He raised the prospect of the Government having to borrow to fund its expenditure and thereby possibly incur strange looks from the International Monetary Fund (IMF). Manning said the Government had last year suffered a $6.9 billion revenue shortfall, while this year’s shortfall is about $7.8 billion.
Saying the country is now in a difficult period, he said any borrowing to fund these deficits would now take the country to a debt-to-GDP ratio of 56 percent.
Mr Manning has been clearly trying to put a brave face on this uncertain and uncomfortable situation.
Mr Manning tried to assure that Trinidad and Tobago is in a better position than countries such as St Vincent and the Grenadines, and St Kitts and Nevis, which he said respectively have a debt-to-GDP ratio of 67 percent and a massive 180 percent.
However, we have several concerns. Firstly, is this a fair comparison to make in comparing Trinidad and Tobago to our much smaller neighbours which each lack this country’s huge energy natural resources?
Secondly, while Mr Manning expects the country’s debt to one day be bailed out by the country’s energy revenues, even these have no guarantee, in a country that only too well knows the pain of boom-and-bust economic fluctuations.
While on one hand today’s oil-prices are relatively high in hovering at about US$70 per barrel, no one knows how sustainable this level is, especially as the US economy continues to struggle to climb out of recession.
Further, locally, Budget documents noted a clear lack in the exploration and development of new oil/gas wells.
He tried to be gallant in vowing not to balk in the face of IMF scrutiny, which he said the country had previously overcome during the global financial crisis.
We are not sure that such bravado by Mr Manning is the most appropriate reaction from a man who leads a Government which in recent years had been warned again and again about its expenditure.
Rather than displays of political machismo, coupled with what looks like sugar-coating of the facts, Mr Manning should really lay out the full details of TT’s economic reality, however harsh.
He must particularly assure that the Government is going to tighten up on its expenditure, so as to invest in productive capacity rather than on very costly projects such as the Tarouba Stadium and National Academy for the Performing Arts.
We note that Mr Manning’s talk of borrowing and IMF scrutiny comes just as the Government is about to impose on citizens the controversial Property Tax which begins next month. Just how bad is this country’s state of finances and public debt, and to what extent is this due to wanton spending by the Government? We would like to know.
At the Laventille meeting, in reply to a member of the public who had complained that the Government was spending too much, Mr Manning warned the man not to fall victim to “the propaganda.” All we can say, is that if Mr Manning is so concerned about “propaganda,” let him fully air the issue of the nation’s finances through a debate in a public forum such as Parliament, at the earliest opportunity.