Home' Trinidad and Tobago Guardian : December 28th 2014 Contents A5
December 28, 2014 www.guardian.co.tt Sunday Guardian
CHARLES KONG SOO
If government spending is left unchecked
against a backdrop of falling oil prices and
calls for fiscal cutbacks, the country could
face dire consequences, two of them being
major shortfalls in revenue and the deval-
uation of the T&T dollar.
This was the warning coming from four
economists, Dr Lester Henry, Dr Ronald
Ramkissoon, Mary King and Dr Roger Hosein,
who questioned whether the Government
had a plan for revenue generation other than
gas and oil.
Global oil prices has reached US$60 a bar-
rel. President Anthony Carmona cancelled
four functions for the Christmas season,
Petrotrin cancelled its Christmas function,
and the Sport Ministry also postponed its
awards ceremony, following Finance Minister
Larry Howai s mandate to ministries to cut
back on expenditure by $45 million.
Prime Minister Kamla Persad-Bissessar
has distributed thousands of dollars in toys
to children across the country, disbursed $55
million to churches, $2 million for Sparrow s
museum, left the allocation for Carnival
unchanged, increased PSA wages by 13 per
cent, and increased teachers wages by 14
Henry: Complete lack of leadership
Speaking to the Sunday Guardian last week,
Henry said, "There seems to be a disconnect
with the Prime Minister and the Govern-
"She seems to have her own plan that is
different from the President and others and
as far as she is concerned, that doesn t have
anything to do with her.
"Howai is calling for fiscal management,
cutbacks and belt tightening. You see mixed
messages or two separate signals coming
"They re not going to belt tighten too
much, however, in the run-up to elections.
They haven t been able to do it in four and
a half years and they re not going to do it
"The Government was spending on oil and
gas prices that were higher than average and
other than that it had no other plan."
When asked what was his opinion on Per-
sad-Bissessar s leadership in this time of eco-
nomic crisis and in the light of the uncertainty
over unstable oil prices, he replied that there
was a complete lack of leadership in the face
of the many serious issues that would con-
front the country in the next six months.
Henry said if the price of oil continued to
fall over the next few months, T&T would
face major shortfalls in revenue.
He said the Government had signalled
that it planned to borrow and use revenue
generated from the sales of state assets such
as Phoenix Park to raise $1.5 billion, to make
up for the budget shortfall, regardless of the
Henry said the lack of revenue-generation
policies would come back to haunt them.
Govt caught between a rock and a hard
place; elections and falling income
Ramkissoon, meanwhile, said the Govern-
ment and country were caught between an
election on one hand and falling income on
the other, and falling income necessitated
certain strategic measures including cost cut-
He said a fall in energy prices and income
meant certain hard measures had to be taken
that were, however, in the best long-term
interests of the country.
Ramkissoon said the democratic system
required that elections be held before Sep-
tember 2015 which placed the Government
in a dilemma since it would wish to win
another term in office.
He said on one hand, what the population
was seeing from Persad-Bissessar were ini-
tiatives to secure an election victory, but what
was also required were measures to cut back
and adjust to falling income, as Howai had
Ramkissoon said there appeared to be a
divergence in the pronouncements of Howai
He said mixed messages were coming from
the Prime Minister at a time when strong
leadership in terms of fiscal management
were required, and that could cause the Gov-
ernment to lose the election.
Ramkissoon said the situation was not
unique with this administration, albeit it was
a contentious issue.
He said we could think back to 1986 when
there was a similar predicament where oil
income had been falling for several years and
hard decisions had to be taken.
Ramkissoon said the government of the
day hesitated to make the deep kinds of cuts
that were necessary and the country saw a
new government, the NAR administration,
coming into office and having to make serious
cuts and adjustments over its entire five-
He said the citizenry could run but could
not hide from falling income.
Ramkissoon said the wage increases, grants
and giveaways seemed to be really with the
elections in mind rather than any action to
deal with the economic difficulties which
the country faced.
He said strong leadership was very critical
at this time and could mean the difference
between success or failure at the polls.
Mary King: Govt think its prudent to
revive the local economy by spending
King said the Government came into office
just after a global economic collapse due to
oil hitting a price of US$147 per barrel and
natural gas US$14 per thousand cubic feet,
a situation aggravated by the subprime mort-
She said as the world struggled to recover,
the Government thought it prudent to try to
revive the local economy by spending.
King said the world was in recession and
many were now predicting a double-dip
recession, especially for T&T since both oil
and gas prices had collapsed and as a result
local economic activity was reduced.
King said oil production had fallen to the
lowest ever and the country had been unable
to meet the demand for gas from the Pt Lisas
processors for three years in a row.
Hosein: PM should have trimmed
some Carnival expenses
Hosein said the decision to cancel four
Christmas functions given by the Office of
the President was well-received and provided
sound leadership from a top office.
He said from this perspective, perhaps the
Prime Minister should have marginally cut
some of the Carnival-related expenses, if
only by five per cent, to send a signal indi-
cating a "new normal" as it concerns gov-
Hosein said perhaps these signals would
be evident in other activities later in the year,
as indeed the country needed to acknowledge
that resource flows from the main hydrocar-
bon sector were not where they should be
nor were they likely to be in the medium
Economists say strong leadership critical at this time...
Cut back, adjust to falling incomes
GML SPREADS JOY IN GRANDE
Fredricka Rampersad, 16, left, and sister Laurie Rampersad, eight, look on as Faith Rampersad, four, opens her christmas gift from
Guardian Media Ltd's editorial department at the family home in Vega De Oropouche, Sangre Grande, on Boxing Day. PHOTO: ABRAHAM DIAZ
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