Minister of Finance, Colm Imbert MP.

Finance Minister Colm Imbert is set to present to 2022 budget in the next few days which will seek to do the impossible, that of a tight control on expenditure while at the same time trying to truly begin the transformation of the country’s economy.

In some ways Minister Imbert is being asked to carry a burden that should not be his to bear, as the role of economic transformation is for the entire Cabinet with the Minister of Planning coordinating if not leading the charge.

As the late Lloyd Best often reminded us, the Minister of Finance is more of an accountant/book keeper whose job it is to balance the books by looking at issues of revenue and expenditure.

If we take that into account that Mr Imbert’s task gets a little clearer and easier. He has to do a few things in his budget on Monday.

The first thing is he has to account for the performance of the economy over the last year. Since the days of Larry Howai there appears to be a reluctance to account for the performance of the economy in the preceding year, an account of where we failed, where we succeeded and therefore we avoid the usual rehash of projects that never actually come to fruition.

Imbert must lay out a clear and compelling argument for the state of the economy and how he intends to finance the fiscal measures that he plans to implement.

I am sure the Minister will blame the challenges we are facing squarely on the ongoing pandemic but he must be warned that the population will see straight through such verbose.

Of course the black swan event called the Covid-19 pandemic has had a deleterious effect on the economy.

The shutting down of many sectors, the resulting unemployment and loss of revenue, the lack of certainty that is so important for investing and the need to increase expenditure in health care and with revenues down and expenditure increased in some areas there is no doubt that the country had to increase its borrowing and therefore its debt to GDP ratio.

But the Minister of Finance and moreso the Keith Rowley administration cannot get away from completely mishandling the economy from 2015 to 2020 while all the time kicking and screaming that it is the Opposition United National Congress to blame.

It is analogous to being in a marriage with one party blaming the challenges they are facing on what happened with the ex.

There is no doubt that the UNC left the country exposed, they continued and hastened the spending of the windfall received from the energy sector while not doing enough to ensure the very sector’s sustenance.

The Kamla Persad-Bissessar administration mismanaged many of the State enterprises and the stench of corruption pervaded governance and government. But that was almost seven years ago and to have blamed the UNC for our predicament for five years was a waste of time and a classic case of deflection from the government’s own failings.

The misreading of the woes of the energy sector is the reason the Finance Minister in a high-priced energy environment cannot come to the country and talk about a windfall from the energy sector this year.

In case we have not been following the international energy situation closely, crude prices have for the first nine months of the financial year average US $58 a barrel and natural gas prices and petrochemical prices are the strongest they have been in years. Yes this is a relatively high priced environment.

Where we are failing is in our production profile.

The Government says the right things but seem to suffer from paralysis analysis, cannot implement the necessary measures. For six years it has had one failed near-shore bid round.

It has promised three bid rounds and the Minister of Energy/Minister of Everything, Stuart Young has failed to deliver just as his predecessor, the late Franklin Khan.

Instead what we have seen is a government preoccupied with trying to broker a deal on Atlantic LNG Train 1 with no gas available to it and trying to blame everyone but themselves for throwing away half a billion dollars on that and another ill fated NGC project.

In case Mr Imbert is prepared to listen, I want to suggest that as a matter of priority the Government should work closely with the multinationals to increase oil and gas production and get the three bid rounds going.

I have it from good sources that all the technical work is done for the bid rounds and its the political directorate that is keeping back the process. Do your jobs please!

On the issue of the debt, I take the argument espoused by the likes of Mary King that one way to deal with it is to get growth levels higher that the cost of capital.

That is to say if GDP is growing by 6 per cent and you are borrowing at 5 per cent you are fine. The challenge is the structure of the economy is such that those growth rates are unlikely if you do not have a stable economy.

In any case the problem this country has is far more on the expenditure side of the economy and less so on the revenue side.

During the 1994/2014 period we were able to mask a lot of the inefficient spending based on revenue inflows. It meant rather than using the extra money to finally fix flooding in Port-of-Spain or redo the entire WASA system we spent it on corruption, on transfers and subsidies to non-performing state enterprises and poorly-targeted make work and poverty reduction schemes.

Minister, if I were you I would have every Ministry do an audit of its spending patterns and determine if we are getting value for money and what we have to do to make it more efficient.

Let me give you a simple example. We pay $300 for a return flight to Tobago. Can anyone who is reasonable not accept that the break-even fare that we understand is $500 should be paid? What is the reason we are not prepared to have people pay the economic price of a ticket between Trinidad and Tobago or even $100 on the ferry for a return ticket?

An airline is not a maxi taxi ride. There are costs and we must be prepared to live within our means.

The need to get the expenditure side right does not negate the need for measures like the return of the property tax or the Revenue Authority. But even in doing this it cannot be just the collection of additional revenue.

We have to get a clear legislative commitment about how these revenues are to be spent in local government or we end up having even more distrust in government and taxation.

A lot has been said about the performance of the public service and we all know it is bloated, that we need to reduce the size but that it is not a numbers game it is about re-imaging how a public service should serve our needs with high quality, well trained and well compensated individuals.

Mr Imbert, your task is not easy and you will get the blame for all the woes in this economy. But where is the Prime Minister in all of this and where is his Planning Minister?

I will say though the Tourism Minister seems to be making some positive moves and we are beginning to see the first fruit of the work of the Minister of Agriculture while the Trade and Works Ministers remains active.

Maybe the rest will joining in the hard work.

Curtis Williams is fully vaccinated and awaiting the opening of the safe zones.