KINGSTOWN, ST VINCENT—The ongoing currency issue in which Vincentian traders in agricultural produce are unable to convert their earnings to Eastern Caribbean dollars after plying their trade in T...
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GOVT’S CHALLENGE—PUBLIC DEMANDS VS IMF ‘COMMANDS
The din and declarations from yesterday’s united labour demonstration in eastern downtown Port-of-Spain were loud enough and large enough to have registered on Finance Minister Colm Imbert’s western Independence Square office.
A stone’s throw away from his office, the immortal words of kaiso bard Leroy Calliste blared from a music truck near Bankers’ Row conveying labour’s thought-provoking message to Government: “Bun dem...!”
In case Imbert (and Government) still didn’t get it, the thundering messages from labour leaders would have completed unions’ telegraph: be warned—on all fronts.
“ ...Whatever bitter medicine lies ahead, let everybody take a taste—not workers alone,” OWTU’s Gregory Marchan put it more (or less) diplomatically.
While labour, part of the tripartite movement—comprising Government, labour and business—was busy vocalising on the streets, representatives of the other two partners were in private meetings discussing T&T’s growth facilitatory process and ways of improving distrust among the three partners.
Insights into T&T lent by yesterday’s demonstration would not have been lost on the four-member International Monetary Fund team which left on Wednesday after a four-day visit for annual consultations with authorities on T&T. Certain team members had acknowledged they’d have missed yesterday’s demonstration as they had other such labour events, which occurred during some of their previous visits.
The IMF team, while lacking opportunity of a sit-down with OWTU “jefe” Ancel Roget or PSA “strongman” Watson Duke, however obtained all the info they needed about T&T via discussions which were held with Government (first), the Opposition, business/service sector entities and other relevant groupings.
Issues discussed by the team with stakeholders involved loss of revenue, the need for fiscal adjustment, economic diversification, rising debt levels, TT dollar value, Forex unavailability, plus recent downgrading by rating agencies and impact on investor confidence. Conversations also veered towards need to reduce utilities’ subsidies, exchange rate management and long-term strategies for the public sector.
Biggest concerns appeared to involve macro-economic issues and fiscal balances, the TTdollar, bringing expenditure in line with revenue and managing the deficit. Further conversations involved concerns about the industrial climate and the estimated $5.5 billion which local contractors say is still owed to the sector.
While the IMF team—normally guarded and poker-faced for such consultations—may not have appear overly stressed to some, a majority of local players expressed frustration with Government’s performance and perceived lack of direction to the team, it was learned.
The IMF’s assessment that T&T continues to face economic challenges (from low global energy prices) was balanced by projection the economy may be “starting to turn a corner” (from expected gas output recovery), projected oil sector recovery and non-oil sector rebound.
While the latter will boost Government’s stocks—financial and political—the team red-flagged various issues requiring financial restraint.
Weak revenue collection, causes and resultant large deficits and public debt. Need for sustainable fiscal adjustment. Containment of current expenditure. Rebalancing of public finances. Elimination of the imbalance in the Forex market. Measures necessary for this.
Respective recommendations and rumbling arising from the IMF visit and yesterday’s labour demonstration have come in time for Government to factor inputs into 2018 Budget planning and management of its mid-term trough, as well as subsequent lead-up to elections towards 2020.
How the 22-month-old administration balances labour pronouncements and demands, with agency prescriptions and directives, remains ahead.
IMF’s team stated “fruitful discussions” were held on “a number of adjustment measures to achieve the necessary fiscal consolidation.” Such measures remain to be seen. The team predicted oil output growth from Petrotrin’s recent exploration efforts and refinery upgrade, signalling the push may continue in Petrotrin’s new direction. This will be revealed imminently following Wednesday’s special meeting headed by Prime Minister Keith Rowley, on Petrotrin; the death of former company chairman Malcolm Jones, another sad reminder, that Petrotrin is entering a new era.
At a May public meeting, Imbert and his boss, alluded to “options” and advice from international agencies including to devalue the dollar, cut public sector salaries, subsidies and raise utility rates. But Imbert said Government hadn’t “bothered with them” because of unrest such action would cause, (and since T&T had a “caring Government” he’d boasted.)
The Opposition—which is on the same page with Government against devaluation of the dollar—will likely be formulating its Budget responses with IMF considerations in mind. UNC begins Budget consultations with constituencies later this month and with other entities, next month.
Government’s deliberations ahead may be more difficult than UNC’s. Especially since no one at yesterday’s labour demonstration was in frame of mind to remember the hand which unions extended to the PNM in August 2015—before general elections—which now appears clenched fist-wards.