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In August this year, I expressed concern that our country might go broke. A month before, commentators had been calling for an explanation of a withdrawal of TT$1.09 billion from the Heritage and Stabilisation fund.
Accountability for the nation’s assets seemed to require specific identification of what aspect of public expenditure the withdrawal from the Fund was used to support. See Trinidad Guardian, 11 July 2024.
(Copyright UK Telegraph)
Currently, renewed disclosures about the parlous state of our public utilities—which have been propped up by our governments—together with the constantly growing restrictions in the availability of foreign exchange have re-fueled my concern.
It was reported in the Trinidad Express on 16 November 2024 that state agencies owe the Trinidad and Tobago Electricity Commission (T&TEC) TT$1.9 billion and T&TEC owes TT$6.16 billion to the National Gas Company for the purchase of gas.
Earlier, on 15 May 2024, the Trinidad Guardian reported that the Water and Sewerage authority was owed TT$146 million by state agencies including ministries and had significant loan debt.
With regard to foreign exchange (whatever the government’s judgmental pronouncements about the use of credit cards and its claim about pressure from special interests to devalue our dollar), the simple fact is that our country no longer earns the foreign exchange which used to flow into the economy.
Let me digress to relate a pronouncement which typifies governments seeking to blame sinister forces when it is not in control of a situation. The British pound was under pressure in 1964 and there was talk of devaluation when the Labour Party under Prime Minister Harold Wilson had come into government.
At one point, Wilson, in a derogatory reference to Swiss bankers, publicly blamed Britain’s currency problems on “the Gnomes of Zurich”.
Are the special interests to which our government has referred the Douens of the TT Wealthy?
Because our country no longer earns the foreign exchange to support the lifestyle to which we became accustomed, we are a straight case of champagne taste and mauby pocket.
As part of the high living days, we tolerated governments in office running budget deficits, borrowing money on the international market and incurring debt obligations that have to be paid in foreign currency.
This government ran up international debt but is now criticising citizens for running up foreign currency debt by credit card.
There is authoritative material which underlines the relevance of the decline in energy sector revenues. The International Monetary Fund (the IMF) Trinidad and Tobago Article IV Country Report, No 24/150, published in June 2024, was justifiably welcomed by our Minister of Finance because it contained a number of positive and re-assuring assessments of our economy.
Photo: Office of Parliament 2023
However, IMF report No 24/151, on the select issue of building a rules-based fiscal framework for Trinidad and Tobago, also published in June 2024, states as part of its introduction:
“Between 2010 and 2019, declining production due to the country’s maturing fields and lower energy prices, consistently weighed down the sector’s contribution to economic activity and government revenues.
“The sector regained momentum following Russia’s invasion of Ukraine but continues to face important structural and cyclical challenges that will affect the country’s foreign exchange earnings, fiscal accounts, and the overall stability and sustainability of the economy.”
Between 2019 and the present, the oil and gas sector’s contribution to the economy and to government’s revenues has remained in a state of decline. We have been told “to hold the fort” until 2027 when it is expected that gas from Venezuela will become available to boost production.
One projected source is the Dragon Gas field. Last week I noted that the Minister of Energy informed Parliament that “as expected in the normal course of processes and timing, Shell has not made a final investment decision for the production of the Dragon field”. See Trinidad Express 17 November 2024.
During the period of continuous decline between 2010 and 2024 we had a change of government to the United National Congress/Partnership in 2010 and a change back to People’s National Movement in 2015, which was re-elected in 2020.
Did either party take meaningful steps to mitigate the effects of the decline? Where will the accumulation of deficit spending over decades eventually take us?
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Martin G Daly SC is a prominent attorney-at-law. He is a former Independent Senator and past president of the Law Association of Trinidad and Tobago.
He is chairman of the Pat Bishop Foundation and a steelpan music enthusiast.
