That was the consensus of the economic experts who took part in Friday night’s virtual conversation: “A Hard Look at the Macro-Economy in 2022 and Beyond” put on by The University of the West Indies (The UWI) Trade and Economic Development Unit. Economist Dr Roger Hosein, former finance minister Karen Tesheira, former energy minister Kevin Ramnarine and and former planning minister, Dr Bhoe Tewarie spoke on the forum.
Tewarie said the only hope of bettering the economy is through food self-sufficiency, bringing crime under control, implementing measures to stimulate the economy and addressing the technological direction in which the world is headed.
“There is no way the Government could say they don’t know the facts. The facts didn’t just fall out of the air. They are there for all to see and understand and make sense of, and if we are making bad decisions, it is because the Government is choosing to do so in spite of the information that is available and that is really something that cannot be forgiven.
Tewarie added, “If you know what the facts are, the information is available, you know the challenges the country is facing, you know the prospects when you look at a worst-case, best-case scenario and you continue to make the wrong decisions and make choices that continue to be wrong for the country, the society, the economy, then you cannot be forgiven for that,” Tewarie said.
Former finance minister Karen Tesheira said T&T’s private sector is not doing its part to revitalise or to improve the economic situation in this country.
“What has the private sector really done? Were it not for the government, we would not have a Point Lisas Industrial Estate and that is a fact. Were it not for the government again taking the initiative and getting foreign investors like the Shells and bpTTs, we would not have Atlantic LNG and that is a fact. That’s because the private sector seems to only want to concentrate on finance and insurance, and this was a major issue.
Tesheira said the private sector is not taking any risks.
“What has the private sector been investing in? We have a lot of work to do with private investors because they have to take some responsibility for the economy. When I look at some private sector interventions like PowerGen it was with an international company. The only one that I saw was Desalcott but it was 40 per cent owned with General Electric, so what has the local private sector contributed? I do not accept the argument that they are crowded out. They choose to be crowded and go into safe havens where they don’t take risks, and what they do is draw down on our foreign exchange reserves.
Tesheira said food imports are a major problem for inflation. “The inflation for food is eight per cent. They are buying and selling and the businesses that they own are certainly not businesses that encourage productivity in the country and provide significant wages to the workers. So their contribution has been to take the safe route and let the government take the risks, and in fact, draw down on foreign exchange to increase imports, and have a number of our citizens living on direct subsidies, which is about $10 billion. I consider them to be more of a hindrance to the development of our economy than otherwise,” Tesheira said.
She further stated that while there are a series of initiatives that the Government could establish, implementation remains an issue.
“The Government should establish an apprenticeship programme in a serious way from farm to table development of a real agro industry just as they did with natural gas. There are so many opportunities in the agro industry for export, for food security and a reduction on our food import bill.
She added, “Cultural tourism is our competitive advantage and it can dovetail very well with agro and agro industry as well as community development. We need to set up a cultural centre at the Queen’s Park Savannah and in the South and let trained people become micro-enterprises so they can contribute to the country. There is a lack of confidence and trust that we earned with nothing being implemented. The Government has earned a lack of confidence and trust,” Tesheira said.
‘Lack of transparency’
Ramnarine pointed out that the Government has not released a Heritage and Stabilisation Fund investment report for the first quarter of 2022, which could be a sign that there is no good news in the report.
“Maybe that is a piece of bad news that the Government doesn’t want to share. The price of oil, as we speak. The price of crude oil fell into the 70s. I expect that prices will continue to fall because the Western European countries are tripping into recession. The United States economy contracted in the second quarter of 2022 and the Chinese continued to have these very extreme Covid-19 measures. Of the major economies of the world, only India is showing dynamism and life.
“Today there was an announcement that bp had sanctioned Cypre, but my understanding is that this volume of gas, in the grand scheme of things, is not going to be enough to help us come out of the hole that we are in,” Ramnarine said.
Ramnarine said the Finance Minister’s oil and gas forecasts have fallen significantly short. “Oil production continues to be worrisome. Oil is averaging 59,000 barrels per day as at the end of August. The minister of finance predicted in his last budget that it would reach 86,000, but that has clearly been missed by a significant margin, owing to the failure of the BHP Ruby project.
He added, “The Minister also forecast that gas would average 3.37 billion cubic feet in 2022, but we are averaging 2.7 billion right now, so that forecast has fallen short. There is always a degree of error, but not so much,” he said.
Ramnarine said the price of ammonia is promising. “The bright spot continues to be the ammonia price, averaging US$1,100 per ton. The minister has been collecting a bit more revenue to play with. But there is a demand by trade unions for increased wages, teachers want more; and it’s a difficult time to be a minister. I think that the Government needs to come clean with the country and there is a lot of lack of transparency,” Ramnarine said.
Hosein said he places more trust in the IMF’s economic forecast than in the Government. “The IMF identified real GDP for 2021 would be minus 1 per cent, and when I heard the Minister of Finance speaking in the mid-term review for 2022, I was surprised at some of the words he used to describe the economy, as everything is booming and each sector is progressing well,” Hosein said.
He added, “I thought that the IMF made a mistake and didn’t understand the Trinidad and Tobago economy well until I saw the Minister of Finance himself from his presentation at the Spotlight on the Economy, which shows a decline for 2017, 2018, 2019, 2020, and 2021. We have never had five consecutive years of decline. We have had six consecutive years of decline, and that’s a depression. Not many countries in the world experienced six consecutive years of decline between 2016 and 2021, and that is why we stand out in a bad way,” Hosein said.
“One of the things that really surprised me was that the fiscal balance continued in 2022 to basically be in deficit. For 2021 itself, most economies in the world improved, yet Trinidad and Tobago still found a way to be ranked in the top 20 worst performing economies in the world,” Hosein said.