Mottley: No energy corruption in TT

The former minister said TT does not have those kinds of problems because it is a democracy and this fact has directed international attention towards TT to see how Government manages revenues from its second energy boom.

Recalling his experiences as finance minister and in several past PNM administrations, Mottley said funds were always available in a democracy but there was always “severe political pressure” regarding allocations. He explained that governments in the 1970s and 1980s knew what had to be done, but constantly lived “in fear of the population” if certain levels of spending were not maintained.

Mottley added that gasoline subsidises had increased from $450 million in 2000 to $1.6 billion in 2005. He claimed it was possible for this subsidy to inch up to $2 billion this year.

On the symbiotic connection between politics and economics, Mottley said the PNM did not lose office in 1995 because of a failure to manage the economy. He agreed with Prime Minister Patrick Manning that the PNM’s decision to float the exchange rate and open the economy in 1993 was one of its best decisions taken in government, but added that the success of these measures were due to the fact that other fiscal measures were in place and functioning in “lock step” with each other. Mottley added that Government had the key to its “electoral success” with the Revenue Stabilisation Fund and should consider increasing its allocations to the fund. “You can sell heritage (funds). Government can get political credit by selling it hard,” he said.

Republic Bank senior economist Dr Ronald Ramkissoon agreed with Mottley that allocations to the Revenue Stabilisation Fund should be increased and the current allocations were much smaller when compared to similar funds in other countries.

Minister in the Ministry of Finance Conrad Enill has indicated that the ministry has a team which is currently preparing legislation to formally establish the fund and that legislation should come before the Cabinet in June. He hinted that the legislation could be headed to Parliament shortly thereafter.

While noting there were inherent risks in any resource-based economy, such as poor work ethics and corruption, Ramkissoon said TT’s macro-economic indicators remain very sound and the country must look to “prolong its blessings” through increased savings.

TTMA president Paul Quesnel said while the national economic picture looks rosy for the immediate future, the country must ensure that it does not repeat the mistakes of the past. To this end, Quesnel reiterated the TTMA’s call to Government to place “a greater focus on the manufacturing sector.”