Thursday, July 1, 2010

Like most people (or at least an overwhelming majority) I was very pleased with the May 24th victory of the People's Partnership at the polls for reasons that hopefully are very obvious. (If they aren't to you, then I'll happily debate them, but there are more important matters to discuss at the moment). What concerns me now that the new Government is settling down and settling in is that there are a number of economic or financial "potholes" (for want of a better word) left in the way of the new Government by the Manning administration that can de-rail the Government before it even gets off the ground.
Let me put it to you this way: Let's say that you were in charge of a railway switch. Coming down the track at ninety miles an hour is a huge locomotive that is totally out of control. Now, if you leave it on its present track it will run straight into a very fat man and kill him immediately. If, however, you throw the switch and send the train onto the other track it will run into twelve people a little further down the track and kill all of them in five minutes from now. You cannot warn either the fatman or the twelve people about this imending disaster. If you do nothing, everybody dies. What do you do? would you kill the fat man in order to save the other twelve? Everybody is innocent! It's a terrible choice, isn't it?
Well, that is something like the choice facing the new Government on a variety of matters. In other words, Prime Minister Persad Bissessar is going to have to make some very harsh decisions very soon that will hurt a lot of people. The first "pothole" or "runaway train" that we are facing is the crisis at State owned Petrotrin. Petrotrin has a debt of somewhere in the vicinity of TT$18 billion! There is no way that the company can survive unless something is done, and soon. The only options that appear to be on the cards are:
(a) massive retrenchment (approaching something like fifty per cent of
the work force), or
(b) a devaluation of the TT dollar which would increase the TT dollar
earnings of the Government and thus make this debt more
manageable (remember that the vast majority of the Government's
income is in US dollars).
Then there is the CL Financial/CLICO "pothole" or "runaway train". That particular hole is about TT$50 billion. The last administration was most reluctant to sell of the CL Financial assets, but it is difficult to see how the new Government will be able to avoid doing so. In any event, even with a sale the hole remains uncomfortably large.
Then there is the question of Errol McLeod's influence in teh Cabinet. Will he go along with a reduction of the workforce at Petrotrin if that is the recommendation of the experts or will he insist on a devaluation? In other words, will the pain be confined to a few or to the whole country?
There are other problems as well. It is clear that Mrs. Bissessar's team have inherited a huge mess. It is also clear that there is going to have to be a series of rather harsh and difficult measures that will be needed to get the country back on track. The question that has to be on everyone's minds is what exactly does the new Government propose? Well, we shall all find out soon enough I suppose. But make no mistake about it, they have their work cut out for them!! I genuinely wish them well. If they fail we are @#$%^&*!!!!!!!!!!


  1. Mr Montano, as a lawyer it would behoove you to give credit for material not of your own invention: we all heard the BBC promotional spots for "would you kill the big guy?" and excellent programme on pragmatic philosophy. We appreciate good debate but it's unseemly to present the metaphorical dilemma as a colourful creation of your own: please give credit where credit is due. Just insert this link:

  2. Yep!! I did hear the BBC programme. I had in fact heard the story about killing the fat guy before and therefore didn't think that it was copyrighted. I did think that it was an apt story for the point that I was trying to make,i.e., that no matter which way the new Government turns there is going to be pain, which is why I used it.
    But I take your point. I certainly was not trying to plagarise anybody's ideas. If it came across like this then I most sincerely aplogise.

  3. I am one trinidadian that is happy that some
    citizens head is still screw on right. Trindad have a lot of changes to come harsh ones too. My question is do people beleive that this new goverment coud implement the changes needed? Put aside parties it's for the love of country and not what the country can do for us. Trinidad need strong leadership that is brave and can do the right thing for our country. Fellow citizens needs to understand the implications here and work with the goverment. The country need change in a big way, could we take a devaluation now? TT dollars is already 6.14 per US1.00, are we heading Guyana and Jamaica way? It"S hard Mr. Montano.

  4. Very interesting use of "potholes" when considering the global scenario. I invite you to have a read here as well.