Farrell: Crisis at CSO

His own observations made him think that not all was well at the CSO, said the chairman of the Economic Development Board (EDB).

He gave the feature address at the 2016 Conference on the Economy (COTE) at the University of the West Indies, St Augustine, attended by luminaries such as past principal, Prof Compton Bourne, former Central Bank Governor Ewart Williams and health economist Prof Karl Thoeodore.

Farrell said data is needed in order to make policy, but lamented the implication of reports in yesterday’s media of the suspension of four CSO employees while the Director of Public Prosecutions (DPP) probes the case, as disclosed on Wednesday in the Lower House in the Budget debate by Planning Minister, Camille Robinson-Regis.

He said that for many years he had written about the CSO and now observed something being done about his concerns.

“One of the things I noted was that this unemployment rate that we have been publishing for years does not make sense,” Farrell asserted.

“It flies in the face of what we understand in terms of economic theory.

“How is it that you have an economy that is contracting yet unemployment is falling? How does that happen?”.

Farrell said that for too long no-one had tried to address those concerns, but now came news of the episode at the CSO.

“I thought the CSO had collapsed in terms of its processes, its systems and its capabilities, but this (incident) represents an absolute low, as low as you can go. “If there are people inside of there who can manipulate data, then that means that there is nothing that the CSO can put out that we can now believe.” He said if the scandal is true, this is a crisis.

Farrell called for research to be done into several areas, namely the impact of transfers and subisidies on household incomes, the extent of GATE’s social impact, wage gaps between private and public sector, the fairness of public-housing allocation, and whether high social status is a bar to the use of public transport? He said a lot of work is needed to move TT forward, and this is the job of the EDB that he hopes to engage UWI’s Department of Economics.

Earlier Farrell said that some transfers and subsidies are hard to cut, especially “the elephant in the room” that is the pensions of Government employees that are “unfunded” by any pension plan but are instead paid from the Government’s current revenues.

“It is a huge number, yet we are not dealing with it,” he said, unlike Jamaica which he said has just bit the bullet on this matter.

He said transfers include monies to the Infrastructure Development Fund (IDF), consumption subsidies, production subsidies, payments to international bodies and even to the Council for Legal Education.

He lamented the existence of certain “hidden subsidies” such as persons paying small sums to lease State lands for their own gain. “That’s happening now,” he bemoaned of the latter, “Well below the market value”.

Farrell urged the total removal of the fuel subsidy, saying that measure would change the current outrage of 90 percent of vehicles on the road containing just one person, as he likely alluded to car-pooling as a solution.

Otherwise Farrell both questioned people’s work ethic, and suggested the size of the country’s informal sector has been underestimated. He also said income inequality and wealth inequality in this country is worse than had been initially thought.