By Raffique Shah
June 03, 2020
Memo #3 to Post-COVID-19 Recovery Team: Friends, Trinis, countrymen (and women). I feel certain that by now you will have submitted preliminary recommendations to the Government. I imagine the most urgent challenge is the state of the country’s finances, how best to manage our dwindling resources and severely reduced revenues, balancing these with servicing our huge debt—well over TT $100 billion—repayments being some $4 billion per annum.
Examining government revenues and expenditures over the past ten years, one notices that while the latter will remain significant, maybe balloon when COVID-related expenses are added, the former will decline because of a number of factors, some of which could have been avoided with more prudent governance. Now is not the time for recrimination, though. That is best left to the politicians, and is sure to come during campaigning for the general election, which is well underway.
For example, energy sector revenue fell from TT $28.5 billion in fiscal 2014 to $14 billion in fiscal 2019. Readers should note that the all-important sector’s revenues fell as low as $7, $8 and $11 billion in fiscal 2016, 2017 and 2018 because of low oil and gas production, and taxation arrangements that were favourable to the foreign oil companies. While government reined in expenditure from a high of $62.8 billion in 2014 to as low as $48.8 billion in 2018, it ran a budget deficit every year except 2017.
From another perspective, oil companies paid taxes as low as $1 billion, $1.1 and $2.0 billion in 2016-2018, whereas individual taxpayers’ contributions were $7.1, $6.3 and $6.0 billion over the same period. Public sector wages and salaries averaged just over $9 billion per year during the period, and transfers and subsidies swallowed from $25 billion in 2017 to $35 billion in 2014.
Clearly, post-COVID-19, the country can ill-afford these huge subsidies. But there are contractual obligations that government must fulfill with respect to wages and salaries, and politically-sensitive subsidies it won’t want to touch, especially in an election year.
As citizens, we are all mindful of the levels of poverty that still exist in this country which is financially better-off than many of its Caribbean neighbours. The Corona-virus-pandemic has exposed a dark side of the society that we cannot be proud of. But how we fix that, and many of the other inequities that bedevil us is what can leave us cutting-and-pasting and hoping that things will get better. They won’t, if we fail to make radical changes that will usher in a new economic order.
Two weeks ago, in this space, I suggested that in order to ease the pressure on demand for foreign exchange, government consider suspending the importation of motor vehicles for at least one year, which will save us at least US $225 million. Predictably, one dealer questioned my sanity. He did not mention that his lot is currently filled with foreign-used vehicles that he will hardly sell this year because of the unhealthy state of rhe economy.
However, I move on-to examine prospects in the short-to-medium term recovery plan. A sector that most economists and governments either gloss over or ignore is entertainment. Most people see it not as a profession or business, but as a few talented individuals having a good time. Let me sound a wake-up call. Think of millionaires and what names come to mind immediately? Stars of the music, movies and other performing arts worlds. You can name ten, fifty, a hundred before you even think of attorneys, medical doctors, scientists and other professionals.
People who have been pounding the doors of politicians and investors, trying to shake them into understanding the potential for profits in this field—Josanne Leonard and Brother Resistance come to mind—have grown disaffected and abandoned their pursuits.
What more do we need to shake up our appetites (to misquote the Mighty Sparrow) than examine the success of Machel Montano? Now, I am not a Machel fan. I know he is a capable vocalist, but he makes his millions barking at thousands of screaming, gyrating fans, and more importantly, they pay big money to attend his concerts, purchase his recorded music, even to buy his brand of fine chocolates.
I have often heard it said that this country has more artistic talent per capita than any other, and there is an abundance of evidence to support that. We have scores of composers, musicians, singers, pan virtuosos, chutney artistes, gospel singers and so on. True, superstars in the performing arts are fewer in any generation—David Rudder, Andre Tanker, Mungal Patassar, Garfield “Shorty” Blackman, Sparrow, Kitchener, etc. But it does not take a superstar to command attention, to attract large audiences, and most of all to generate income.
Besides the performing arts, we have creative young people in fashion designing, the culinary arts, furniture making, literary pursuits, craft, dance and more, much more. Recently, I remembered Wilbur Balgobin who ventured initially into exotic-flavoured ice cream—barbadine, soursop, sapodilla: we may not have the wherewithal to take on Haagen Daz or Swiss transnational Nestle in standard-flavours ice creams. But we can beat them in exotic flavours, of that I feel confident.
The bottom line to this suggestion is that we set out to harness such talented nationals who need seed capital to convert their businesses (or talents) into marketable products that can either generate or save us hard currency. We set out to find 200 in the first year, and once their prospects and business plans are sound, or can be tweaked and made operational, be prepared to fund them up to $500,000 each ($100 million total), and let them go forth and make us proud of brand Trinidad and Tobago.
The essential driver of this proposal is that recipients must repatriate a significant portion of their foreign exchange earnings. If we eliminate corruption and put country before self, and half of the 1,000 entrepreneurs come through successfully, we can add at least US $500 million to the Treasury per annum, and we will have helped create 500 to 1,000 T&T millionaires, and many more well-off support staff.
That’s more equitable than one or two billionaires skimming off all the cream. It is also a case of thinking small, scoring big.