The rain has gone… but what about the obstacles in our way?

A monthly column by Dr Marlene Attzs Sooping-Chow, Economist.
Email: marlene.attzs@gmail.com

In case you missed it, the mid-year budget review was read by the Minister of Finance a few weeks ago, on May 10. As is customary, there was much political picong and desk thumping during the Minister’s presentation. Personally, I’m not sure what there was to desk thump about, but this has become customary in parliaments around the world.

I read somewhere that India’s Lok Sabha [(House of the People) and the lower house of India’s Parliament] was calculated to waste 22 per cent of its time on unruly Parliamentary nonsense; Taiwan is legendary for its Parliamentary fistfights, including female legislators getting in catfights. Parliamentary brawls also occurred recently in the Ukraine and Bolivia. I suppose we’re lucky in T&T not to have descended to brawls but the inane exchanges are at times cringeworthy.

Anyway, back to the mid-year review itself. A media house contacted me shortly after the reading of the mid-year review to ask my thoughts about the much touted “turnaround” and the Minister’s reference to the rainy days being over.

My response included a fairly obvious analogy—even during the rainy season there will be days of blue skies and bright sunshine. Such days do not remove the fact that one is in the rainy season. In other words, there is still much to be achieved before one can convincingly speak of an economic ‘turnaround’.

As I had ‘predicted’ in my CN March 18 column, this budget review focused on the fact that some ‘manna’ had fallen from the energy gods and there was an uptick in energy prices which would augur well, in the short term for T&T’s economy.

That was the ‘turnaround’ that triggered the Minister’s happy dance—the budget was predicated on an average oil price of US$48 per barrel and a natural gas price of US$ 2.25 per mmbtu. For the first six months of the current fiscal year, the corresponding prices averaged US$50.45 per barrel of oil and US$3.30 per mmbtu of gas, respectively.

The Minister proudly announced an expected increase in tax collections “…from the energy sector for 2017 to $3.6 billion, compared with the original budget projection of $2.6 billion, an increase of $1 billion.” So a glimmer of a rainbow in the midst of the rainy season.

I’m less exuberant than the Minister about the faint rainbow which, to my mind, does not represent a ‘turnaround’.  I’d like to think a ‘turnaround’ would suggest that policy makers have conscientiously put policies in place to identify and solve problems, made changes in its management of the economy and implemented a long term and sustainable economic strategy. By his own admission the Minister’s much touted ‘happy-dance-turnaround’ was due to slightly higher energy prices.

By his own admission too, the unemployment rate has increased, albeit “slightly”, the Minister said, with the number of unemployed persons increasing to 25,500 from 21,900 the year before.

The Minister spoke about inflation (the rise in price levels) remaining “subdued”.  He was happy about this since “…this containment of inflation is a deliberate strategy… designed to cushion the effect on the most vulnerable of the reduced national income, and it has worked so far…”.

Let’s hope the cost of imported food doesn’t increase or that the local weather patterns do not affect the cost of locally produced food since that would immediately cause inflation to rise.

That takes me to two issues which were noticeably absent in the turnaround speak. The 42-page budget review didn’t once mention crime or national security. I appreciate not everything can be dealt with in 42 pages but, come on, something as serious as crime didn’t even get a mention! Should crime not be a front-and-centre matter given its effect of discouraging foreign investment, not to mention the black (not dark) shadow it is casting on the country?

The other issue noticeably absent was agriculture, including food and nutrition security. I recently attended a very interesting symposium on food and nutrition security. It dawned on me that even if the economy does “turnaround” in some form or fashion, rumour has it that we are fast becoming known as fast-food consumers. The implications of unhealthy food consumption will reflect in the cost of hospitals and the loss in workers’ productivity.

I reserve my optimism on the “economic turnaround” until there is greater assurance that the change in economic fortunes is sustainable and will redound to improving the lives of the average Trinbagonian. 

As I noted at the start of this commentary, the mid-year review focused on “the rain [being] gone”, a la Jimmy Cliff’s ‘I can see clearly now’, but was silent on the rest of that classic song that speaks to “…the obstacles…” and “…dark clouds…”  that undoubtedly still stand in our way.

That’s just my point of view.