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Raffique Shah


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Mismanaging the economy

By Raffique Shah
July 5, 2015

In the pre-election polls conducted thus far, the issues that are of concern to the electorate are crime, unemployment, corruption, health care and rising prices, mostly in that order.

The state of the economy does not feature at all, although it impacts almost all these concerns.

Understandably, crime is the number one issue. Notwithstanding claims by both the Government and the police that there have been significant decreases in "serious crimes", clearly, most people live in fear of being victims.

Developments like the explosion of gang-style violence in Central Trinidad, daily reports of shootings and killings elsewhere in the country, and the frequent spikes that see multiple murders mostly over weekends, engender deep fear among law-abiding citizens.

That unemployment is invariably the second-ranked issue at a time when the Government boasts of having achieved a three per cent unemployment rate does not sound right. What these rosy statistics hide is the large number of "employed" persons who are in fact under-employed, who earn less than $100 a day, and whose families can barely survive in the consumer-driven society that is modern Trinidad and Tobago.

Let me explain: for most people, priority-spending starts with the all-important smart-phone and phone-card (several in a typical family), followed invariably by increasingly expensive cigarettes and alcohol, then by a daily, deadly diet of fast foods...

In such scenarios that straddle the societal strata, and notwithstanding the now-ubiquitous "food card", the poor will remain stuck in poverty, and the children and elderly, the two most vulnerable age groups, will suffer most.

Corruption, health care and other similar concerns, are important to those who feel affected, but they will hardly influence voting patterns. Regarding corruption, the feeling among most people is that all politicians are corrupt, the only difference being the degree.

Will ministers in Party B settle for five per cent kickbacks instead of the going rate of ten per cent in Party A?

It's a hell of a place to be when you consider that over a five-year period, the money up for grabs (usually from capital projects, not recurrent expenditure, though nothing is sacrosanct for thieves) could amount to tens of billions of dollars divided on a 90-10 or 80-20 "split" between corrupt contractors, among them professionals who land lucrative briefs, and corrupt politicians and high party officials.

Little wonder when they are booted from office or fall from favour, such white-collar criminals boast that their families are "fixed" for generations.

They flaunt the loot in our faces knowing they will never be called to account, far less charged or jailed.

When the Partnership/UNC came to power in 2010, supporters swore that half of the PNM ministers and scores of contractors would end up in jail. Five years on, except for a few civil lawsuits that are before the courts, no minister or senior official has been charged with even petty theft.

We can therefore safely assume that for all the allegations of corruption against the incumbents, who built what mansions and who owns half of Trinidad, not one will be charged if the PNM were to win power in September.

That's the tragic conundrum that faces us in 2015.

And it's how they do it, eh—in our faces. Up to 2011, government's annual expenditure was below $50 billion, with revenue more or less the same. Four years later, expenditure has rocketed past $60 billion and we can justifiably ask: what do we have to show for it?

For reasons only they can explain but not rationalise, governments seem to believe that they must increase expenditure every fiscal year. If revenues fall, meaning if oil, gas and petrochemicals' prices fall, they resort to borrowing, which means increased debt and deficit budgeting.

If you question them, they tell you that almost every country incurs debt—which is true: ask Greece!

They will tell you that our debt to GDP ratio is well within bounds—again, true. And they will point to our healthy foreign reserves (around US$11 billion) and HSF savings (maybe US$6 billion).

What they will not tell you is that these savings have been healthy for many years, but that they could have been far better if we had cut out corruption and wastage, improved productivity and instituted measures to ensure that only the poor benefit from subsidies, not the wealthy as is now the case with fuels and a range of foods, electricity and water.

This must be the only country in the world (outside of filthy-rich Arab states) where the wealthy benefit from subsidies more than the poor.

And they will never ask you to look at how Norway manages its oil revenues through savings and investment in a sovereign wealth fund that stands at US$900 billion and counting.

That's an example we should seek to emulate.

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