My dear moth­er used to say: “If wish­es were hors­es, beg­gars would ride.” It was her way of say­ing you can’t avoid deal­ing with re­al­i­ty.

In prepar­ing an an­nu­al bud­get for a small econ­o­my like Trinidad and To­ba­go for fis­cal 2027, the Gov­ern­ment must take in­to ac­count the boom and bust cy­cles our coun­try has al­ready lived through; should con­sid­er the man­ner in which en­er­gy rev­enue has been sub­si­dis­ing al­most every­thing for decades; should ap­pre­ci­ate the con­se­quences of less than pru­dent man­age­ment in the ten years pri­or; must un­der­stand that while the coun­try is wait­ing on cross-bor­der nat­ur­al gas pro­duc­tion and rev­enues, it needs to fo­cus ur­gent­ly on non-en­er­gy in­vest­ments to cre­ate jobs and in­crease ex­ports while we wait.

Fis­cal ef­fi­cien­cy on the one hand and a tar­get­ed set of eco­nom­ic trans­for­ma­tion mea­sures on the oth­er, done to­geth­er, are what is re­quired.

If Gov­ern­ment fo­cus­es on re­duc­ing ex­pen­di­ture alone, the re­sult could be eco­nom­ic con­trac­tion. If it fo­cus­es on in­creas­ing ex­pen­di­ture to stim­u­late growth alone, the debt bur­den will in­crease, as will pres­sure on the ex­change rate.

But the Gov­ern­ment could si­mul­ta­ne­ous­ly in­vest in mea­sures that re­duce the cost of do­ing busi­ness, as well as un­lock pri­vate sec­tor com­pet­i­tive­ness. For ex­am­ple, port ef­fec­tive­ness, dig­i­tal in­fra­struc­ture and re­new­able en­er­gy could prompt a much-need­ed pri­vate sec­tor push.

It could si­mul­ta­ne­ous­ly re­duce tax­pay­er fund­ing of State en­ter­pris­es and tar­get elim­i­na­tion of so­cial trans­fers that are mis­aligned. All of these things done to­geth­er could re­duce ex­pen­di­ture, fo­cus ex­pen­di­ture on pro­duc­tive en­deav­ours and stim­u­late the econ­o­my by giv­ing pos­i­tive sig­nals that prompt the pri­vate sec­tor to in­vest.

Rev­enue short­age and deficits are re­al prob­lems. The Gov­ern­ment can­not gov­ern with­out rev­enue and cash flow. New in­vest­ments, prof­itable en­ter­pris­es and more jobs all in­crease the tax base. And deficits can­not con­tin­ue in­def­i­nite­ly. It in­creas­es debt and bor­row­ing costs, de­pletes forex, im­ports in­fla­tion and puts more pres­sure on the ex­change rate. In­vestors then be­come wary.

Gov­ern­ment should fo­cus its in­dus­tri­al de­vel­op­ment pol­i­cy on the trade­able sec­tors like light man­u­fac­tur­ing, tourism, es­pe­cial­ly eco-tourism, high-val­ue agri­cul­ture and ex­port ser­vices, be­gin­ning with links to re­gion­al en­er­gy. All of these will stim­u­late forex gen­er­a­tion, help to sta­b­lise bal­ance of pay­ments and broad­en the do­mes­tic tax base. Gov­ern­ment could al­so si­mul­ta­ne­ous­ly mod­ernise the tax ad­min­is­tra­tion de­ci­sive­ly, elim­i­nate tax loop­holes and widen the tax net.

For in­vest­ment, Gov­ern­ment could cre­ative­ly fund na­tion­al in­fra­struc­ture projects with­out ex­pan­sion of pub­lic debt by mo­bil­is­ing pri­vate and blend­ed cap­i­tal through pub­lic-pri­vate part­ner­ships. They could al­so use mul­ti-lat­er­al de­vel­op­ment bank guar­an­tees and fund­ing to sup­port these.

The Gov­ern­ment re­al­ly needs to es­tab­lish a medi­um-term fis­cal frame­work to put a cap on re­cur­rent ex­pen­di­ture growth, to sig­nal fis­cal re­spon­si­bil­i­ty to in­ter­na­tion­al mar­kets and should spend some qual­i­ty time re­duc­ing the cost of sov­er­eign debt.

And as point­ed out in this space two Thurs­days ago, the fo­cus should be on bring­ing non-en­er­gy in­vest­ments and grow­ing ex­ports. That is the task—along with re­duc­ing im­ports, gen­er­at­ing rev­enue and con­tain­ing debt and debt ser­vic­ing costs.

The Gov­ern­ment has some irons in the fire al­ready. The steel plant in­vest­ment, da­ta cen­tres, oil re­fin­ery and pos­i­tive ac­tion on yacht­ing. It would be good if the bud­get could bring some or all of these to clear progress. Se­cur­ing the funds for the var­i­ous union wage in­crease pay­outs re­mains a chal­lenge.

It would be great if we could wish or dream for cross bor­der gas and deep­wa­ter/ul­tra deep-wa­ter gas to yield, say, eight bil­lion cu ft per day and make this come true! That will meet all our re­quire­ments and we will have nat­ur­al gas to spare, al­most dou­ble our needs. We could even then think of At­lantic Train 1 for a time!

But that is just a nice dream. The chal­lenge is to build and sus­tain our econ­o­my with the lim­it­ed 2.3 bil­lion cu­bic feet of nat­ur­al gas that we have now. The clo­sure of Nu­trien on Mon­day shows this is not an easy road. So, we must do what we must un­til new gas be­gins to flow. The im­me­di­ate task is to se­cure non-en­er­gy in­vest­ments to di­ver­si­fy faster, grow ex­ports, con­tain ex­pen­di­ture, re­duce sub­si­dies and strength­en the econ­o­my out­side en­er­gy pur­pose­ful­ly, un­til new nat­ur­al gas be­gins to pro­vide re­lief.

When you are be­tween a rock and a hard place, but you know it will not last for­ev­er, it is bet­ter to do the right things for eco­nom­ic vi­a­bil­i­ty and sus­tain­abil­i­ty. Be­cause par­ti­san pol­i­tics will not rest, but re­lief will even­tu­al­ly come and sound eco­nom­ic choic­es and cre­ativ­i­ty can make all the dif­fer­ence in the world.