No Govt squandermania in TT

In September, the Opposition UNC claimed that a draft 2005 IMF Article IV report released at that time proved that Government was engaged in a wild spending spree, and that funds were being misappropriated. Minister in the Ministry of Finance Conrad Enill said the document in question was a draft and contained no concrete evidence that there was financial mismanagement by the Government.

Announcing the conclusion of its Article IV discussions with TT (meaning that the 2005 Article IV Report has been completed) on November 12, the IMF stated that it has found no evidence of financial mismanagement by the Government. While the IMF had some reservations about developments in the national economy, the organisation gave the economy a clean bill of health. The IMF stated, "The current circumstances where high energy prices were driving macroeconomic developments provided a unique opportunity for TT to make significant progress towards securing sustainable high living standards for its population." The IMF said TT’s economic growth was robust, unemployment was at "historic lows (8.3 percent as of 2004)" and there were large surpluses in both Government finances and the balance of payments.

The IMF said maximising economic gains from the current energy windfall required a prudent mix of fiscal, monetary and structural policies and expressed its approval that Government has decided to establish "a permanent energy fund." Mindful of the fact that the nation’s energy reserves were limited, the IMF advised Government to consider increasing the share of energy revenues saved, stating that greater savings would help shield the economy from the adverse consequences of a pro-cyclical fiscal stance, in terms of high inflation, loss of competitiveness and a "boom-bust" pattern of economic growth.