IT'S THE ECONOMY,STUPID!!!!


On my radio program on Monday afternoon ("Counterpoint", Radio 91.1FM, Mondays to Wednesdays from 4pm to 6pm) I had the good fortune to have as a guest on the show the noted Trinidadian economist, Indira Sagewan-Ali. I asked her several questions including what did she think that economy will look like come December of this year? Ms. Sagewan-Ali replied that she could not answer that question with any degree of certainty as everything depended on what happened with the economy by the end of the first quarter. If things did not get better by then, she said, we would face a bleak end of year ... things would not get better! But, she went on, in order to fix the economy there were six major issues that the Government had to deal with ... and deal with them quickly ... or face a continued 'backsliding' that will have us all worse off.

1) Crime: The economist pointed out that crime not only was affecting the personal lives of everyone, but that it also was affecting the economy in that investments that otherwise might be made by both local as well as foreign investors were either not being made at all, or plans for such investments were being put on hold. Further, the extremely bad publicity being given to our local tourist industry because of crime was seriously and adversely affecting our tourist industry. Put another way, crime was making us seriously un-competitive in just about every area of the economy that requires investment.

2) We need to get a clear sense of direction from GOTT: Just about everybody has been complaining about the lack of a sense of direction from the Government of Trinidad and Tobago (GOTT). Those sympathetic to the Government (including me) have pointed out in its defence that the new government inherited a heck of a mess and has had to spend an inordinate amount of time 'putting out fires'. The answer to this from the economists is that this is all well and good, but there has to come a time when you come to the country with a clear message of the way forward. I agree with that. The truth is that there is only one test of leadership, and that is to lead, and to lead vigorously.

3) All Government Ministers must "speak the same language": Well, just about everywhere you go you hear people complaining about this. The sad reality is that too many Government Ministers have been making contradictory statements that have led to confusion in the minds of people as well as ill will between the various factions that make up the People's Partnership. The truth is that this cannot be allowed to continue. It simply does not make for stable government.

4) A quick resolution to "biting" issues: Probably the biggest "biting" issue is CLICO. And the need for a quick resolution to that particular matter is (or ought to be) obvious. But there are other "biting" issues as well. Ms. Sagewan-Ali pointed out that the ongoing PSA dispute needs to be settled quickly, again for reasons that ought to be obvious. There is also the question of the Petrotrin $18 billion debt, which is receiving no publicity at the moment, but which nevertheless is a most serious matter that is bound to rear its very ugly head sooner rather than later.

5) Approach to social intervention: Although the Prime Minister has appointed a young and energetic Minister of Social Development who seems to be always at the ready at the drop of a hat or the coming of a flood to be on hand to give out hampers and blankets, there does not seem to be any real approach or policy behind the Government's actions. 'You have a problem? Well, here's a hamper', seems to be the Government's approach to the social problems of the society. Okay. I agree that the foregoing appears to trivialise the Government's approach, but the exaggerated example was given in order to emphasise the perception that there really does not seem to be any policy or philosophy driving the Government on this very important matter.

6) Capital flight: For most of last year there has been a steady flight of capital with many wealthy Trinidadians and business people betting that things will get worse economically instead of better. Indeed, our floating dollar now trades at around TT$6.40 to US$1.00 ... down from its peg of $6.30 to $1.00. This slow but steady slide is not being halted ... indeed, the only thing that can and will halt it is a return of confidence in the economy. But nothing seems to be happening. There is no payment of past bills to the contractors who are owed several billion dollars. There was no big capital investment program announced in the last budget (which unfortunately can best be described as "wooly"), and the Minister of Finance is not projecting the confidence that investors need to feel secure. The truth is that many, many people (and I am certainly one of them) want this Government to succeed. And most people are still prepared to give them time to get their act together. But the truth is that time is running out and the Prime Minister is soon going to have to make a very serious decision as to whether or not she has got the right persons in the right job or as to whether or not a re-shuffle of her Cabinet will bring about the changes in the economy as well as a return of investor confidence that is so clearly needed. In thinking about her options I would remind her of two old adages:
- Doing nothing is not an option!
and
- The definition of insanity is doing the same thing over and over again
while expecting a different result! (Albert Einstein)