Memo 02 to Team Recovery: Freeze motor imports
Posted: Monday, May 4, 2020
By Raffique Shah
May 4, 2020
Memo 02 to the post-COVID-19 Recovery Team: Gentlemen, and the few ladies among you, greetings. I have chosen to communicate with you in full glare of the public because I do not wish to be seen as saying and doing nothing when my country needed every citizen to contribute what he or she could in the aftermath of a disaster such as the world has never experienced.
Global economies are in disarray, caught in a massive cloud of uncertainty. The local economy faces its gravest crisis ever. Your task, as I understand it, is to chart a road map to economic and social recovery even as the deadly COVID-19 virus cuts a swathe of destruction that seems set to touch every country in the world, wreaking death and destruction in its path.
Trinidad and Tobago was already in a state of economic and social turmoil when COVID came a-calling. The bedrock of our economy, hydrocarbons, was unstable, to say the least. Production levels and product prices had fallen significantly, and little else was in place to rescue us. Crime has penetrated and permeated the fabric of the society, adding to the cost of doing business, and rendering almost an entire generation useless to themselves and their country. And what the criminals have failed to plunder, certain politicians have pounced upon, shamelessly fomenting racial strife to further their ambitions, their greed for power.
Team Recovery must rise above such narrow self-interests, and do good for the country. In the aftermath of COVID-19, all of us must ask not what our country can do for us, but what we can do for our country. You from the Recovery Team must heed the voices of the people, see if they are making sense, and incorporate workable solutions to our problems they may have.
Hear me out: as an immediate priority, this country must generate more foreign exchange and simultaneously spend less. Government must not be allowed to dip deeply into the Heritage and Stabilisation Fund, or worse, into the depleted foreign reserves. Moreover, Government must not wait until this committee writes up a final report to act on its recommendations. What can be done today must not be left for tomorrow. It is imperative that the Government act promptly and decisively, the way it did by the pre-emptive closure of our borders when COVID-19 threatened to overwhelm us.
I recommend is that Government put an immediate freeze on the importation of motor vehicles of all classes. This country spends more than US $200 million per year on new and foreign—used vehicles, the single biggest item on our list of imports. It is the most wasteful use of scarce foreign exchange given that we already have more vehicles per capita than most countries, they clog up our roads and feast on fuel subsidies (at least diesel does).
No one will die if a one-year freeze is imposed. Few jobs will be lost, and we can save them, as I shall explain. The importers/distributors of both new and foreign-used vehicles will take a small hit—maybe TT $50 million (if their mark-up is 10 percent), and even that can be cushioned. The dismal state of the economy will force many middle class citizens to rid themselves of that third or fourth vehicle they currently own, and those in the higher income bracket will be both similarly shedding load, or trading in used vehicles to earn extra money.
There is no reason why car dealers cannot crash into that market, using their superior facilities to restore such vehicles to pristine condition and use their slick salesmen to market them. Hell, the salesmen could themselves enter the thriving trade and prosper.
If this freeze is applied, Government would save approximately $1.4 billion of the fiscal deficit of $15 billion that is threatening to strangle the country. Similar action can be taken with respect to other unnecessary imports—fireworks, luxury items like champagne and fine wines, whisky, brandy, brand clothing and assorted accoutrements, cigars and so on. We do not need these luxuries. The people who want them can buy them, but not with our scarce foreign exchange.
In any event, this campaign to save the economy from collapse must necessarily appeal to, and involve, the citizenry at large, which include the wealthy and the poor who are living above their means. Take the wasteful spending on harmful cigarettes: hundreds of millions of dollars go up in smoke, quite literally, day and night. The unhealthy habit imposes another burden of the nation, that of extending health care to chronic smokers when they are afflicted with deadly diseases.
My minor adjustments above can save the country more than $3 billion. On the other side of the economic equation, public sector workers, who cost the country approximately $9 billion per year, should give thanks that they have retained their jobs in the most adverse circumstances. They should ignore their garrulous union leader, apply themselves to the jobs they were hired to do, and see the country out of its current dilemma before seeking increases in wages and salaries. The same will apply to employees at state enterprises and other public institutions.
My final point (for now) to Team Recovery is that it look inward, it does an honest examination of the upper ranks of government and business, assessing the true worth of the relatively new breed of super-executives who are paid obnoxiously high compensation packages (they are above settling for salaries and bonuses), and judge their true worth to the organizations they lead and the real value that they bring.
Mostly, they are consumed with hubris, and organizations, increasingly those in the public sector, pay these corporate shysters far beyond their real worth, only to discover down the road that they are no more proficient than other quiet performers who get the job done for far more realistic salaries. Check out the low-profiled medical professionals, from the specialists to the nursing staff, who have guided this country safely (thus far) through the COVID-19 crisis.
Surely, there are lessons to be learnt here. And when (not if) we compensate them, it will be far below their true worth. After all, they saved lives, lots of lives.
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