If T&T returns to the International Monetary Fund (IMF), this could actually help T&T’s economy, according to former NAR finance minister Selby Wilson.
Wilson was the finance minister during the NAR Government of the late 1980s which took the decision to go to the IMF to help the country to climb out of the deep recession of that era.
Under the Wilson, T&T’s economy also returned to growth in 1990, after almost a decade of no Gross Domestic Product (GDP) growth.
“This whole talk of we are not going to the IMF as if the IMF is some big bad wolf is nonsense,” he said via conferencing in a programme on Friday night on CNC3 hosted by CNC3’s Hema Ramkissoon.
The discussion of the programme involved what kind of strategies the country can take to deal with the economic problems caused by the COVID-19 pandemic.
Wilson said the IMF was set up to help countries with balance of payment support and countries can access funds from the IMF with conditionalities or without them.
“I liken the fund to being a big sou sou, if you put money into it you can draw your hand when you are required to do it. The fund can be accessed for stabilisation purposes when you need to stabilise the economy.”
He does not believe that returning to the IMF is inevitable but said it was the decision of the Government to take this action.
Economist Marla Dukharan, who also spoke during the discussion via video conferencing, agreed with Wilson that countries partnering with the IMF can be beneficial and help stabilise the economy.
She said that there are two reasons that countries go to the IMF–these are when they have no money to pay their debts and when a country does not have enough foreign exchange to cover their imports and other basic needs.
She also warned that the country can run into “severe social” problems if the Government does not take the necessary action to feed people and keep them employed.
At the moment, she said, T&T has US $6.6. billion in foreign reserves which are about six to seven months of import cover and it is the lowest level of reserves the country has had in 13 years.
“By about 2021, we are going to run out of the foreign exchange to cover our obligations.”
Jerome Borde, president, the Automotive Dealers Association of T&T (ADATT), who also spoke via video conferencing to CNC3, said that it was important that the economy begins to be re-open but it must be done in a safe way. He said his association members are ready to come up with solutions to help solve the industry and country’s problems.
“We are hugely equipped and ready to operate in the morning. That is why we formed the measuring committee. We can ill afford to open in the morning and be part of a COVID-19 spread again.”
Reporter: Raphael John-Lall