Noble: Is this the road to growth? Can T&T put country before party?

On 4 April 2025, then Caricom head Mia Mottley, in discussing the global crises as they impacted the Caribbean, said:

“Our world is in crisis. I will not sugarcoat it. These are among the most challenging of times for our region since the majority of our members gained their independence. Indeed, it is the most difficult period our world has faced since the end of World War II, 80 years ago.

“Our planet faces a climate catastrophe that worsens every year. We have a cost-of-living crisis that has been bedevilling us since the disruption of supply chains, when the Covid-19 Pandemic triggered the shutdown of the majority of countries.”

Dr Nigel Clarke, the deputy managing director at the IMF and former finance minister of Jamaica, pronounced at the 55th Annual Meeting of the Caribbean Development Bank (CDB or the Bank):

“Simply put, new uncertainties on top of already weak economic prospects make for a very challenging global growth backdrop.

“In oil-exporting countries, lower commodity prices and higher volatility are the main channels of transmission. Lower global growth means lower demand for these commodities, which adversely impacts the economies of commodity-exporting countries.

“This presents the Caribbean with an aggravated challenge—to reverse the trend of slower growth at a time when global growth is also declining. That is, the challenge is to reverse the trend of slower growth when the wind in the proverbial sail is weaker and has changed direction.”

These two statements set the context for the challenges that face Trinidad and Tobago. A world in crisis translates into the most difficult period that our economy has faced. A climate catastrophe that literally washes up our shores in the form of Sargasso weeds.

A cost-of-living crunch, coupled with lower export gas prices and significant income inequality, that strains both our government and households. Achieving growth is a challenging road ahead.

The global crisis has an impact. Dr Clarke quoted: “As a result, we (the IMF) significantly downgraded our most recent global growth projections in the April World Economic Outlook—by 0.5 percentage point for this year, from 3.3 to 2.8 percent; and 0.3 percentage point in 2026, from 3.3 to 3.0 percent.

“This represents the lowest global growth in approximately two decades, outside of 2020, the year of the pandemic.”

However, we should note the comments contained in the 2024 Article IV Consultation.

“[It] highlighted that the country was undergoing a gradual and sustained economic recovery. The non-energy sector was performing well. Economic growth is projected to gain momentum in 2024, supported by both the non-energy and energy sectors, and inflation is expected to remain low.

“The downside is an anticipated decline in energy prices and energy exports. International reserve coverage is expected to remain adequate at 7.5 months of prospective total imports.

“The report recommends sustaining the momentum for structural reform to secure a more diversified, green, resilient, and inclusive economy.

“It is crucial to foster private sector participation and promote economic diversification. Accelerating the country’s low-carbon transition agenda could help address issues raised by border carbon adjustments.

“Enhancing institutional capacity will improve the quality and timeliness of macroeconomic statistics.”

This summary meant we were on the road to recovery.

However, elections were held in April 2025. What are we seeing in the wake? Two stray dogs fighting over an unattended box lunch? Which one is thinking about the future of the country? How will we get growth?

Jamaica demonstrates that policy continuity fosters growth—its fiscal responsibility was enshrined in law under the Financial Administration and Audit Act. Why can we not have the same approach?

Our competitive two-party electoral system does not allow for this stability, nor change the underlying logic of rent distribution (the money that comes to the state for use in its budget).

Afra Raymond’s review of the three lawsuits (UTT, Petrotrin and eTeck) filed during the PP administration appears to be prescient. He opined:

“Those three lawsuits were politically motivated. This eTeck ruling now makes the role of board director of a state enterprise more risky, given that subsequent political administrations can audit or investigate upon taking office and then sue.

“The scope for acts of political revenge appears to have been expanded. If we are to maintain our tiny steps against the menace of corruption, it is important that a stern political will to do the right thing must be shown.”

Do we possess a leadership which can place national interests ahead of party interests?

The winner of our elections has traditionally leveraged these revenues not to invest in public goods or planned economic growth but to stabilise political loyalties through clientelist networks, discretionary spending, and informal institutional arrangements.

The state is less an agent of development and more a mechanism for rent allocation. This mechanism of allocation is what drives the headlines about Cepep and URP. (Express and Guardian newspapers, 14 July 2025).

Our political leaders wish that we would remain blind to the reality that Cepep and URP are essentially stains on our nation. These organisations are the payback for the masses who supported them.

The complaint made by the current Minister of Rural Development about the relative proportion of the wage bill to the total subvention (over 99%) is a confession about the structure of most of the government’s spending through the years, not an accusation.

(As a comparison, The Education Ministry spends 51% of its budget on salaries and wages while the National Security spends 73%).

What do we have to show for all the money spent on Cepep and URP? How do these organisations increase our productivity?

That discussion is not held because neither party wishes to address the issue of the otherwise unemployable masses.

We witness mass changes to personnel and board compositions. Paybacks for the winning party’s financiers and the discretionary allocation of contracts all reflect decisions where regulatory independence and ‘value for money’ considerations are structurally subordinated to political imperatives. These decisions imperil growth.

The nature of our elections causes our political parties to focus on short-term resource allocations to reward current supporters and finance future electoral cycles, thereby cementing political coalitions.

This context explains the promise of the 10% starting offer to the Public Service Association and the sop to them in the Wasa restructuring. Are we choosing to sacrifice national growth to finance future electoral victories?

We refuse to transform our educational systems, and our lack of a properly structured social net. The outcome is the rising crime rates and the school discipline problem.

We have a large Education budget, but last participated in the Program for International Student Assessment (PISA) in 2015. We are like the proverbial ostrich with its head in the sand.

We do not wish to acknowledge that our students from lower socio-economic groups fall three years behind where they should be. We ignore them, and their fate is to be either in Cepep or URP or to become fodder for the gangs: growth retreats when we do not invest in all, not just some, of our children.

This institutional capture also has profound macroeconomic consequences. Revenue shortfalls resulting from tax avoidance impact the cost of financing the national debt and the ability to raise capital. Weak tax administrations lead to significant revenue losses.

Is this a desirable way to repay party financiers?

Clarke underlined the point in this manner: “Broadening the tax base and removing distortions will not only increase revenues but also support investment and growth.”

The Fund had provided technical assistance to us through its Fiscal Affairs Department’s Tax Administration Diagnostic Assessment Tool (TADAT), as applied to the Board of Inland Revenue (BIR).

We have chosen to cavalierly throw away their advice about the proposed Revenue Authority and depend on a hope for an improved BIR. How, then, do we get the platform to support investment and growth? Do we believe that the BIR can be transformed into what is needed?

A year ago, the Chamber of Commerce raised the matter of transfer pricing, calling it “an important consideration for the future of tax policy in Trinidad and Tobago”.

Transfer pricing is “an accounting practice that represents the price that one division in a company charges another division for goods and services provided”.

By charging above or below the market price, companies can use transfer pricing to transfer profits and costs to other divisions internally, thereby reducing their tax burden.

 

Has that issue disappeared with the removal of the TTRA?

Our institutions are not immune to being enmeshed in elite bargaining processes that subordinate technocratic objectives to political exigencies. The most glaring and recent one is the removal of the Central Bank Governor.

There was an informative exchange of views between Professor Rose-Marie Belle Antoine and Dr Terrence Farrell in the Express newspapers. Both contributions are worth reading.

Antoine’s most significant point was: “This is the second time in a row that a governor has been fired. This does not inspire confidence either in the Central Bank or the economy.

“If these questions about roles, functions and duties are unclear in our statutes, then the time has come for there to be more clarity, for the public’s good.”

Confidence in the Central Bank is crucial to economic stability. The risk of the Central Bank being perceived as a political tool is disheartening, and growth will not materialise. The private sector has been silent, or maybe they are quietly moving their money out of the country.

In a world riven by crises and uncertainty, there is also a risk that the country’s credit ratings will be lowered. The crucial issue is the Central Bank’s credibility, which helps make our country a more reliable and attractive place to invest.

Dr Farrell, in his turn, corrected the errors in Prof Antoine’s arguments. He reiterated: “There is no pot of foreign exchange over which the central bank has complete control and from which forex is distributed to the public. The system we implemented in 1993 was intended to manage the exchange rate to balance supply and demand.

“We are in this distribution or allocation pickle because we have abandoned the managed float and now want to pressure the Central Bank and the commercial banks to implement exchange controls without any statutory basis or mechanism for doing so.”

More pointedly, he identified the slippery slope that this removal presages: “Independent institutions which hold our personal data and information like the Central Bank, the Central Statistical Office, the Integrity Commission, the Police, the DPP, and the Board of Inland Revenue exist precisely to insulate certain functions from partisan politics and maintain public confidence in our democracy as a whole.

“Today it may be the Central Bank; tomorrow it may be the Board of Inland Revenue. If a government is permitted willy-nilly to get personal data from these institutions, public confidence will collapse, and we will have begun a quick march toward autocracy.”

Autocracy has not been proven to be more growth-friendly than democracy. With our persistent budget deficits and growing debts, will our currency be stable? How will we get growth? How do we rise above global uncertainty and maintain our growth trajectory?

This question remains today. Will we be mired in lawsuits and revenge, or will our new administration reveal a plan to deliver growth? Can the country breathe again?

Or are we destined to watch the dogs fight, with all of us living in ruins?