Moving T&T onto a sustainable economic growth path requires structural change. In the midterm review, the finance minister sought to put the best spin possible on the country’s short-term economic outlook for 2023, advocating the IMF’s growth projection without addressing the longer-term prospects.
He did not speak to the Government’s plans for the period 2024 and beyond. There was no mention of Vision 2030 or what benchmarks had been achieved in the rollout of that plan or if or how the plan was being rolled out. There were no announcements of new promising developments to come, not Dragon, not Manatee, and nothing of the refinery.
We heard nothing of the promising prospects facing NGC in the upcoming round of contract negotiations with petrochemical companies in Point Lisas. Perhaps he was being cautious not wanting to prejudice the negotiations. How is NGC going to address the current natural gas production shortages? What can it commit to in contract negotiations if it cannot guarantee a continuous supply? The energy minister did not say much to complement the IMF’s positive 2023 projection. The Central Bank Governor was cautious in his comments confirming the turnaround in 2021 and 2022 which was fuelling robust consumer demand in 2023.
The good news is that the unions are accepting the four per cent wage negotiation offer for public sector salaries, even if the PSA has not. This is a pragmatic outcome that has defused the drama associated with these long outstanding public sector salary negotiations. But salary increases must be funded and as expenditure claims mount, so will the deficit.
There are economic signposts. The Government’s increased revenue for 2021-23 is largely associated with the improvement in the “realised” energy prices reported by Minister Imbert. But the current trendline is negative, meaning that prices for ammonia, oil, and natural gas are in decline. On current evidence, this trend will continue. Therefore, policy initiatives must be designed to facilitate the notorious “d” word, diversification which the IMF report said was necessary. How can the Government assist in this regard? What changes does any administration undertake to facilitate the private sector in this process?
Governments provide the operating system that makes a society function. They control the permissions or licences, loosely called the “regulatory framework” which only a government can grant. A society operates more efficiently or less so depending on how well the system functions. For example, the transportation network ie, the roads, traffic lights, signage and the rules governing how that network is maintained is controlled by the Government. The vehicles to transport goods and services the country needs must be licenced, as must the drivers.
Similarly, births, marriage, and death certificates are the instruments that recognise our existence, and legal identity. Same for land registration, the physical and spatial plan rules govern where and how land should be developed and by what standards, or the underlying legal framework which facilitates all commercial transactions. Similarly, the justice system and policing methods can affect our lives in many ways. How easily we access those services is called “the ease of doing business” and how well those systems are administered affects how a society functions.
The more efficient these basic systems are, the more efficient the country. Slow or long response times drive up costs. This simple, but powerful framework, also determines a country’s capacity for growth. A country can only perform as well as these systems operate.
Systems just don’t happen. They must be designed, tested, implemented and maintained and developed to grow as a society grows. As society modernises, these systems must modernise as well. This brings us to the inevitability of digitalisation, the application of computer technology to everyday activities, like applying for passports, trade or import licences, paying taxes or fines online or simply registering companies and directors.
In short, governmental digitalisation efforts can have a huge impact on commercial or individual operations. In this regard, we tend to think of “government” as one and assume these modernisation efforts will be pervasive, harmonised, and evenly handled. That is impossible as different systems are run by different ministries that operate as silos. One exception is the operation of the TTBizLink, the T&T trade and business information portal, a single electronic window. This system links several different ministries which are critical in facilitating the trade process; the Ministries of Trade, National Security, Agriculture, Health, and of course the Ministry of Finance.
This “single electronic window” has greatly facilitated the trade process and a new improved version will be released shortly. Its greatest weakness is that the Customs and Excise Division of the Ministry of Finance remains stubbornly “unintegrated” with the SEW after ten years, thus reducing the value of the system and limiting its overall effectiveness. This exemplifies the complexity of “government” and the difficulty of having a whole-of-government approach.
This in part explains why digitalisation across various government departments has been such a patchy experience. Recent experience at the corporate registry at the Ministry of Legal Affairs is a salient example of this difficulty. In the process of completing routine annual returns, company directors are required to take a photograph with their ID next to their faces.
Are we in the 21st century yet?
Mariano Browne is the CEO of the Arthur Lok Jack Global School of Business