That was the consensus of economists participating in Friday night’s virtual conversation: “A hard look at the macroeconomics in 2022 and beyond,” hosted by the University of the West Indies’ (The UWI) Department of Trade and Economic Development. was hosted. The economist Dr. Roger Hosein, former Treasury Secretary Karen Tesheira, former Energy Secretary Kevin Ramnarine and former Planning Secretary Dr. Bhoe Tewarie spoke at the forum.
Tewarie said the only hope for an improvement in the economy is food self-sufficiency, fighting crime, implementing measures to stimulate the economy and the technological direction the world is moving.
“There is no way the government can say they don’t know the facts. The facts didn’t just fall out of thin air. They are there for all to see, understand and comprehend and when we make bad decisions it is because the government chooses to do so despite the information available and that really is something that cannot be forgiven.
Tewarie added: “If you know the facts, the information is available, you know the challenges the country is facing, you know the prospects when you look at a worst-case, best-case scenario and you continue to do that Making wrong decisions and making decisions that continue to be wrong for the country, for society and for the economy, you can’t be forgiven for that,” Tewarie said.
Former Finance Minister Karen Tesheira said T&T’s private sector is not doing its part to revitalize or improve the economic situation in that country.
“What has the private sector really done? If it weren’t for the government, we wouldn’t have an industrial area at Point Lisas, and that’s a fact. If the government hadn’t taken the initiative again and attracted foreign investors like Shells and bpTTs, we wouldn’t have Atlantic LNG, and that’s a fact. Because the private sector just seems to want to focus on finance and insurance, and that was a big issue.
Tesheira said the private sector is not taking any chances.
“What has the private sector invested in? We have a lot to do with private investors because they have to take responsibility for the economy. If I look at some private sector interventions like PowerGen, that was the case with an international company. The only one I saw was Desalcott, but it was 40 percent owned by General Electric, so what did the local private sector contribute to that? I don’t accept the argument that they are supplanted. They choose to be overcrowded and go to safe havens where they don’t take risks and what they do is drain our foreign exchange reserves.
Tesheira said food imports are a big problem for inflation. “Food inflation is 8 percent. They buy and sell, and the companies they own are certainly not companies that encourage productivity in the country and offer substantial wages to workers. So their contribution was to go safe and let the government take the risk and actually resort to foreign exchange to increase imports and let a number of our citizens live on direct subsidies, which is about $10 billion. I see them as more of an obstacle to the development of our economy than usual,” Tesheira said.
She further explained that while there are a number of initiatives that the government could launch, implementation remains an issue.
“The government should seriously establish a farm-to-table education program for the development of a real agribusiness, like it did with natural gas. There are so many opportunities in the agribusiness for export, for food security and a reduction in our food import bill.
She added: “Cultural tourism is our competitive advantage and can be very well integrated with agro and agro-industry and community development. We need to set up a cultural center in Queen’s Park Savannah and the South and micro-enterprise educated people so they can contribute to the country. There is a lack of confidence and trust that we have earned because nothing has been implemented. The government has earned a lack of confidence and trust,” Tesheira said.
‘Lack of transparency’
Ramnarine pointed out that the government has not released an investment report on the Heritage and Stabilization Fund for the first quarter of 2022, which could be a sign that the report does not contain good news.
“Maybe that’s bad news that the government doesn’t want to share. The price of oil as we speak. The price of crude oil fell until the 1970s. I assume prices will continue to fall as Western European countries stumble into recession. The United States economy contracted in the second quarter of 2022 and the Chinese continued to have these very extreme Covid-19 measures. Of the major economies in the world, only India shows dynamism and life.
“Today there was an announcement that bp has sanctioned Cypre but I understand that by and large this amount of gas will not be enough to help us get out of the hole we are in,” Ramnarine said.
Ramnarine said it fell well short of the Treasury Secretary’s oil and gas forecasts. “Oil production remains a concern. At the end of August, the oil price averaged 59,000 barrels per day. The Treasury Secretary forecast 86,000 in his last budget, but that fell well short of the mark due to the failure of the BHP Ruby project.
He added: “The minister also forecast that gas would average 3.37 billion cubic feet in 2022, but we currently expect the average to be 2.7 billion so that forecast is insufficient. There’s always some level of error, but not that much,” he said.
Ramnarine said the ammonia price is promising. “The bright spot continues to be the ammonia price, averaging $1,100 per tonne. The Minister has raised a bit more revenue to play with. But there is a demand from unions for higher wages, teachers want more; and it’s a difficult time to be a minister. I think the government has to deal with the country and there is a huge lack of transparency,” Ramnarine said.
Hosein said he has more faith in the IMF’s economic forecast than in the government. “The IMF determined that real GDP for 2021 would be minus 1 percent and when I heard the Treasury Secretary speak in the mid-term review for 2022, I was surprised by some of the words he used to describe the economy as everything is booming and everyone Sector is making good progress,” Hosein said.
He added: “I thought the IMF made a mistake and didn’t understand Trinidad and Tobago’s economy well until I saw the finance minister himself in his Spotlight on the Economy presentation showing a decline for 2017, 2018 , 2019, 2020 and 2021. We’ve never had five straight years of decline. We’ve had six straight years of decline, and that’s a depression. Not many countries in the world experienced six consecutive years of decline between 2016 and 2021 and that’s why we’re poorly differentiated,” Hosein said.
“One of the things that really surprised me was that in 2022 the fiscal balance was essentially still in deficit. For 2021 itself, most of the world’s economies have improved, but Trinidad and Tobago still found a way to finish in the top 20 underperforming economies in the world,” Hosein said.