Noble: Embracing the future; T&T economy is being sold short by ‘outdated’ ideas

We are made wise not by the recollection of our past, but by our responsibility for our future.” — George Bernard Shaw.

To accept the virus-induced lockdown was, for the most part, a no-brainer. To exit is not. Indeed, the public comments of the major business organisations show us more clearly their underlying values and perspective.

We cannot go forward by yearning for the past. This virus has disrupted our lives globally.

Photo: Prime Minister Dr Keith Rowley (right) addresses the media while Minister of Health Terrence Deyalsingh (centre) and Minister of Finance Colm Imbert look on.
(via Office of the Prime Minister)

A concerted backlash by almost all the business groups to the recent re-opening announcement by Prime Minister Dr Keith Rowley sprung to life within hours. Fascinatingly, AMCHAM had the most nuanced approach. We are being asked, by some, to believe that the sooner the restart the better chance there is to save our lives and livelihoods.

Blissfully, they ignore the limited upside of our country trying to be the first to open when the rest of the Caricom region and our major trading partners are still struggling with bleak outcomes. We are a small, open economy with an out-of-size dependence on energy and a Caricom market for our manufactured products.

Our economic structure is like that of Sweden which has manufacturing instead of energy products. A 10 May Financial Times article, discussing Sweden’s chances to leapfrog its neighbours post Covid-19 due to their ‘no lockdown’ approach, concluded that there would be little or no difference.

We ignore the fateful Jamaica decision to put business ahead of health. They did not close down as quickly or as early since they weighed in on the side of keeping business open. This is despite the reality that they have had more fiscal space than ever before due to excellent work by the current administration. The result? Over 500 cases.

They have now doubled down with their relaxation on the bars and churches. How is that going to help their economic recovery?

Image: A satirical take on the Covid-19 pandemic and the economy.

Our ‘best’ minds long for a return to ‘normality’, refusing to accept that things have been irrevocably changed. We expect a miraculous recovery. Or prepare to curse the incumbent. Cold fact? There is no miraculous recovery coming. None.

Informed consensus is that we are facing a recession that is of the Great Depression stature or ten times the size of the financial crisis, which would last up to four years at best. The quicker we accept this grim possibility, the better and faster we can prepare to deal with it. This economic pain will not be blunted by a Panadol; it is a morphine type problem with long-term effects.

There is no value in cursing Dr Rowley since the parameters of the economic crisis is unprecedented—I hate using this word, but it is larger than anything in my lifetime, therefore I use it in that context. We need to steel ourselves to uniting and finding a way out, or at least showing our mettle through bare survival.

A huge hurdle for opening up the economy is the issue of testing and contact tracing. There have been questions, correctly asked, about the level of testing being done. Yet no business grouping has discussed how it may be achieved or stepped up to fund the same since presumably ‘it is the government’s role’.

Dr Paul Romer, a co-winner of the 2018 Nobel Economic award, helpfully proffered a cost/benefit analysis approach for this process. We have not even acknowledged this level of discussion.

The 2015 quarrel about the use of the Heritage Stabilization Fund to ease the then pain of the masses is now ironically dissipated with a lining up for a share by the business community. There is no discussion about how this ‘free money’, now estimated to be $6 billion, will contribute to the transformation of the economy.

Image: A satirical depiction of Covid-19 financial relief.

The attitude appears to be ‘hand us our share’ and we will save jobs—but there has been no supporting analysis nor commitment to any tangible action. Not even the churches appear to be bound to specific performance deliverables. There is no discussion about the inevitable need for more funding later on either.

Having been silent earlier (except for the TTMA President) about the non-implementation of the Revenue Authority, the business and labour communities now magically expect that government will have enough money for direct injection of cash into businesses.

Without acknowledging the monetary incentives provided and therefore negotiating with their banks for lowered rates; or the partial payment of the long-awaited VAT debt locally, previously touted as an essential to keep businesses afloat, and without an acknowledgment of the global capital stampede being witnessed since the start of March, the business sector needs to argue why it should be trusted.

When the government ramps up debt at the same time that there is capital flight, there is a great risk of damaging the value of the dollar. Why do we not discuss how to mitigate this?

Rather than create a counter-discussion to Dr Rowley’s phased opening plan by raising the issues re-linkages within the economy or the multiplier effects of certain sectors or their impact on foreign exchange and employment or their capacity to transform the economy, we have a grumble-fest. No talk now about economic diversification.

The reopening plan should have been based on a transparent economic proposition. It is not just about managing the health risks.

Photo: Out of ideas?
The Idea Factory in Penal is closed too during the Covid-19 pandemic.
(Copyright Ghansham Mohammed/GhanShyam Photography/Wired868)

Arguing correctly about the lack of consultation, why does the business and labour communities not fill the column inches in the media with reasoned arguments thereby strengthening their case for their vision of the country’s future?

It is apparent that either there is no real plan on the part of these groups, or they are hoping to bully the public purse into being loosed. Why do they not acknowledge the public as an important audience? The absence of a response from the government should not inhibit them from engaging the public.

Instead, the tired ‘old’ economics gurus and/or politicians—I cannot discern which hat is being worn at times—who do not accept the irrevocably changed world realities, trot out outdated fare.

There is no discussion about how to deal with the new realities or how to manage the possible roll-backs, should there be new outbreaks. No discussion about risks and benefits. No discussion about improving the life-chances of the poor through infrastructural investments in health and education, so that the nation could benefit post Covid-19.

We lack imagination and beat the same drums over and over. What a mess.

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About Noble Philip

Noble Philip, a retired business executive, is trying to interpret Jesus’ relationships with the poor and rich among us. A Seeker, not a Saint.

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One comment

  1. When I got to “We lack imagination and beat the same drums over and over. What a mess.” I stopped reading.
    Fascinating stuff, Noble, and liberating stuff, I suppose for you. But I am sure you’re not waiting for me to tell you that it won’t win you any friends in this messed up country.
    Here, not to toe the line is prêter son flanc à la critique.

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