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As primary school children, we would have learnt a poem by John Keats.
“There was a naughty boy/ And a naughty boy was he,/ He ran away to Scotland/ The people for to see–/ Then he found/ That the ground/ Was as hard,/ That a yard/ Was as long…”
This poem represents the discovery about our finances by our Prime Minister, Mrs Kamla Persad-Bissesar. Her Government has inherited a $4.42 billion “hole”:
“This is a delicate situation because it means the country was being run month to month, literally living on the overdraft at the Central Bank, which we will now have to max out to meet only part of the deficit in May.”
The expected deficit for 2025 would be approximately $11 billion. She warned: “Given the high levels of deficit and debt, this is likely to affect the ratings from the credit rating agencies adversely.”
What was new about this reported status? What does it mean for the campaign promises?
Photo: OPM.
What has been done since the discovery? Has anything been done to boost either consumer or business confidence?
Confidence, in the national context, speaks to the expectations of the general public and the private sector. Government spending amounts to only 30% of our national GDP.
Unless the private sector and the man in the street feel assured about the future, they will hold back their spending. This situation will lead to postponed investment, innovation and expenditure. Since 2001, Jamaica has tracked these indices.
We do not know the status here. MFO-Republic Bank dropped its tracking of consumer confidence in 2006 after five years of gaining no support.
But we have an unexpected peek into how confidence can be damaged. According to recent newspaper reports, Karen Darbasie, the CEO of the First Citizens Group, had her advice about vacation leave to Minister Kennedy Swaratsingh miscontrued.
The Board held its position on the issue.
The Guardian story implicated the Government in feeding an ‘erroneous’ story and a fake WhatsApp message. There has been no rebuttal. However, the share price slid from $40.39 on 19 August to $37.90 as of 16 September. This slide has cost Corporation Sole approximately $400 million.
Private shareholders are running away from the stock even though there is no fundamental change in the business. Trust has been broken.
Photo: Daniel Prentice/ Wired868.
A key component of building confidence is empathy. How do we process the firing of thousands of workers when parents need to prepare for school? How do we address the offhand manner in which workers were sent home and then hastily promised stipends?
Neither the line minister nor the head of the URP programme knew how many persons were affected. The closest approximation was “hefty”.
It was left to Professor Karl Theodore and Ralph Henry, stalwarts in the field of social economics and labour economics, to spell out the impact on the economy. The whole affair smacks of the US Department of Government Efficiency – DOGE – with the claims of ‘WASTE, FRAUD, AND ABUSE’.
Then we had the National Gas Company Ltd Chairman spelling out the Company’s fortunes. (He correctly sounds the alarm over the unpaid T&TEC receivables.) He acknowledges the benefits of restructuring Atlantic Trains 2 and 3, which return value to our country. The final investment decision was taken on the Beachfield Manatee Upgrade Project in 2024, with expected revenues in 2027.
NGC is now a platinum sponsor for the SSCL.
Photo: NGC.
Yet, the Company ended its years-long sponsorship of three steelbands. Not a word to ease the pain. No compassion.
A contributor to Letters to the Editor, Anil Maraj of Couva, had this to say: “For many, these failures go beyond financial spreadsheets. They reflect a misalignment between NGC’s mandate, owned by the people of Trinidad and Tobago and its broader duty to national development.
“The ‘fall’ of NGC is no longer just about numbers; it’s about lost trust, shrinking industries, and a nation questioning whether its flagship state enterprise is still working in the people’s best interest.”
Unbelievably, Mrs Persad-Bissessar then dismissed a lone protestor at Woodford Square. This reminds one of the infamous Colm Imbert’s November 2016 comment (they eh riot yet) during the conference with visiting IMF officials.
Photo: Office of Parliament 2024
Over on X (formerly known as Twitter), Kalain Hosein, a respected weather commentator, complained about pro-government bots on his feed.
The Prime Minister will do well to remember Jack Warner’s mistaken assessment of the Section 34 protest march. Will she wait for a repeat, or is she open to the bots’ messaging alone?
Sadly, it seems that there is nobody in the ranks of the Government who remembers George Chambers and Selby Wilson. Upon the death of Dr Eric Williams, George Chambers took office and pronounced: “Fete over, back to work!”
Does anyone recall the precipitous decline in oil prices and an Opposition baying at his heels? In his case, foreign exchange reserves fell by 94% and there was no money in the Development Fund.
Faced with a high level of disaffection in the public service, caused by the offer of zero, zero, and zero in response to the salary increases demanded by public sector unions, he knew the reality of the situation and stood firm.
What he did was to tackle the problem from the monetary and fiscal angles. Does anyone recall the pressing into service of William Demas and his team of committed technocrats, who developed the report entitled The Imperatives of Adjustment in 1983?
As though that was not enough, in 1984, he appointed the Public Service Review Task Force, chaired by Reginald Dumas, with Gordon Draper as deputy.
He brought the same Dr Ralph Henry on board to tackle the productivity challenge. Euric Bobb joined that team to produce Accounting for the Petrodollar, so that both policymakers and the public could understand where the public funds were being spent.
(via Caribbean National Weekly)
He also addressed the chronic issue of foreign exchange shortage by granting incentives to exporters and creating the institution, the Export Development Bank. Finally, he used moral suasion with the local manufacturers, telling them to be “exportant”.
On the foreign affairs side and the Grenada invasion, an observer would note, that Prime Minister Chambers stated in Parliament on 26 October 1983 (one day after the invasion):
“To date, I have received no notification from any Caricom member country of any intention to request assistance from the government of the United States to intervene militarily in Grenada nor have I been informed by any Caricom member country that such a request had in fact been made.”
He had sufficient worries with the economy. It appears that our Government and Opposition have no desire for deep, proven technical expertise.
In fact, it seems that loose talk meets the moment. We knew we had to confront ‘hard ground’, but neither party has risen to the occasion.
What are we doing about these significant and persistent challenges identified by George Chambers?
Selby Wilson attempted to continue the course mapped out by George Chambers. With a divided nation unwilling to make sacrifices, he had to go to the IMF, which imposed stringent conditions.
In the end, we allowed ethnic considerations and criminality to enter. As Wilson wryly said: “I think we reap what we sow.”
(via CTU.)
The tradition of voting out parties (or worse), which presents unpalatable choices, remains today. So, when will we pay the piper? Will Mr Ramdeen speak in the right quarters about the gigantic and unsustainable T&TEC receivables? Who will bell the cat?
Dr Nigel Clarke, Jamaica’s former finance minister and now deputy managing director of the IMF, points to the Caribbean’s productivity growth, which has declined to almost zero. “This is at the root of the Caribbean’s growth challenge.”
It is instructive in this regard to consider Mr Wendell Mottley’s take on our situation. He succinctly charts our economic history and the lack of productivity.
Clarke spoke to our situation as an oil exporter: “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.”
Mr Ramdeen acknowledges this fact in the NGC Annual Report. What will Mr Tancoo do?
In 2020, Professor Karl Theodore pointed to the private sector (which has a larger share of GDP than the government) and asked: “What do they plan to do?”
He also raised the issue of reducing our dependence on imports. He specifically identified the need for an agricultural boost.
We have a hard road to trod. Who is going to tell our Prime Minister that no amount of blaming the PNM or the Central Bank will make the pain more palatable?
Copyright: Office of Parliament 2025.
Who is going to awaken the private sector to the reality that the foreign exchange situation is not a ‘cabal’ thing? When will we see that there is a different way to do things?
Next week, we will look at the Jamaica case, where in 2003, the dollar crashed literally overnight from $50 to $70. Where now the unemployment and inflation rates are among the lowest in the world.
Do we have the cojones to do what they did? Or do we still want to fete on an empty belly? Somewhere in the corner stands Selby Wilson as a silent witness.
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