Sending the wrong signals: Why Raffique is wary of ‘Santa Colm’

Raffique Shah Tuesday 1 December 2015 Guest Columns, View Point 6 Comments

If “Santa Colm” assures the populace that their Christmas will be bright, not blue, then we have no reason to doubt the man.

After all, Acting Prime Minister Colm Imbert is the substantive Minister of Finance, in which capacity he has access to data and information pertaining to the state of the economy, especially Government’s revenues and expenditures, that you and I will not see.

What we do know is that the energy sector, which encompasses oil, gas and petrochemicals, has been in trouble for some time now, suffering from “gas pain” and low oil production, and since late last year, from a near-collapse in oil and other petroleum products prices.

These bare facts, which are in the public domain, lead us to conclude that the Government will garner significantly lower revenues from the sector than it did one year ago, and several years before that.

But, as someone who tries to stay abreast of these developments because I strive to be an informed citizen, I often find it quite confusing.

For example, in fiscal 2013—October 2012 to September 2013—oil production averaged 81,000 barrels per day (bpd), and the average price of West Texas Intermediate (WTI) crude was US$100 a barrel. Natural gas production averaged 4.1 billion cubic feet a day (bcf/d).

Revenues from the energy sector—presumably including petrochemicals such as ammonia and methanol but maybe not all revenue streams (royalties, profit sharing)—amounted to $26.4 billion.

Photo: Oil prices remain a real source of concern. (Courtesy Earthtimes.org) — Photo: Oil prices remain a real source of concern.
(Courtesy Earthtimes.org)

In fiscal 2014 with oil production slightly lower, gas the same but WTI price averaging US$59 a barrel—a 40 percent drop—energy revenues climbed to $28 billion. Don’t ask me how that happened: ask the experts who compiled the Ministry of Finance’s Review of the Economy.

This confusion did not come from the Central Statistical Office (CSO), where data is mostly outdated, or the Central Bank, which has some relatively recent bulletins but some equally ancient publications on the economy. In fact, I find that even the once-reliable Ministry of Energy Data-centre is lapsing: its most recent monthly bulletin is for the month of August.

But I digress. I was saying that in the face of all the bad news coming out of the energy sector, the gas curtailment crisis that has negatively impacted many of the petrochemicals plants, the Finance Minister is telling us that we can enjoy ham, lamb and jam for the Christmas, and not worry about tomorrow or next year.

He promised to pay outstanding monies due to public sector workers—more than $1 billion I believe—based on generous increases awarded by the PP Government, about a week before Christmas.

Now, I can’t blame these workers for licking their chops in anticipation of a really merry Christmas.

Photo: Bring out the ham... (Copyright caribbeanpot.com) — Photo: Bring out the ham…
(Copyright caribbeanpot.com)

I wonder, though, whether Mr Imbert has given consideration to several other categories of public sector workers, from lowly Forestry Division employees who are owed several fortnights’ pay, to some doctors who are in a similar position.

And while I know that NGC employees are well-paid by any standard, is the invitation to blow it all for the Yuletide extended to them, facing a wage-freeze as they are?

Really, I think the Minister should be more circumspect in the signals he sends to the populace, especially when they seem to be at odds with the Prime Minister’s exhortations. Shortly after he assumed office, Dr Rowley said that the “gas curtailment” situation was real and disturbing.

And in view of the outlooks for both oil prices and the national economy, he expressed concern over the wild consumerism that seems to have gripped the society. This has not eased.

Last Thursday, the very wealthy and Americanised among us feasted on huge turkeys, and the Black Friday shopping spree has descended upon us with all its frenzied negatives.

Photo: Shoppers fight over sales on "Black Friday" in the United States. (Copyright UK Daily Mail) — Photo: Shoppers fight over sales on “Black Friday” in the United States.
(Copyright UK Daily Mail)

No one wants to be a “Scrooge”; not in this country where Christmas has long crashed past the race and religious barriers. People must enjoy themselves. But they must be mindful of the precarious state of the economy, of not splurging.

Tomorrow might well turn out to be grim. Recently, Goldman Sachs released an oil-price outlook that projected as low as US$20 a barrel next year before any recovery. They pointed to strategic reserves in countries like the USA and China almost filled to capacity, and scores of oil tankers laden with crude, anchored at sea.

These pundits are often wrong, and we have to hope they are. If the price goes that low, “we dogs dead”, as ‘Trinis’ would say.

While the Finance Minister must instil confidence in the population, he must also inject a dose of reality in the residents of Rum Street, Trinidad, who, in the worst of times, party like there is no tomorrow.