Khan returns to Senate, says economy will be revived

Khan, who resumed duties after almost three months off the job due to illness, told the Senate yesterday during the debate on the bill to provide for Trinidad and Tobago’s membership to the Andean Development Corporation that he intends to meet with BP, Perenco, Petrotrin and BHP.

Declaring “all is not doom and gloom in the national economy,” Khan said with the energy sector and diversification, the economy will be revived.

Responding to Opposition Senator Wade Mark that Government was raiding the Heritage and Stabilisation Fund (HSF) and were “reckless borrowers”, he said, other leading oil producing countries in the Middle East “were dipping into their HSF for fiscal support because their economic situation is similar to ours.” He said, “ Our withdrawal as a percentage of GDP is, probably, still the lowest of these countries.” If hard times hits, and there is a reduction in salaries, or someone was out of job for six months, he said, people will go into their savings because they have expenditures to meet.

In withdrawing from the HSF, Khan said, “We wouldn’t waste it.

Obviously we would have to gingerly take out from it to keep the country afloat and please the citizens of Trinidad and Tobago.” On the revenue side, he said, Government is hoping to get rid of deficit budgeting by 2020 by increasing revenue to bridge the gap, decrease expenditure to manageable levels, and find ways through diversification and increased production in the energy sector to fund the deficit. “We have been doing all three simultaneously,” he said.

For example, he said, Government dropped the average $60 billion expenditure profile the People’s Partnership government had in place from 2010 to 2015 to $52 billion in the 2016 - 2017 budget.

Apart from energy revenue dropping from $19 billion in 2013 to $1.7 billion in 2016, and oil production dipping to 70,00 barrels a day from 277,000 in 1977, Khan said, the previous government’s fiscal incentives offered, such as allowing companies to write off 100 percent of their capital expenditure in year one had significant negative impact on revenue stream. “That was so ridiculous. Very few countries in the world would offer to write off the capital in one year,” he said.

In 2016, BP, which had been paying billions of dollars in tax revenue, no longer paid the same, he said, “Because of that fiscal arrangement of the UNC.” At present, the single most important issue facing this country, he said, is gas curtailment.

The oil and gas industry that includes petrochemicals, he said, was based on an abundance of gas but over the last five to seven years resources depleted faster than it was being replenished.

There was no production between 2010 to 2015 and it was due to that, he said that Prime Minister Dr Keith Rowley intervened.

Rowley, in six months from taking office, Khan said brokered a deal with Venezuela that former prime ministers Patrick Manning and Kamla Persad-Bissessar failed to achieve.

Last week, Rowley met with the leaders of Exxol Mobil, Shell and BP. “They don’t come bigger and more sophisticated than that,” he said noting that BP has committed US$5 billion in foreign direct investment in TT over the next five years, and Shell will be investing billions of dollars in the industry.

He has also held discussions with Exxon Mobil, which made major discoveries in Guyana.

Rowley is dealing with the Guyana issue at two levels, he said, that is at the Caricom level where he met with Guyana’s President, David Granger at last July’ Caricom Heads of Government meeting in Georgetown, and was now meeting with the Exxon Mobil, the owners of the licence to see the type synergies that could be developed with the energy sector there.