Minister in the Ministry of Finance, Brian Manning MP, says Government must use every economic tool at its disposal—including the Heritage and Stabilisation Fund (HSF)—to minimise hardships citizens may face during challenging times, such as the current COVID-19 pandemic.
In an official statement issued today, Minister Manning sought to clear up confusion concerning how, why and when Government should use the HSF, in order to shore up the country’s economic fortunes.
The Minister was responding to criticism levelled at the Government recently by an economist, who asserted that “the HSF was not designed to defend the exchange rate”.
The full text of the Minister’s statement, follows…
MEDIA RELEASE BY MINISTER IN THE MINISTRY OF FINANCE, BRIAN MANNING MP
As Minister in the Ministry of Finance, one of my responsibilities is managing matters involving the Heritage and Stabilisation Fund (HSF). I took note of comments last week where one economist authoritatively stated that the HSF was not designed to defend the exchange rate, and then went on to purport the ability to predict the future. This conclusion is incorrect and even hyperbolic in its definitiveness. It would be untenable for economists to make unsubstantiated public predictions which could negatively affect investor sentiment and precipitate the very crisis they claim to want to avert.
The HSF, above all, has the purpose of stabilising the country’s economy through diversification and the generation of wealth for future generations. It is designed to smooth government fiscal expenditure in times of boom and bust to mitigate the negative economic and social impacts of both events. During times of boom, excessive government expenditure can lead to inflation, overheating of the economy and Dutch disease, causing a host of economic and social ills. On the other hand, during economic downturns, the HSF can be used to bolster government spending in an effort to improve the lives of all our citizens and maintain the overall economy on an even keel.
It is public knowledge that the government has been employing various fiscal and monetary economic strategies to manage our exchange rate and to ensure that citizens are no burdened by the hardship that could come from the implementation of alternative methods. Employing the resources of the HSF is but one of those myriad strategies. Government has also been investing in the earning capacity of our country, with special emphasis on improving our ease of doing business, in an effort to increase economic activity and attract foreign direct investment. Multiple government agencies are actively engaged in endeavours designed to generate foreign exchange. This was exhaustively explained over the last few weeks during the national budget presentation.
These are unprecedented times and our economy has been bruised and battered by a collapse in global economic activity during a deadly pandemic. The HSF is being employed in a manner that best protects the people of Trinidad and Tobago while our digitisation, diversification and investment efforts take shape to eventually bear fruit. These uniquely challenging times inexorably call for creative and thoughtful solutions; it is in the best interest of the people Trinidad and Tobago that government use every economic tool at its disposal to minimise hardship and maintain an acceptable standard of living for all. The government will continue to operate in the best interest of the people of Trinidad and Tobago.
Hon. Brian Manning
Minister in the Ministry of Finance