Home' Trinidad and Tobago Guardian : September 17th 2015 Contents SEPTEMBER 17 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
VERBATIM | BG9
Minister of Finance Colm Imbert is being
advised to peg the 2015/2016 budget on
a US$40 to US$45 a barrel for crude oil
and to rein in expenditure.
The advice comes from economist Dr Ronald Ramkisson
who told the Business Guardian that the country cannot to
continue running large deficits and there is an urgent need to
Minister Imbert is expected to present the first budget of
the new PNM administration by the end of September and
it comes at a time when the Central Bank has revealed that
the country s economy has contracted and that there has been
a 3.3 per cent fall in output from the crucial energy sector.
More than that, the budget is also to be read at a time of
weak commodity prices with crude oil hovering around US$40
a barrel down from an average of US$110 for the period 2010
to 2014 and natural gas prices trending lower in all markets.
In addition, the Government will have to grapple with oil pro-
duction which is down 20 per cent from the last time the
PNM was in government and natural gas production that is
also down by an average of 400 mmcf/d.
Dr Ramkisson said: "In the short to medium term, the
country should not expect any significant growth and the
Government should not seek to propel this by an expansion
of public spending. Instead, the Government should concentrate
on reducing the wastage, increase productivity and spend on
productive capacity as a means of driving growth."
During its time in office, the Kamla Persad-Bissessar admin-
istration increased the annual budget by more than $12 billiion
while, at the same time, significantly increasing the country s
public debt and increasing transfers and subsidies which moved
from just over 40 per cent of the country s national budget
in 2010 to 60 per cent by 2015.
Dr Ramkision said it is because of increase in transfers and
subsidies, and its share of the public expenditure, he is cautioning
about the country s expenditure profile. Admitting that the
country had experienced little growth in the last five years
despite the last government s expansionary fiscal policy, Dr
"It is for that reason we should not increase expenditure
and should concentrate on efficiency. We should ensure we
are getting the most for our expenditure. You see what we did
was use the surplus of the energy sector to fund the non-oil
deficit and the growth we got from that sector was not enough
to compensate for the decline in the energy sector."
In a telephone interview on Tuesday, the economist said
there is a need to have some incremental increase in oil and
gas production. He suggested that the farming out of additional
acreage to the private sector and the urgent development of
smaller pools of natural gas could bring some growth in the
He said before the Government embarks on new projects
it will also have to review the number of projects started under
the last government and assess the extent of the country s lia-
bilities because it is going to be difficult for the Government
to get out of some contracts.
Dr Ramkisson argued that the country had to ensure it "got
the right people in the right places" to manage the country s
On the issue of the fuel subsidy, the economist said there
must be a relationship between the international price of oil
and what consumers in T&T pay. He said while the Govern-
ment s liabilities will be reduced with lower oil prices, the
reality is that people need to pay a price that is more reflective
of the actual price of gasoline. He said this will have a dual
purpose, that of reducing expenditure and having fewer vehicles
on the road.
The economist agreed that the Government has to continue
spending money on a social safety net and on crime but is
urging the Rowley administration to ensure more of the spending
On the issue of GATE, Dr Ramkisson said the country has
to honestly decide if it can afford GATE for everyone. "There
are some people who can contribute to paying for their higher
education and must be asked to do so. In addition, we have
to ask if GATE should be extended to all subject areas? There
may be some areas where we will have to say, at this time,
the country cannot afford to fund but may do so when things
"No one can argue about investing in education and the
development of the human capital but it just might be that
we don t have the money at this time to do it."
Economist's advice for Finance Minister:
Peg budget to
US$40-$45 for crude
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