­ing the gov­ern­ment promis­es, the cur­rent in­cum­bents promise is cred­i­ble. The pop­u­la­tion would be lack­ing in wis­dom to be­lieve them.”

James said what is need­ed in­stead is “prop­er, cred­i­ble steps to stim­u­late di­ver­si­fi­ca­tion of the econ­o­my.”

“You have to be pro­mot­ing new sec­tors in the econ­o­my. You have to head di­rect­ly to de­vel­op­ment of the pro­fes­sion­al ser­vices in­dus­try for ex­port, in­clud­ing your cre­ative in­dus­tries, ed­u­ca­tion, health care, fi­nan­cial ser­vices, wher­ev­er you could push ahead, you have to put those kinds of pro­grams in place to gen­er­ate the prof­its and the sur­plus that would un­der­write de­vel­op­ment of the econ­o­my.

“What you have to do if you are Trinidad and To­ba­go is learn the les­son that your com­par­a­tive ad­van­tage, fun­da­men­tal­ly, your high­est com­par­a­tive ad­van­tage lies in the cap­i­tal ser­vices, the pro­fes­sion­al ser­vices, the cre­ative in­dus­tries and so on and you have to re­form those.”