Home' Trinidad and Tobago Guardian : April 13th 2017 Contents BG4 | COVER STORY
BUSINESS GUARDIAN guardian.co.tt APRIL 13 • 2017
fter years of increasing its
loan portfolio with the In-
Bank (IDB), the current ad-
ministration took a decision
last year to reduce its expo-
sure to the Washington DC-based institution
by close to US$170 million, says the IDB coun-
try representative in T&T, Tomas Bermudez.
Feeling the brunt of the cutback was the
flood alleviation programme, which was re-
duced from US$120 million to US$15 million,
while the IDB’s loan for healthcare improve-
ments was cut to US$48 million from US$110
million, Bermudez said in an interview earlier
The health-sector loan retained a focus on
non-communicable diseases, which he de-
scribed as an “epidemic” in the Caribbean
with “a significant cost for the economy.”
Part of the existing health-sector loan in-
volves the IDB working with schools and with
producers of soft drinks and other beverages
with high sugar content in order to change con-
sumption habits and improve the prevention
Questioned on whether the IDB played a
role in the decision by the Ministry of Health
to ban the sale of soft drinks with high sug-
ar content in government schools, the IDB
country representative said: “It is linked to
an initiative that we have been working with
the government on for the last two years. It is
part of a whole programme with the Ministry
of Health to address that.”
The reductions in its loans to T&T has left
the IDB with a portfolio of over US$500 million
in this country with US$147 million having
been disbursed already.
Among the projects for which the IDB has
lent T&T money are: the strengthening of the
Registrar General’s office (US$20 million); the
improvement of the financial management of
the government, including the installation of
a management information system (US$40
million) and a neighbourhood upgrade set-
tlement loan for US$40 million, which seeks
to improve the standard of living in some of
T&T’s squatter settlements.
There is also a US$25 million project aimed
at integrating the Single Electronic Window at
the country’s airports and Customs and Excise
division and an US$18 million global servic-
es project aimed at sharpening the country’s
competitive advantage in ICT.
Bermudez, who has been the country rep-
resentative in T&T since June 2015, said much
of his time here has been spent pruning the
IDB’s loan portfolio in T&T.
“My time here has been spent getting the
house in order because the IDB had more loans
than the country could chew on and we were
not executing them properly.
“I think we now have the elements of a pro-
gramme that is more aligned with what the
government wants to do and we are able to
implement the programme more effectively.”
The reduction in the IDB’s loan portfolio is
part of what Bermudez sees as the fiscal ad-
justment that T&T has been required to un-
dergo and for which he gives credit to Finance
Minister Colm Imbert.
“I would like to give credit to the fiscal ad-
justment that the government has undertaken.
And I give credit to Minister Imbert on that one
as well because I was looking at the numbers
for the adjustment last year and we are talk-
ing about an eight per cent reduction in public
spending in real terms.
“That has obviously had an impact on the
non-energy sector because of the spill-over
impact of government spending.
“But the challenge going forward is: how
do you keep this level of spending (about
$53 billion a year), while rotating the budget
away from transfers and subsidies to capital
Arguing that the government needs to avoid
the temptation of increasing transfers and
subsidies when the economy improves, the
Venezuela-born economist said the need to
increase capital expenditure is linked to the
need to reform the country’s state-owned
Bermudez says the IDB’s largest loan to T&T
involves US$296 million to improve waste-
water treatment plants in San Fernando and
in Maraval (US$246 million) and in Tobago
He said the Maraval plant should be com-
pleted this year, but the San Fernando facility
experienced a one-year delay.
One of the projects he would like to see the
IDB tackle in its new country strategy is to help
improve WASA as a company.
“If you look at how much WASA costs the
country, the numbers are staggering. I’m
talking about more than one per cent of GDP
in transfers to WASA. That’s not sustainable
Underlining the point that WASA is costing
T&T too much, he said the money spent on the
utility is money that can be used on schools
“At some point, politically, T&T is going to
have to do something with WASA because the
numbers are big.”
Asked whether the IDB shares the assess-
ment that WASA is overstaffed, he said: “Yes
definitely. We had an assessment done on
WASA and in terms of the number of workers
per water connections, the utility’s numbers
are way beyond international standards.”
He said the issue of the overstaffing at WASA
can be worked on in parallel with other reforms
at the utility but, at some point, the govern-
ment is going to need to make the utility more
“And that’s probably the reason that WASA
is so sensitive politically,” Bermudez said.
He said he would like the IDB to help in the
process of making WASA a more sustainable
company—similar to work that the institution
has done elsewhere in the region including Ja-
maica, Barbados and Panama.
There needs to be more of a focus on reducing
non-revenue water, metering and setting the
stage to start thinking about what the country
needs to do with water tariffs.
“Talking about increasing tariffs right now
without improving the service will be difficult.
WASA needs to make the service reliable before
it can start talking about tariffs.”
Ease of doing business
Bermudez says there are three things the
government can do to “move the needle in
terms of the competitiveness” of the local
economy: speedier registration of properties;
faster approval of construction projects and
the reform of the Customs and Excise Division.
“Those three things would give a compet-
itive boost to this economy and will also set
the base where it is needed, which is creating
an enabling environment for the private sector
to do what it needs to do.”
Bermudez said the local private sector is
among the most competitive in the Eng-
lish-speaking Caribbean, but is being held
back by regulatory restrictions, permits and
bureaucratic red tape.
“They can be competitive outside of the re-
gion,” said Bermudez, adding, “T&T has the
elements of private sector competitiveness, but
it needs to create an enabling environment for
the companies to be able to compete properly.”
Asked whether the IDB has a view on wheth-
er the exchange rate can contribute to the com-
petitiveness of the private sector, Bermudez
said for certain sectors the exchange rate is
not very favourable, citing the agri-business
sector, which would find it hard to compete
with the currency at the current level.
“At the same time, you have to balance that
against the impact that a depreciation would
cause,” noting that the government at least has
allowed a gradual adjustment of the exchange
rate with the depreciation limited to six to seven
per cent last year.
“Working on diversification and not having
a very competitive currency is one thing that
T&T will have to address.
“At the end, it is a balance between incen-
tivising the productive sector and protect-
ing the incomes of poor and middle-income
IDB country representative in T&T, Tomas Bermudez.
PHOTO: ABRAHAM DIAZ
Country head Tomas Bermudez:
Links Archive April 12th 2017 April 14th 2017 Navigation Previous Page Next Page