PM: Tighten your belts

Following is the full text of Prime Minister Patrick Manning’s address to the nation on Thursday 20, 2008

PM Patrick ManningMy fellow citizens,

I consider it most important that I address you at this time.

Before however dealing with my main purpose this evening, let me give you the assurance that the government continues to do its utmost to alleviate the plight of all those who have been adversely affected by the recent flooding.

As you are aware, four cabinet ministers addressed the media yesterday and outlined the steps being taken to respond to the situation; and from today, all government members of parliament and constituency coordinators have been deployed to their constituencies to be on hand to provide leadership and support in the event that any dislocation takes place.

On behalf of the government, let me take this opportunity to express my condolences to the families of the two persons who tragically lost their lives in the aftermath of the excessive rainfall.

Global economic challenge

I now turn to the main subject of my address this evening. ladies and gentlemen, the world economy is facing very serious difficulty.

The global financial crisis has shaken the international financial system at its very foundations, causing the collapse of some of the world’s leading banking institutions.

This has produced, among other difficulties, a very severe reduction in the availability of credit, making it almost impossible to sustain or increase levels of industrial activity in most leading economies.

We are therefore faced with an economic slowdown in many industrialised nations, with most either already in recession or heading there.

It all points to a global economic slump which, in the view of experts, could be deep and prolonged.

Some even talk of a depression.

No country can escape the effects of a global recession.

This produces a drop in export earnings, economic contraction and loss of jobs in most nations of the world.

All countries would be wise to take appropriate action.

Effect on Trinidad and Tobago

Because of this international situation, Trinidad and Tobago has already suffered a loss of revenue, as the prices of our major exports- oil and petroleum products, ammonia, methanol, urea and steel-have all been reduced.

But let me give you the assurance ladies and gentlemen that up to the end of September, when the budget was presented, there was no indication of any impending international economic problems of the magnitude that we are now experiencing.

The budget prices for oil and gas, at $70 per barrel and $4/mmbtu respectively, were therefore based on the best global advice from expert agencies, including the IMF.

Things are turning out quite differently.

Crude oil prices fell significantly to US$67.81 per barrel at the end of October, losing more than 50 per cent of its value since peaking in July 2008 at US$148 per barrel. Natural gas at the us benchmark trading hub was priced at us$6.58/mm but at the end of October 2008, down 11 per cent since the beginning of the month and trending downwards. between September and October this year, the price of ammonia fell from us $887.60 to $772.90 per tonne; urea from us$798.75 to $573.40 per tonne; and methanol, also softening, from us $411.00 per tonne to $399.00.

Additionally, due to decreased demand, there have been a number of temporary plant closures as well as reduced output at Point Lisas, further aggravating the revenue situation for the country.

The situation is made worse by the reduced sale of natural gas at the industrial estate.

Therefore, ladies and gentlemen, in terms of revenue projected in our present budget, we expect to fall short by six billion dollars for this financial year.

This expectation is based on the present rate of international commodity activity.

In other words, ladies and gentlemen, things could get more challenging.

It is clearly a very serious situation requiring immediate action.

After very careful monitoring of the situation, the government has now done a reassessment of its planned expenditure.

This has led us to a reordering of our developmental priorities and the deferral of some of the projects we consider essential to the realisation of developed country status.

Confidence of the government

I wish to emphasise that whilst there is the need for concern,we are confident that we will successfully steer our ship through this inclement economic weather.

The benefit of experience

We have benefited from our experience.

Trinidad and Tobago has been this way before, and I assure you that we, who have the responsibility to lead at this time, have learnt the appropriate lessons.

I remember in particular that unforgettable precipitous drop in oil prices to nine dollars a barrel in the eighties, a development which almost derailed our stability and our progress through calamitous loss of revenue and the years of negative growth that ensued. indeed when I became a member of parliament in 1971, we were in fact experiencing depressed economic conditions.

Bitter medicine

We swallowed bitter medicine during the period of the eighties and early nineties, ladies and gentlemen, applying the structural adjustment needed to balance our budgets and to achieve greater efficiency and productivity and the sustainable growth of our economy.

We all shared the burden of adjustment.

I am proud to have led the administration of 1991-95 which, in the face of great political risks, took those tough decisions, to modernise our economy for participation in the global mainstream.

The economy began to turn around in 1994, after almost ten continuous years of decline, and has been growing ever since.

Now Better Prepared

We have therefore proven that we can fight a recession, ladies and gentlemen, and I am

sure that we will triumph over this slowdown and this time we are better prepared.

Look at the facts. Since 2001, our economy has been growing at an average annual rate of 8.3 per cent and is now one of the most progressive in the region.

It has tripled in size from 55 billion dollars in 2001 to 160 billion dollars in 2008.

Over the last seven years we have been able to attract over six billion US dollars in foreign direct investment into our country.

We have reduced both external and public debt.

Our foreign reserves now stand at over 10 billion US dollars, representing more than one year of import cover and national savings have grown with our heritage stabilisation fund now standing at 3.2 billion US dollars, more than fifteen times since 2001.

We are undoubtedly better prepared to face a slowdown and a key contributor to this very positive state is the energy sector, particularly the LNG industry which continues to earn very significant revenue for Trinidad and Tobago.

This did not happen by chance. Indeed, it was a decision of the government in 1992 that reversed the traditional position and authorised the pursuit of the LNG industry to generate an additional revenue stream for the country.

It was designed precisely to give us a buffer in the event of the kind of situation that has now arisen. consider, ladies and gentlemen, where we would be today without LNG?

Caricom

Ladies and gentlemen, it must be remembered that in good times and bad, the fortunes of Trinidad and Tobago are bound up with those of our Caricom partners.

This is our second largest market which will be negatively impacted by, among other developments, the drop in tourism during this period.

This in turn would reduce their purchasing power and therefore affect our export earnings as well as domestic employment levels. It is therefore necessary for our mutual benefit, that the resources of the Caricom Petroleum Fund continue to be available for the assistance of our Caricom neighbours.

Need for Restraint

In the same vein, I would urge restraint at all levels since this is a period when we must all tighten our belts. In this regard the dialogue between the Government, business and labour must begin as we come together to confront the challenges that are before us.

The key to survival and success in this situation is higher levels of productivity.

This is absolutely essential if we are to maintain and improve the country’s competitive edge.

Budgetary Guidelines

My dear friends, today the Cabinet considered the recommendation of the Minister of Finance for downward adjustments of budgetary allocations for ministries, departments and statutory authorities.

The areas targeted include discretionary expenditure like promotion, publicity and printing; materials and supplies.

Goods and services and minor equipment have also been targeted.

With respect to the development programme, the projects identified for downward adjustment are as follows: new projects other than those of an urgent or critical nature; those projects for which there were no firm contractual obligations; ongoing projects for which the pace of implementation could be reduced without legal penalties; and ongoing projects for which some components could be deferred.

Ministers have now been directed to review their budgets along these lines; and next week, the Cabinet will decide on the actual adjustments to our programme to ensure that expenditure is kept in line with revenue.

People, Our Top Priority

In considering these budgetary adjustments, my dear friends, our top priority in these challenging times will continue to be the welfare of the people.

Therefore whilst sacrifices must be made, some projects and programmes delayed, the Government will not lose sight of the need to continue our focus on human development.

I wish to remind the nation, that in 1996, I walked the thirty-six constituencies of this country and the message was quite clear.

The view was that the Government had spent a lot of effort on the economy and not enough on the people.

Therefore as we negotiate this economic downturn, we will take care of those who are least able to take care of themselves.

This means that there would probably be an increase in social sector spending. Indeed if this is what is called for, this is what we will do.

At the same time we will take the opportunity to bring about greater effectiveness in the conduct of Government business especially in the social sector.

We will rationalise our social programmes to avoid overlap and duplication and put in place new management arrangements for greater efficiency.

Unemployment levels, which stood at 4.6 per cent in the second quarter of 2008, are the lowest in our country’s history, are now likely to rise, but we feel confident that we can keep unemployment at single digit levels and here is where our social programmes will be most effective.

We recognise the challenge of headline inflation, but we are certain to bring this down in the coming period. Indeed the IMF itself has projected that our rate of inflation will fall within one year to 7 per cent, largely due to the significant decline in agricultural commodity prices including rice, cereals and wheat.

In fact only yesterday, one producer announced that the retail price of bread has dropped by 11 per cent and the National Flour Mills has similarly indicated that the price of flour will also be reduced.

The Minister of Legal Affairs has been directed to initiate dialogue with the supermarket trade and with the distributors to ensure that all price reductions are passed on to the consumer; and here the Government is advocating consumer action to ensure that it happens.

We will not allow profiteering and greed to defeat our efforts at national stabilisation.

Conclusion

As you can see, ladies and gentlemen, we are prepared to face this situation using discretion and sound judgement in the best interest of the people of Trinidad and Tobago.

We know that because of our policies and programmes over the last seven years, we are in a much better position to deal with the situation before us.

We also know that our people are much better equipped to meet this challenge and that you will be disciplined, discerning and inventive.

We are also sure that the global community will overcome the present difficulties. Globalisation has brought a mixed bag of prosperity and poverty, great opportunity and commensurate risks. But one thing is certain.

There is now an interconnectedness among all economies of the world which the financial collapse has underscored; and which has pointed to the inescapable coordinated, global response needed for this crisis.

The approach has to include, among other measures, greater transparency and effectiveness in the regulatory framework for international financial institutions; revival and completion of the suspended multilateral trade negotiations; and a new global financial architecture to replace bretton woods and which takes into account the increasing economic multi-polarity of our world, produced by new and emerging centres of economic strength.

If managed well, out of this crisis could emerge a new world economic order, one characterised by greater fairness, sensitivity and sustainability. We could also see, as has been forecasted, the global economy doubling in size in the not too distant future.

I give you the assurance tonight that Trinidad and Tobago, having overcome this present challenge, will be ready to participate even more successfully in another era of global prosperity. Next week, following the review exercise by all ministers, we will advise you on the proposed adjustments to the 2009 Budget.

Thank you ladies and gentlemen. May God bless our nation.

Related News:

PM: Clearly a very serious situation
Government is reassessing expenditure, deferring a number of projects and eliminating various expenses as it gears to meet the challenges of the international economic downturn, Prime Minister Patrick Manning announced last night.

$6B Budget shortfall
PRIME Minister Patrick Manning last night said because of the global economic slowdown, this year’s $50 billion Budget is to be cut by $6 billion.

Band Your Belly
Manning announces cutbacks as revenue set to fall by $6 billion

UNC: No comfort in Manning’s address
UNC deputy leader Kamla Persad-Bissessar has said the country cannot take comfort in Prime Minister Patrick Manning’s address of last night.

TT not immune from financial crisis
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Economist on Govt: Better late than never
Senior Economist, Dr Ronald Ramkissoon, said it was good to see that the Government was finally heeding the calls of local economists to review its budget in light of falling oil prices, but said it should have acted sooner.

High-rise first, crops after
Frustrated and fed-up with Government promises, farmers are convinced that the construction of high-rise buildings has now come before the protection of their crops.

Abdulah: Reject Manning’s call
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9 Responses to “PM: Tighten your belts”


  • The Pm has spoken like a true ******! Once again, he’s trying to fool the people of the Nation “The view was that the Government had spent a lot of effort on the economy and not enough on the people.

    Therefore as we negotiate this economic downturn, we will take care of those who are least able to take care of themselves.”

    When was the last time the PM showed any concern about the “people.?” He failed to even mention the murders, rapes and robberies taking place and no plan to battle the crime situation.” But, to many in Trinbago his words are “the words of a God.” They have to eat grass and send their children to school barefoot and eat spoil government food,but they will still vote for him. He soooo reminds me of Chambers! “Duncee.”

  • I don’t understand why Patrick manning continues to show unhindered audacity – which, apart from everything else … simply insults the intelligence of our nation’s people.

    One recent example: He claims that they are going to cut back on programmes – just how much money has his government wasted on purchasing 200 luxury BMWs? What’s going to happen to these cars afterwards? Are they going to be allocated to government mimisters and their families …which seems to be the trend of Manning’s regime.

    The reason for the crime surge is quite simple: WEAK LEADERSHIP – Manning is percieved by the masses as a weak and corrupt leader who makes irrrational and nepotistic decisions – and who seems to be under the impression that he can impose his will to overide the basic rights of citizens (e.g. freedom of speech and the right to express oe’s opinion). This is also the reason for the present brain drain that Trinidad and Tobago is currently experiencing. Who want’s to wast years of higher education by coming back to a country where corruption is rampant in all sectors of life. WE are losing the skills of many sons and daughters of our who refuse to put up with Manning’s pseudo-dictatorship!

    So the question reamins -are we going to let this continue – to the point where we will be literally at each others throats as is the case in neighbouring Haiti? Or will we demand accountability by Mr Manning and his minions?

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    Inflation now 15.4%
    The country’s rate of inflation has spiked once again.

    Business groups ‘glad’ for budget cutbacks

    Manning: Cepep, URP here to stay
    The Community Enhancement Partnership Employment Programme (Cepep) and the Unemployment Relief Programme (URP) are here to stay.

    Manning: Govt to create more CEPEP, URP jobs

    Toss-up for which projects to stop

    Dookeran: Govt should curb extravagant spending

    Bas on belt-tightening call: PM must lead by example
    Prime Minister Patrick Manning and his government must set the example when it comes to “tightening belts” in the face of the ongoing and deepening economic crisis, Opposition Leader Basdeo Panday has said.

    PM Manning to set adjustment example
    Prime Minister Patrick Manning proposes to set the example to the nation in the belt-tightening effort, senior Government sources said yesterday.

    When The Rainy Day Arrives
    If there was ever any doubt about just how much the global financial crisis stands to affect T&T, the arrival of a stream of rainy days figuratively brought the point home this week ahead of Prime Minister Patrick Manning’s television address.

  • Guess what Ann, Trinidad and Tobago will see the likes of Patrick and his bunch for a very long time simply because there are no autentic alternative out there. People do not simply vote for another party because the present regime is terible, it’s the oldschool 18the century type of political thinking that some leaders seem to belive . You cannot maligne , and speak dismissively of a group of people and expect them to vote for you come election.
    Ask your new found hero Obama about the backlash from poor working class white folks that viewed him as an elite , or Pensylvania gun loving citizens that felt slighted after his callous comments about them during the recent campaign.He was savy to reach out to other demographics.

  • Manning will be the Prime Minister of Trinidad & Tobago at least until the year 2020. This has to be true for the following reasons:

    1. Most citizens do not have a clear understanding of democracy.

    2. Checks and balances are weak or almost non-existent in our
    political system.

    3. Manning believes that he is the best and the brightest that this
    country has to offer.

    4. Manning decides what the rules are that govern the PNM.

    5. Anyone who challenges Manning for party leadership is seen as
    untrustworthy and will be retaliated against.

    6. Manning wants to rule Trinidad & Tobago for as long as he is
    able to.

    7. Manning wants the Constitution rewritten to include an
    executive presidency.

    8. Manning believes that he is the law.

    9. Manning recently threatened to take any media organisation
    that ‘unfairly’ criticises him to court.

    If the political system is not reformed, any person who becomes prime minister or president could essentially do exactly what Manning is doing. This is why some form of term limit should be included in the Constitution. Dictators throughout the world would be envious of our political system. Term limits now apply in the Soviet Union and Pakistan of all places.

  • T&T should resort to term limits to change its government and failure to do so is an indication that it is undemocratic unlike Pakistan where dumb Muslim fanitical military leaders have ruined that country ,and Russia, where Putin waxed nostalgic about a time some 19 years ago when the USSR was relevant.
    I once read a scribbling on the walls of all places Police headquaters on the corner of Sackville street , where a young police hero was murdered by one of Backer’s tugs in 1990. It said : three of the worst people in the world are , a rich indian, a poor white man, and a educated black man. There might be some merit some where in that somewhat honest though prejudicial view of a tired officer that toiled on that post so many years ago.
    Martin in your favorite country two things occured to effect change and so ensured a different political outcome to the horrendous fortunates of the almost uselsss Democratic party. 1. It took a political and economic crisis . 2. It took a savy political figure that was willing distroy the old playbook on how power can be acquired via vibrant grassroots movement, broadbase coalitions, and forward non tribal thinking- at least on electioneering paper.
    Sit down in fornt of your fireside ,with your Campari and lemon, or perhaps Bloodymary with your favorite dog at your side along with your cancerous cigar , and reflect on where your wonderful country stands presently.
    Do we have a crisis , and do citizens that matters thinks so, and if the 72 year old experience Mc Cain could not lead his party to the promise land , can the 72 year old Basdeo do so again in baby America?

  • Martin, ‘Most citizens do not have a clear understanding of democracy.’ What is democracy in your opinion so we will all know?
    You want to replace Manning, Ok, but with whom? These are the choices we have, the UNC whos leader, Panday, refuses to hold party elections in the past 5 years because he knows he will be replaced by Persad-Bisesser. A woman whos political philosophy no one knows, other than she is a yes-woman for Panday. And the PNM who yesterday the Finance Minister Browne,on the news, said (I’ll para-phrase) ‘The people of Trinidad have too much money and they expect too much from the govt. that is why we in govt. (the PNM) cannot meet thier needs.
    These are the choices the people have, other than COP which no one really know what they stand for. I dont even know the political philosophy of the three parties. other than we are better than the other guy.
    Neal maybe you can enlighten me, you are a smart guy. What does PNM COP and UNC believe. i just get ignorant racist answers when I ask people. I get PNM only helps Africans or UNC only helps Indians and no one knows about COP.

  • David,

    The remark by Mariano Browne, though some may have viewed it as contemptuous, is something that Manning or Karen would not have said. This is the reason why politicians have ‘attack dogs’. Some people see Mariano Browne as another one of Manning’s attack dogs. Folks like Imbert also fall into this category.

    Is our political system such that citizens have the opportunity to choose their party leader in a process that is transparent and fair? Could it be that the democratic process is very well understood by Trinbagonians but that they choose not to believe in the process? The basic definition of democracy is widely available to all who have a desire to be more knowledgeable about the subject. If citizens desire a clearer understanding of democracy, it is something that they would have to find out and discuss among themselves since we are an educated nation that is supposed to achieve first-world status in the year 2020. Also, teaching the fundamentals of democracy in secondary schools may give legitimacy to the Vision 2020 initiative. An example of an unsound democratic principle is when Manning is trying to rewrite the Constitution in a manner that will make it almost impossible for him to loose an election. For the Constitution to have any validity, it must include term limits for at least the prime minister.

    It appears that the lack of understanding of the democratic process is the reason why this country is in the condition that it is in. Even some highly-educated Trinbagonians appear not to understand this process. Just ask Neal, he is highly educated. I am not highly educated, but I do understand the process. The democratic process, although it is not perfect, works best when citizens become involved to the extent that they are willing to hold their elected representatives accountable for corruption, mismanagement and other indiscretions. A case in point is the current situation where Manning is accusing Rowley of pocketing 1 million dollars worth of taxpayers’ money. Whether this is true or not, 1 million dollars is a lot of money that apparently has not been accounted for. Because of the rampant corruption within this country, many people like Neal simply accept it as par for the course and are no longer outraged. In countries where the democratic process is strong, and is understood by its citizens, politicians go to prison for corruption or are removed from office.

    I believe that there are many Trinbagonians who can replace Manning as prime minister and successfully govern this country in a reformed political system. Kamla Persad-Bissessar and Keith Rowley are just 2 names that come to mind. Others who could govern this country successfully have probably chosen not to be involved in a regressive political system, and some may have even migrated. It is clear to many that Manning and Panday will be at the head of each party indefinitely. This is simply because they single-handily decide on the rules that govern the respective political party. The rules are structured in such a manner that gives the leader of each political party absolute power. Many so-called highly educated people in government are aware that the democratic process has been perverted but have chosen to remain silent, or blame the opposite party for perverting the process. No one can run against Panday for the leadership of the UNC and remain unscathed. The same holds true for Manning in the PNM. Term limits could address this shortcoming.

    I was told that Manning has been in politics for over 35 years, and Panday has been in politics for over 40 years. If Trinbagonians are truly inspired by the victory of Obama, and believe that change is possible, then Trinbagonians have to seriously start questioning a political system that has allowed Manning and Panday to be key players in politics for over 20 years. In the meantime, our elected leaders will only be as responsible and accountable to the extent that we allow them to be.

  • David in true recognition of our festive season , I’ll leave your small attempts at flattery alone for the moment since in like manner to ‘Chaucer’s Chanticleer- The Çock and the Fox- it will do none of us any good.
    You are correct to dismiss the narrow caracterization of the PNM and UNC, as they are not totally correct even if both emanated from and draw lots of support from racial/ etchnically skewed bases.
    The COP like the NAR was convenient creation that lacked the star power to succeed.The challenge for any new emerging leader is to recognize that members of the both dominanant majority are experiencing similar pain and are desperate for solutions. The diffrences in political ideologies amongst our main stream parties are miniscule indeed.
    I would like to see coalitions not only at the narrow political levels , but civil society, business entities, and politicts bases – with elities playing a useful role where ever they exist.

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