Clint Chan Tack
FORMER planning minister Dr Bhoendradatt Tewarie says Finance Minister Colm Imbert did his best in the 2022 budget to address concerns raised by various stakeholders, and present a fiscal package that gives a modicum of hope to TT as it navigates its way out of the pandemic.
But despite the best intentions of Imbert and the Government, Tewarie said there remains a lot of maybes as to the success of some initiatives in the budget in the short, medium and long term.
The former Caroni Central MP offered this perspective when he addressed a virtual post-budget forum hosted by the Port of Spain West Rotary Club on Wednesday.
“My approach to this budget is not to be overly critical but give credit where credit is due, and raise things that we might want to think about as we respond to the budget.”
Tewarie said commentaries on the budget often rely on snippets of information and do not realise “the impact of some of the things that are said.”
With all budgets being predicated on assumptions, Tewarie examined the US$65 per barrel oil price and US$3.75 per mmbtu gas price the budget was pegged against.
“These are based on projections on rising (oil and gas) prices and the trajectory for rising prices is very good.”
While recent high oil and gas prices may have assured Imbert in setting those benchmarks. Tewarie said, “But if in this assumption, I had to say yes, no or maybe, I would probably say maybe.
“Five years ago, if we had a forecast that was pretty strong, we could probably take the chance that it was likely to be a good forecast.”
But Tewarie said the world is in a period of unpredictability, which includes the covid19 pandemic and any other crisis emerging as well.
“It is very hard to say yes that is a good choice.”
He added, “I would not say no because all the evidence suggests it is a good choice of (oil and gas) price.”
On the budget’s projected revenue of $43.3 billion, Tewarie said, “Again for that, I would say maybe. There is no guarantee that we are going to make that revenue.”
Referring to the budget’s projections for energy and non-energy sector growth, being based on major energy sector projects coming online and gradual reopening of the economy due to covid19 vaccination, Tewarie said, “Right now, we have one-third of the population vaccinated and two-thirds of the population unvaccinated.”
Tewarie said the return to normalcy in TT is also premised on the covid19 safe zone initiative which starts on Monday.
“We don’t know how that is going to work yet and how practical that is going to be, and we are doing this in the middle of a delta variant.”
On projected three per cent economic growth in 2023, more revenue in 2023 and a balanced budget in 2024, Tewarie said, “I believe that those assumptions are dicey and therefore I think the result he is articulating, have to be taken with a certain grain of salt.”
Tewarie welcomed several of the fiscal measures in the budget such as incentives for exporters and small and medium enterprises.
After claiming the previous six budgets destroyed confidence in the economy, Tewarie said, “This budget in the face of covid is a total reversal of the policy disposition and approach of the past six budgets.”
In this budget, Tewarie continued, Imbert has “put the private sector at the centre of the development process.”
While the budget favours private sector action and initiative, Tewarie cautioned,” The Government will still be in control of facilitating mechanisms for development and for private sector freedom to engage.”
He said Government must be careful not to undermine its own stated intentions “by either intentionally sabotaging the incentives it is giving business to invest or unintentionally, that is simply in the way it behaves in the bureaucracy.” The bureaucracy, Tewarie continued, has to be transformed “to unlock private sector potential.” Tewarie also warned any political arbitrariness could “disrupt any kind of entrepreneurial and investment energy in the country.”
While Government’s relations with the labour movement has been bad, Tewarie saw Imbert’s announcement of directing the Chief Personnel Officer to settle all ongoing wage negotiations as an attempt to mend fences with trade unions.