You are here
Economist on the nation’s progress report: Key issues lacking
Finance Minister Winston Dookeran’s pat-on-the-back with his report on the Nation’s Business was “adequately” received by local economists. Dookeran, in a full-page newspaper advertisements last week, outlined T&T’s recovery path given the global downturn, the nation’s local fiscal challenges, measures to stabilise the national financial balance sheet and trigger new momentum for growth.
Pointedly though, Dookeran’s picture set the stage for his rationalisation of the Government’s five per cent wage offer to public servants. The report stated that the Government believed such a “settlement represents a prudent macroeconomic approach that will stabilise the financial situation and set the condition for a new growth momentum.”
But economist Indera Sagewan-Alli disagreed with that statement. She said the ministry, in defining the purchasing power it gives to public servants, “would curtail rather than propel consumption or demand.” Moreover, “in our current context where consumption is very depressed and is reflected by the continued decline in borrowing for consumers’ spending—on the face of reduced interest rates—limiting the amount of money given to people would not result in increased demand in spending, which at this time the economy requires.”
Asked if she believed the report was an adequate explanation of the Government’s five per cent offer, she responded: “I would have to say yes.” The report, she said, is couched with an objective to move T&T from its present deficit position to one of fiscal balance.
“Therefore, the objective is to obviously keep expenditure down or keep it at a minimum or increase income. But what he is arguing is the recurrent expenditure to the treasury. And if that is the case, one cannot suggest that it is not unreasonable,” she noted.
But while she believes Dookeran has justified his offer based on his objective, Sagewan-Alli said, “I am hard pressed to understand a measure that aim largely at expenditure control and budget balancing is setting a framework for growth. Economist Jwala Rambarran shared some of Sagewan-Alli’s views.
He gave Dookeran kudos for releasing the statement. “It is a good step in the right direction. There is sufficient information for us to understand what is happening and it is consistent with what he has been saying before,” Rambarran said. “What is most important is that we actually have seen an advisory from the Finance Ministry, which gives a snap shot of what is happening in the country,” he added.
Rambarran’s expectation is that the Government release more statements like this—especially after its mid-year review—which should paint a more comprehensive picture of what happened in the last six months, its challenges and its future projections.
This, he said, would help the private sector, the business community and public to have a more informed view and provide a sense as to how the budget will unfold.
But Sagewan-Alli felt that some key issues were missing. “While I agree with the minister that T&T received good international ratings, I want to remind the minister and the country, those ratings from International Development Bank (IDB) and International Monetary Fund ( IMF) had been premised on the realisation of, not only of the management and negotiation issues which they all said must be brought to a speedy resolution, but they have also been based on the implementation of the growth strategy that was presented in 2010/2011 budget.”
She said the minister has not provided an update on the state of these implementations. Further, she expressed concern that Dookeran has not explained to the nation why domestic investment continues to decline as reflected by the continued decline in investment borrowing from the financial sector, even when lending rate continues to decline and the financial system is flushed with money to lend.
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff.
Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments.
Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.
User profiles registered through fake social media accounts may be deleted without notice.