Joel Julien

joel.julien@guardian.co.tt

“I do not en­vy the task that be­falls the Min­is­ter of Fi­nance.”

This was the com­ment made by for­mer en­er­gy min­is­ter Kevin Ram­nar­ine on his Face­book page yes­ter­day, as he lament­ed the dif­fi­cul­ty fac­ing Fi­nance Min­is­ter Colm Im­bert ahead of the 2021 Na­tion­al Bud­get at the House of Rep­re­sen­ta­tives on Oc­to­ber 5.

“The se­ri­ous­ness of the 2021 bud­get and the task that be­falls the Min­is­ter of Fi­nance and his pub­lic ser­vants must not be un­der­es­ti­mat­ed. In times of cri­sis, great na­tions pull to­geth­er like Japan did af­ter World War II,” Ram­nar­ine stat­ed.

As a re­sult Ram­nar­ine, said now is the time for the coun­try to come to­geth­er to face the chal­lenges.

“This is not a time for po­lit­i­cal pos­tur­ing or im­ma­ture pol­i­tics. This mo­ment in our his­to­ry calls for us to rise above the caul­dron of pol­i­tics and work to­geth­er to steer the ship of state away from the brink. The coun­try is fac­ing se­ri­ous eco­nom­ic con­di­tions made more pro­tract­ed by the COVID-19 pan­dem­ic,” Ram­nar­ine stat­ed.

“Our GDP has con­tract­ed by 10 per cent in 2020 (the biggest an­nu­al con­trac­tion since 1983), our in­dus­tri­al base has tak­en a big hit and our rev­enue is like­ly to be around $32 bil­lion or 45 per cent less than 2014’s fig­ure. We can­not af­ford the lifestyle we once did. There will be pain and any­one who says oth­er­wise is be­ing po­lit­i­cal at a time when eco­nom­ics must trump pol­i­tics.” He added, “What must we do? It can­not be busi­ness as usu­al in Trinidad and To­ba­go. We can­not kick the can down the road and hope for en­er­gy prices to re­cov­er. At the same time, we can­not take de­ci­sions that will cause hurt to the most vul­ner­a­ble. There must be bal­ance at a time when find­ing bal­ance is hard.” Econ­o­mist Dr Mar­lene Attzs said the bud­get will have a “num­ber of in­ter­cept­ing is­sues that are go­ing to have to be care­ful­ly man­aged.”

The great­est chal­lenge fac­ing Im­bert, Attzs said, is bal­anc­ing ex­pen­di­ture in the face of de­clin­ing rev­enue from tra­di­tion­al sources.

“One of the things that the Gov­ern­ment is prob­a­bly go­ing to have to pay at­ten­tion to in the bud­get is look­ing at its lev­el of ex­pen­di­ture. Gov­ern­ment has boast­ed that it has not had to lay off any pub­lic sec­tor work­ers but the re­al­i­ty is that we have had de­clin­ing rev­enue and some­thing is go­ing to have to give in terms of ex­pen­di­ture,” Attzs said.

She said de­val­u­a­tion may al­so be an is­sue to ad­dress.

“The econ­o­mists have been say­ing for a long time that we have this man­aged float and it may be bet­ter to put the ex­change rate clos­er to some­thing like 10:1. Now that has two im­pli­ca­tions, one is it can serve as a fil­lip for the man­u­fac­tur­ing sec­tor, mean­ing it can give the man­u­fac­tur­ing sec­tor a boost to pro­duce more for the ex­port mar­ket be­cause it means our ex­ports are go­ing to be cheap­er et cetera. The catch of that, of course, is that we im­port some of the in­puts in­to the man­u­fac­tur­ing sec­tor, so the net im­pact may not be as pos­i­tive in terms of the im­pact on the man­u­fac­tur­ing sec­tor,” she said.

“But more im­por­tant­ly from a so­cial per­spec­tive, a lot of what we con­sume in Trinidad and To­ba­go, in­clud­ing ba­sic things like med­ica­tion, for ex­am­ple, is im­port­ed, so de­pre­ci­a­tion of the ex­change rate means an al­most im­me­di­ate im­pact on per­sons who de­pend on things like med­ica­tion. Now we all eat im­port­ed food but there is go­ing to be an im­me­di­ate im­pact on the prices of these goods that we im­port and we con­sume and that is go­ing to af­fect the peo­ple who can ill af­ford to be af­fect­ed by it.” Im­bert will al­so have to deal with the is­sue of ex­pen­di­ture con­cern­ing the COVID-19 pan­dem­ic go­ing for­ward, she said.

“We know that COVID is go­ing to be with us for some time to come and there is go­ing to be a need for ex­pen­di­ture for the health sec­tor. So with­in the con­fines of the fis­cal space, the gov­ern­ment now has to de­cide from where it is go­ing to get fund­ing to sup­port the health sec­tor and the ed­u­ca­tion sec­tor,” Attzs said.

Attzs said while a call has been made for cor­po­rate T&T to sup­port the ed­u­ca­tion sec­tor, the Gov­ern­ment will al­so have to “dig deep” to en­sure the most vul­ner­a­ble are giv­en a fight­ing chance to ac­cess ba­sic ed­u­ca­tion.

“And then there is an­oth­er ele­phant in the room, the ex­tent to which the Gov­ern­ment can go out on to the mar­ket and bor­row. You have to man­age your debt to GDP ra­tio,” she said.

“It is re­al­ly go­ing to be a com­bi­na­tion of is­sues that the Min­is­ter of Fi­nance is go­ing to have to face at a very del­i­cate time in Trinidad and To­ba­go’s eco­nom­ic space, where we are try­ing to live off of de­clin­ing rev­enues but we al­so have to try and man­age some ex­pec­ta­tions in terms of those lev­els of ex­pen­di­ture that the Gov­ern­ment has en­gaged in over the last cou­ple of years.”