Can T&T afford another five years with Colm Imbert as Minister of Finance?
This must be one of the question that the electorate must consider and for which Prime Minister Dr Keith Rowley must tell the country. We have had a five-year period in which the Minister of Finance has failed to inspire confidence in the economy and presided over five years of consecutive decline.
To be sure, Minister Imbert met a challenging situation and there are many commentators who have only found their voices after 2015 as they remained silent when the last government wasted billions of dollars and ballooned the transfers and subsidies bill, while getting little or no economic growth in return.
Upon assuming the mantle for steering the country out of a challenging situation, to a new and sustainable path, Minister Imbert met an economy that—according to the Central Bank— had declined by 0.6 per cent in 2015. This decline came even after the Kamla Persad-Bissessar had spent a record $63 billion in 2015 even as crude prices had collapsed and natural gas production and prices were on their way down.
The last administration tried to spend its way back into government with major construction projects and even giveaways. Remember the short lived baby grant? So, it was always going to be a challenging assignment for the Member of Parliament for Diego Martin North East.
The minister also had some buffers in the Heritage and Stabilisation Fund that was now nearing US$6 billion, and healthy reserves in the Central Bank. But he also inherited an economy that was less competitive, had run deficits since 2008 and whose expenditure profile was just not sustainable.
The country’s main source of revenue, the energy sector, was in crisis and while the last government was able to have a successful deep-water bid round it had generally performed poorly in its management of this important sector.
Let’s look at the numbers.
When the People’s Partnership came into power in May 2010 the average monthly production was 101,909. By the time they left in 2015, the average production for that year was 78,656 barrels of oil per day. This means crude production under the PP declined by almost 23 per cent.
The natural gas production for 2010 averaged 4.3 billion standard cubic feet per day. By 2015 it was averaging 3.83 bcf/d or a fall of about 500mmscf/d or 11 per cent. So the numbers are clear!
You add to this the raiding of the NCG of billions of dollars, using it for political gain by having the organisation spend hundreds of millions of dollars on building grounds in UNC-controlled constituencies, a wast water treatment plant for WASA even as the then CEO of NGC was also chairman of WASA, and you get the stench of what Mr Imbert met.
From the time Dr Rowley appointed Imbert as Minister of Finance it raised eyebrows. After all he had no formal training in finance or economics and no track-record of managing a business, even though he had owned a construction company.
The Prime Minister dismissed the concerns saying the country had economists running its affairs and still ended up in a bad state. Not a very sound reason but the appointment but, as with everything and everyone else, Imbert deserved a chance.
The Minister of Finance was able to achieve two major things. He was able to stabilise the economy, albeit at a lower level of GDP than he met it and he was able to cut expenditure without sending home workers and causing riots in the streets. Remember how he boasted that he had raised the price of fuel three times and yet no one rioted and he felt that he would raise it again. Boasting with a smirk on his face about how he was able to inflict pain on the population.
The challenge with Mr Imbert and why regardless to which party comes into power is that the country cannot afford another five more years of this. He has done nothing to grow this economy. He has not shown any interest or imagination on how this country can move forward.
Imbert on Friday presented his last mid-year review and, as has now become par de course, the response has been one of concern for the authenticity of the numbers.
So much time has to be spent on fact-checking Mr Imbert’s numbers and statements—which he often makes as matter of fact and are nothing short of misinformation—that one can sometimes lose focus of the big picture.
Take, for example, his insistence on the natural gas numbers for 2019 to average 3.8 billion standard cubic feet per day. This column and other commentators challenged Minister Imbert on the numbers. As is his style, he dismissed it and of course the review of the economy then showed the extent to which the truth was bent.
It is why these growth forecast cannot be trusted and when we have come to the stage where we can no longer believe the minister’s numbers it must be either he has poor forecasting or he is definitely showing himself to misspeak all too often.
It should have been clear to the Prime Minister at least two years ago that he needed to find a new Finance Minister. The country needed someone who could build coalition with the business community. Someone who saw this economy as one that encouraged free enterprise and was not a centrally controlled and managed economy.
The Government has a major role to play, especially to ensure that market distortion does not leave the most vulnerable at the mercy of free enterprise. But, in so doing, government cannot crowd-out the private sector.
Where is the focus on new growth? This government is the first in the last 40 years to have gone through its five years in office and not attract a single major project. It has promised a lot like the aluminium projects or the Chinese backed industrial park and has failed to deliver.
Minister Imbert has failed to tackle big issues like pension reform so desperately needed in an ageing society.
He has not given us sense that he would come clean with the population and he has failed to deal with the central challenges of the country.
What we need is a technically sound Finance Minister, one with ideas of how we can build a sustainable economy and someone who sees the integrity of the numbers as being important.
What we need is a new Finance Minister!