Dr Bhoe Tewarie: PM has finally spoken the truth about the economy

Monday, March 7, 2016 - 00:00

Former Minister of Planning and Development Dr Bhoendradatt Tewarie says that for the first time in six months, Prime Minister Dr Keith Rowley has spoken the truth about the economy, by pointing out that the country is not bankrupt.

Dr Tewarie posted on Facebook, his position on the state of the economy and he's calling on the Government to take action to arrest the slide in the exchange rate.

The following is Dr Tewarie's post this morning:

"For the first time in six months Prime Minister Keith Rowley spoke the truth about the state of finances in the TT economy. 

He made it clear that the Government was not bankrupt but that it had a cash flow problem. 

That is what we said from the beginning during the budget debate (you can check my response to Imbert's Budget presentation in Hansard) but government spokespersons including the Minister of Finance and Prime Minister Dr Keith Rowley spent the last six months talking about running up the Central Bank overdraft (which was done precisely because of cash flow problems but this was to be wiped out by flow of funds from the sale of shares from Phoenix Gas Processors, from a payment due from TGU and from taxes due from the energy industry at the end of fourth quarter 2015. 

This was not just to wipe out the Central Bank overdraft but to yield a surplus.

The Government knew this but just played the fool misleading our citizens once more, a pattern of behaviour of the PNM leadership which has become a bad and destructive habit.

In the same vein they kept saying how we overspent and mismanaged in the election year of 2015. 

When the 2015 accounts were brought to Parliament, there was no additional spending beyond the budgetary allocation and within the budgetary allocation there was only one movement of $200m in savings from the Ministry of Energy to the Ministry of Works to pay for work done on the Point Fortin highway. 

The problem in TT today is that the price of oil and gas has dropped dramatically and so has the production of oil and gas.

The drop in production is because no new drillings took place for the entire decade before 2010. 

Because of decisions taken by our Government after 2010 BP invested in Juniper and Juniper will add about 13 percent more production in the Energy sector by the end of 2017/early 2018. 

This a conservative estimate. The other issue is the need for other sources of revenue and that is where immediate interventions in the Energy sector, locally and regionally become important; that is where restructuring of an energy dependent economy through diversification becomes important; that is why new markets for a more diversified range of export goods and services become important; and that is why it is important to judiciously manage expenditure( our Government cut 4and 1/2 billion in Jan2015) as well as revenue , deficit spending and loans in the medium term and cah flow on a day to day basis.

The Government is also allowing the TT dollar to slide. This is wrong. They should take a clear, firm position on devaluation butressed by other coherent, non contradictory policy decisions, that are mutually reinforcing, to build back confidence in the economy which they have now fully eroded, so that investment, economic growth, production and productivity can be positively stimulated to jump start what after 6 moths of PNM is a stalled economy.

Coherent action and a holistic approach is what we need not irresponsible talk and outright lies."

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