Better bite the bullet now

By Raffique Shah
September 14, 2014

Raffique ShahNine out of ten people, if asked to comment on Government’s 2014-2015 budget, would quietly, and many grudgingly, say it was a good package.

For the average citizen, what matters most in the annual Appropriation Bill are what new measures strip him (or her) of some portion of his earnings or wealth, meaning taxes or levies, and what new benefits accrue to him by way of increases in grants, subsidies, soft loans and so on.

The elections package delivered by Finance Minister Larry Howai last Monday was predictably generous on giveaways and devoid of any new impositions on citizens. From womb to grave, quite literally, the Government has proposed measures that will see the wealth of the nation, or what is left of it, shared among the masses, more so the poor and vulnerable.

What more can mankind ask for? From a “baby grant” for the poorest who time their pregnancy well, to increases in old age pensions, disability grants, easier mortgages, tax amnesty and more—you wished for it, the minister delivered. GATE, CEPEP, URP and dozens of other programmes that provide relief for many and rewards for a select few (corruption), remain intact.

The feeding frenzy continues. Don’t worry, be happy. Amidst the ecstasy of oil dollars flowing into the coffers, why would anyone think about the agony of declining oil production, gas reserves at their lowest levels ever, and the additional threats to our traditional cash cows in the energy and downstream energy sectors?

Thing is, this time around it was Howai and the People’s Partnership’s moment of glory, their opportunity to play a September Santa. Next time it may be another party, another government, but the tune will be similar if not the same.

That is because there are no philosophical underpinnings to governance in this country, no ideology to guide economic and social policies. True, the PNM, during its long tenure in office, grasped the possibilities in exploiting natural gas, out of which evolved a diversified industrialised economy that few nations this size can boast of.

But the root remained anchored in hydrocarbons, with perennial talk about deeper diversification that remains talk. Agriculture is almost dead (0.5 per cent GDP at current prices). Manufacturing, once robust, languishes at 5.6 per cent.

And guess what accounts for 50 per cent of GDP? The services sector—primarily distribution and restaurants, finance, insurance and real estate, and construction and quarrying. These cannot sustain the economy, cannot bring in foreign exchange.

On the social side of the equation, the PNM opted for a hybrid welfare state, hence the early birth of entities like the Unemployment Relief Programme (URP) in whatever incarnation. A phalanx of other, similar programmes would follow under successive governments. The IDB recently identified 63 social protection and labour programmes, with duplication in many. And, as some international agencies noted, and we citizens know, the more billions expended on such programmes, the more corruption you have.

I am not suggesting that we ought not to have a welfare state, nor will I ever agree that we bow to the dictates of agencies like the IDB and the IMF. Defending the budget against calls for reining in expenditure on “transfers and subsidies’ (currently over $30 billion), Howai cited Norway as an example of a highly successful welfare state.

True, the “Nordic Model”, variations of which exist in Norway, Sweden, Denmark and Finland, is the envy of much of the world outside of obscenely oil-rich enclaves like Qatar, the United Arab Emirates and Brunei that are so wealthy, taxes are unheard of and many goods and services are subsidised.

In contrast, welfare states like Norway are successful because they prudently manage their wealth. Oil dollars did not dazzle them into losing focus on other, traditional sectors of the economy, or on doling out money freely. Corporation tax (20 per cent) and income taxes (approximately 50 per cent) remained intact, and gasoline at the pumps sells for US$9 a gallon.

In return, because most of the oil and gas revenues are saved in a special sovereign fund (the biggest in the world—currently close to US$900 billion), unemployment benefits are huge—90 per cent of previous earnings. But when the unemployment bureau finds you a new job, you’d better grab it or lose your benefits.

So yes, ours is a welfare state of sorts, but one that operates more by “vaps” than proper planning, with a mishmash of programmes that are abused by the beneficiaries as much as they are exploited, even vandalised, by the benefactors.

Returning to the budget, its generosity to the elderly, the infirm, the poor, the vulnerable, cannot be questioned even if the measures are targeting voters in the next elections. Once the oil dollars flowed, every incumbent government did likewise.

The harsh reality, though, is that we do not have limitless reserves of oil and gas, or guarantees that the good times will roll on forever. Unless we make some significant finds soon, oil and gas will decline into insignificance as early as in ten years.

Better bite the bullet now, wean citizens off dependency, and avert an economic storm that is sure to strike if we do not rein in wild spending.

19 Responses to “Better bite the bullet now”


  • Aha! Raff similar discussions took place (Girwar, Panday you and I) in the 80s. Our discussions were centered on the green revolution whereby the US at the time (60s) would always use food as a weapon. I do not know if you can recall Susan George book ‘How the other half dies’ which she got as a PhD at the University of La Paz but that thesis was banned in the US and the UK. In T&T, We had economic development (petrochemical complex) followed by social unrest in the 90s at the expense of agricultural development (re-Spence report: diversification at Caroni. However the establishment of the arm of UWI at Debe is a step in the right direction, however the faculty of agriculture should be linked at Debe to help farmers in Cedros, Palo Seco and South in general to institute food processing technology with coconut, citrus, etc. industries. Dr. Gopeesingh is wrestling with instituting laptops for the children but commensurate with that he should be updating program technologies in house to open and develop further the minds of our valuable human resource. This is what the Nordic keep at all the time with ship building for example. Compare this with what we have to sadly read at times:
    http://www.newsday.co.tt/news/0,200392.html

    • One of the most telling pieces of information disclosed by the Finance minister recently is the fact that the average number of missing students annually in the secondary system totals approx. 5000.These students disappear between the writing of the SEA and secondary school graduation. We now know where many of them are…in jail.

  • You are so right Mr. Shah. There is no philosophical difference between the two major political parties.Neither party has presented a credible vision or economic policy to the people of T&T. Politicians really make no effort to define their political philosophy. They are more focused on dividing the nation based on race in order to achieve their political victories. It seems that they are content to taking turns at governance and utilizing the treasury at their convenience.
    The attitudes in Tobago in particular is even more frightening. In this “fantasy” island over 80% of the inhabitants receive a paycheck from the government. They complain vociferously at budget time for increased allocations, a substantial percentage of which is squandered on failing projects or corruption.
    I do not think that successive governments or the people of this twin nation ever consider the prospect of the good times ever ending due to the limited reserves of gas and oil.

  • The government does have to improve its revenue collection stream. Giving money to the elderly and poor mothers do get “plowed” back into the economy because they will spend what is given to them. The guys with the off shore accounts must be targeted.

  • This is one of many rebuttals being provided to correct the numerous untruths contained in Rowley’s reply to the Budget speech:

    THE Finance Ministry is seeking to rebut what it described as several allegations made by Opposition Leader Dr Keith Rowley during his contribution to the 2014/2015 Budget debate last Friday in the House of Representatives.

    A Finance Ministry statement covered issues such as the Elite Sport Programme, First Citizens Bank (FCB) Initial Public Offering (IPO), National Gas Company (NGC) and fiscal responsibility. On the Elite Sport Programme, the ministry said, “We wish to assure the public that this administration’s support for TT athletes continues unabated.”

    Noting the programme was established under the former PNM administration, the ministry said it “continues as conceived and while there has been a slight delay in the disbursement of funds to some athletes in the programme, this has since been rectified.”

    The ministry said it was wrong to suggest that Government’s decision to utilise sport as a crime- fighting strategy through programmes such as the Hoop of Life and now terminated Life Sport programme, resulted in the curtailment of the Elite Athletes Programme.

    The ministry reiterated the steps taken to audit Life Sport, lay the audit in Parliament and send copies to the Attorney General, Director of Public Prosecutions (DPP), Commissioner of Police and Integrity Commission “for action as they see fit.”

    On the IPO, the ministry said, “All questionable transactions regarding this IPO were referred to the SEC for investigation.” The investigation into the purchase of shares by the First Citizens Chief Risk Officer continues. The SEC saw no need for further investigation of any of the other purchases,” the ministry added.

    Regarding NGC, the ministry said the company’s profits after tax for the period 2012 and 2013 were $8.3 billion. Stating the projected profits after tax for this year is approximately $5.6 billion, the ministry said, “Of the total $13.9 billion, a total of $6.6 billion has been or will be paid as dividends to December of this year.”

    The ministry explained this is not unusual and “allows the NGC to retain sufficient funds for its expansion programme.”

    In terms of fiscal responsibility, the ministry said it is intent “on continuing its measured approach to managing the country’s resources. We are committed to reducing the deficit by one percent per annum and have accelerated that process in the current fiscal year,” the ministry added.

  • Raff, you and I know through sound understanding of government management and public administration, that the only thing that really matters (in the end ) is good, sound policies. If there are good policies, you get good results, if there are bad policies you get bad results. What we are experiencing, especially in this administration is expediency replacing policy and that is very dangerous. The budget is filled with nicieties that is not balanced by incoming revenues to negate the deficits they incur. We have an uninformed public that is more attuned to sound bites than planning and policy making. So, who knows that best than Kamla?, a wily old vixen that she is, offers only anecdotes to complicated state matters because she knows when the time will really matter for accounting she would not be around to offer any substantive solutions (which she doesn’t have answers to anyway). Public relations is her biggest strength and there are those who are still enamored by the fact that she is the first woman prime minister and looks fabulous in any ethnic outfit she tries on. But substance? She is absolutely bereft of any talent in proper management and personnel choices in choosing competent managers. She has committed so many blunders of epic proportions and tell so many lies that if she wasn’t the prime minister she could have been hauled into jail as an ordinary criminal. First, she appointed a clerk in SAUTT to replace a highly decorated, defense force officer, with a lot of military and intelligence credits to his name as chief of intelligence. The national uproar that emerged from this news caused her appointee to withdraw her name from consideration. Next, on the appointment of Jack Warner to serve in the cabinet, Dr. Keith Rowley in his position as Leader of the Opposition, advised that it is in fact a conflict of interest to have him serve as Vice President of FIFA, president of CONCACAF and a government, she disagreed and had Ramlogan seek high powered legal interpretation to prove that her appointment was legal, well, we know how that turned out. She has had a good 30 plus percent of her ministers turn out to be questionable or whose conduct warranted that they be dismissed from their appointments.
    This woman called a state of emergency because she said that people were out to eliminate her, putting the whole country on alert and operating under different powers than ordinary for a good period of time. Over four thousand arrested and locked up, with cases pending from ordinary suspects to being arrested for suspected of planning bodily harm against the PM. All cases were dropped, all suspects released and there were no evidence to for the action taken to deprive them of their civil rights. She publicly announced that she ‘bribed’ finance minister Howai into accepting the job. Whilst he had stella performance as the head of FCB, his performance as finance is up till this point very poor indeed. He never met a request for money he didn’t like, except for Tobago, which handed Kamla a whooping in the THA elections that money was spent like rain to beat the PNM to no avail. The only thing that came out in the contest was a statement by a member of the THA assembly referring to the “Culcatta ship” which the UNC has made a capital offence against Tobago just as they did against Dr. Eric Williams for saying or referring to them as a “recalcitrant minority”. Ramlogan’s hate for Dr. Williams was that because he did not have a hindu in his cabinet, ho! big charge. Kamla on the other has been against Trinidad becoming a member of the Caribbean Court of Justice, not because the need exist for it’s existence, or those comprising the justices were unqualified or the location was in the wrong place but because there was not an Indian yet selected to be a member. This woman has either encouraged wrong doing in her cabinet by protecting wrong doing by her ministers or hiding the truths about their behavior and conduct that were not becoming of the office that they held. Obnoxious ministers such as Anil Roberts appeared on video in a hotel with prostitutes. When asked if she recognized him in the video she said that she did not recognize him. All the world around her knew it was Anil but she didn’t. She allowed the funding of the life support programme to increase twentyfold with the view that it was to save “little black boys” with the board loaded with Indian executives, she has been at the top of every mis-steps. She appointed Ramlogan to investigate himself after the Solicitor General complained about Ramlogan’s suspected implications in the matter. Of course, Ramlogan was too glad to investigate himself and find himself ‘not guilty’. Because of her we have a Central Bank being governed by incompetence and practices that encourages policies whereby those with less than honest intentions can find solace in. FCB public offering was a laughing stock ala Ramlogan, where the chief risk officer awarded himself the lions’s share of the offerings. Of course not one has yet been made to be responsible for that matter. This woman is a dunce. On one hand she tells the public that she is offering the voting public more democracy, then on the other she goes to her base and tell them “don’t split the vote”. Petrotrin has the worst record in management in all the years that it has been under the management of the state. Oil spills, people being sick, fisherfolk loosing investments and many other things happening. Yet, there are those willing to offer her as the ‘best prime minister ever’. God! this country has gone backward by twenty-five years under the mantle of her leadership, and if allowed another we will end up being fifty more years behind. Incompetence, favoritism, racism, mis-management, bad judgement, lack of humility, unfairness, lack of moral judgement reins supreme under her leadership. Look at the way she treated Jack Warner, a man who spent his own money to elect them into office, a man who changed his religion from Catholicism to hinduism to show how much he believed in the UNC, yet she booted him out of the party. This is a man who referred to her as “Queen Lqkshmi”, went at odds with his people to show how much he cared for the UNC and when the time came she could not find a place in her heart to defend him. This is a man who went against his family’s urgings to defend her government, yet she could not defend him. What kind of person is this? What kind of a person calls parliament from vacation and asks them to vote on a bill the public knew hardly nothing about? There are many evils in her character and the evidence and history will bear her out as the worst prime minister this country has ever seen. To crown it all, she takes her cues as leader of the country from a renowned racist in the person of Sat Maharaj. These and other mis-steps and mis-deeds CANNOT stand out as being ‘good’ for this country and for her leadership. She is in effect – a failure!

  • Here is a statement on LNG outlining the facts as opposed to Rowley’s lies in his reply to the budget statement:

    THE liquefied natural gas business is alive and robust in Trinidad and Tobago, Energy Minister Kevin Ramnarine said during yesterday’s budget 2014/2015 debate in the Parliament at the Port of Spain Waterfront.
    Addressing criticism that Government had continued too heavy a dependence on oil and gas, Ramnarine said his ministry had not only rearranged the way business was done, to reap greater benefits for the Treasury, but had also shifted export focus to South America.
    Ramnarine said this country was no longer only reliant on the United States to buy natural gas and was now receiving around ten per cent of the LNG produced locally.
    The Energy Minister said Government could not control the shale gas production in the US, which is being called the “shale gale” and which energy experts in T&T now regard as being too tough competition for local production.
    Ramnarine sad Government was, however, doing what was necessary to diversify within the energy sector and had, through its foreign energy policies, attracted the attention of the three biggest global economies—the US, China and Japan.
    He had earlier said that Government had uncovered numerous, possibly fraudulent transactions in the energy sector during the People’s National Movement’s time in office, including millions spent under the defunct Alutrint company for suspect activities. Ramnarine said millions were spent on office supplies and foreign travel that could not be justified.
    Turning to the Petrotrin oil spill that devastated parts of the southern peninsula in December 2013 and January 2014, Ramnarine said Government continues to invest heavily in upgrading the State-owned company’s aging infrastructure.
    Calling the spills “unfortunate”, Ramnarine said it was his understanding that the company had since paid out some $22.5 million to residents of affected areas, including heavy-hit La Brea.

  • P.S.
    Illegal businesses impact serverly on Governments’ ability to uplift the spirit of their Constitution to which binds all citizens.

  • The pnm has always been vindictive,racist,divisive & spiteful against Indians since eric williams got into power illegally by introducing the voting machines!

    • Are there any positive comments which you can offer about the late Dr.Eric Williams?

    • My recollection serves me correctly: The voting machine (a giant computer)was introduced to prevent those “deceased people” who cast ballots…..

      • Swordfish, it was OPENLY part of the UNC plan to criticize Dr. Rowley and the PNM no matter what. So, Intricate is just being intricate by exercising the opportunity to criticize, it does not matter if what he is criticizing is true or not. It has been said that negative advertising works, so Intricate is following that advice.

        • Kian:Maybe,”intricate” meant to adopt the pseudonym “inebriate”

        • I gather the PNM tune was “the saints marching in”. Let’s do some Math.

          ROWLEY, AL RAWI & DICK-FORDE have questions to answer.

          • It should be noted that the Board of UDeCOTT agreed to award a contract of $67.62M to China Jiangsu International Corporation (CJIC) for the construction of 297 apartments. However, UDeCOTT only managed Blocks A and B in which 56 units were built.

          Further, HDC managed Phase 2 which encompassed Blocks C – I and yielded 116 units. In total therefore, only 172 apartments were constructed!

          What this means is that there were an additional 125 units which were paid for but which were never constructed!

          SOME QUICK MATHS:

          $67.62 million divided by 297 apartments = $225.000 approx per unit
          ROWLEY said $90 million were spent. Only 172 units were delivered. $90 million divided by 172 apartments = $523,000 approx per unit, so almost doubled was paid per unit.

          OR $90 million divided by 297 apartments = $303,000 approx per unit. THEN: 172 apartments by $303,000 = approx. $53 Million
          NOW: $90 Million minus $53 million = $37 Million MISSING!!!!!!!!

      • There was another analogue feature ‘it’ did, which was the multiplying effect unsuspectingly. You get out of ‘it’ what you program it to do. How can you get more votes than the number of electorate in a particular district even if you included the deceased within allocated time frames? That’s why it was kept at Golden Grove for safe keeping after one ‘serving’. Not to be used again, money well spent!

  • I think we now have a better understanding of what the purchase of the armored cars and body bags were all about. The stakes have now gone airborne and it is a “my way or the hi way” scene.
    God bless us all! This is politics at it’s worst!

  • The manipulation of the “marginals” began during the early PNM years when they recognized that the results in these ridings decided which party formed government. The voting machines were introduced and quickly abandoned when the country became suspicious of the questionable and surprising results which these machines produced. The general conclusion was that they were rigged. Remember that voting machines were used in the USA to neutralize the Black vote.They were used in T&T to give the PNM an advantage in elections. This was the proposed theory but never proven.Later, house padding became the tool used by Manning to create an advantage in the marginals.The latest poll clearly shows how important it is to win in the marginals.Many believe that the “run-off” is the PP’s trick to win in the marginals.

  • I do not know what is the expectation of Mr Raffique Shah. For years all the T&T budgets were about …was for the party in power to have a feast day spending the monies earned by the normal hardworking population. For years we were told production was in our very best interests while the con artist who ruled wasted took our monies and feted their way in doing just that…enjoying themselves. All they ever wanted from us in return was a stain on our finger to give them the opportunities to continue to scam us. The G8s provided all the know how and we fell down the stairwell of the poverty line each year hearing from them how good we have it. They continue to do just that and in your article we are just given a pittance to make us feel good (and of course the divide and rule policy rolls out all the time) while they continue to out class the O’Halloran of yesterday by thiefing more and more each year. They should talk more about how their Trini friend really met his death in Kenya (God doh sleep). Yes, I still remember how Amoco stole over $60 Billion US dollars from us back in the pre70s and still many in government got filthy rich to allow them to do so without any regard for the nation where every creed and race were supposed to find an equal place. First it was the french creoles then came the Afro portions of the community and it is now the Indo portions ( the recalcitrant get rich quick minority )that are helping themselves. They reach! All ah we tief. But that was not all of us was it. Year after year we hear big speeches from the Judiciary, The Prime Minister, The Finance Minister and the President etc. …all who do nothing but sit on their arses and do nothing to really improve life in T&T. And to thief more they are always looking for a huge foreign contractor. And the shit goes on and on year after year and yet they want to celebrate 50 years of what …thiefing. When will it end? When will we really get a government who wants to improve things for the Trini.

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