Coming public panic and desperation, devalued back pay dollars for public servants and fears of a return of the 1986 recession. These were some of the responses the T&T Guardian got from economists, former ministers and trade unions to Prime Minister Dr Keith Rowley’s long awaited address to the nation on the state of the economy Tuesday night.
Selby Wilson
Selby Wilson, who served as finance minister in the National Alliance for Reconstruction (NAR) government during the 1980s recession, said there might be concern whether the mitigating measures announced by Rowley were adequate given T&T’s economic circumstances.
“I think his measures are a step in the right direction but not enough is articulated about how robust they are.” Wilson said while Rowley spoke about cutting state expenditure by seven per cent he gave no firm indication how his Government would deal with its own expenditure.
“I am not sure how he plans to handle Central Government’s expenditure. It appears he plans to do so by dipping into the Heritage and Stablisation Fund.” The wisdom of this move will have a lot to do with how the HSF will be used, whether to support current expenditure or initiate productivity activities in other sectors, Wilson added.
“If the HSF is to be used to support current expenditure, this will not be moving forward.” He said the country could end up in dire straits like the 1980s recession when the government of the day had no choice but to go to the IMF.
“Not going there would require very good management of our resources,” he advised.
Bhoe Tewarie
Former planning minister, Dr Bhoe Tewarie said there was little clarity, no discernable plan and no identification of priorities in Rowley’s address. Further, Rowley’s failure to inspire confidence in the general population could lead to panic and desperation, Tewarie warned.
“It is unlikely Rowley’s statement will trigger confidence anywhere, in the general population, local business sector or international ratings agencies,” he said.
“The lack of confidence in the general population will fuel uncertainty and, if not managed properly, can lead to panic and desperation.
“Lack of confidence within the business sector could curtail investment and impact foreign exchange demand.
“A negative response from the ratings agencies will affect the cost of money from international sources.”
Tewarie said, except in the housing sector, he did not see an emphasis on stimulation of private sector financing and private sector action in the economy.
“I find his entire approach to business activity contradictory and confusing.”
Unions
If the TT dollar is devalued, it could mean public servants’ late back pay would also be devalued to half the amount. This was the concern expressed by Public Services Association president, Watson Duke, on CNC 3’s Morning Brew programme yesterday.
Duke was referring to Finance Minister Colm Imbert’s promise that public servants, owed some $5 billion, will be paid at an unnamed date in the new year. Imbert made the promise as he announced on December 11 that the Government had no money to pay public servants outstanding arrears on salaries.
Duke felt a devaluation of the TT dollar may be on the cards and could impact the value of public servants’ back pay. He called for an urgent meeting, with Rowley and the labour movement to discuss the matter. National Trade Union Centre president, Michael Annisette, called on the Government to avoid any unnecessary delay.
“They should do everything humanly possible to settle outstanding issues, the same way they find money to pay contractors,” he said. Annisette said an initiative introduced by the NAR government during the 1980s recession to allow public servants to own shares in state companies was rejected by his union at the time but would be a good idea now.
“In hindsight, we saw the wisdom,” he said. Annisette welcomed Rowley’s embrace of the labour movement at this time but expressed reservations about whether it will bear good fruit.
“Our experience has been that the tripartite approach has been cosmetic and not real and we really hope given the dynamics we find ourselves in, discussion will be based on mutual respect and on putting T&T first.”
Annisette called on everybody, not just labour, to make sacrifices.
“Everybody has to make sacrifices, the business community, the Government, not just labour. “For instance, an economist called for wage freezes across the public service but said nothjing about freezing prices on goods and services.
“If labour suffers whole economy suffers.”