Several economists have disagreed with Marla Dukharan that the country will be forced to return to an International Monetary Fund (IMF) programme next year although they admit it will be challenging
In an interview with Guardian Media, former Finance Minister, Karen Nunez-Tesheira said: “I think we are in for a very difficult time, I’m not quite sure, what she means that we will have to go to the IMF, that’s a very bold statement.”
Nunez-Tesheira continued: “Really thinking it out, I think she was being too much of an alarmist.”
The former Finance Minister shared that while she does not believe T&T was on the cusp of returning to the IMF programme, it can still happen as the implementation ability of the current government is very weak.
In the lead story of yesterday’s Business Guardian, Dukharan said: “We will have to go to the IMF by next year just like Barbados had to.”
Economist, Dr Vanus James also indicated that the IMF is not the only solution that the country has available. He said that the government has the option to explore all the multi-lateral lending agencies that are available and the IMF is only one.
He posited that the Inter-American Development Bank is an option as well as the World Bank.
James said even with the chance of T&T going to the IMF, it would not be as severe since the entire world is being pillaged by COVID-19. According to James: “It would be highly irrational of the IMF, even if we went to the IMF, to impose austerity programmes in a COVID environment.”
The economist said that the global community will face a major downturn and all the countries would have to come together to rethink the ways countries like T&T are helped.
James also indicated that multi-lateral agencies would also have to change their lending policies.
Weighing in on the topic was the former finance minster Selby Wilson who led the charge as the country entered into and left an IMF programme.
Wilson said: “It is not an automatic thing that they must go, it all depends on how the economy performs.”
He admitted that the government undoubtedly had to engage in significant expenditures in which it did not anticipate.
Furthermore, when asked about strategies that the government can employ to ensure that structural adjustment does not recur, Wilson said: ‘I don’t know that you can do anything, but they have to be very weary about how much they put out to support this effort” Wilson cautioned, however, that this does not mean that people do not need support.
Additionally, Dr Ronald Ramkissoon explained that the government can only avoid an IMF programme if it addresses the challenges the country has been having years before COVID-19. Ramkissoon remarked that these issues include not managing expenditures – even when oil and gas revenues were high.
Another highlighted problem revolves around foreign exchange, where the country was spending more than it was earning. Finally, the challenge of not being able to diversify the economy was not fully explored.
Ramkissoon said: “So we have had those kinds of challenges and therefore we have to move quickly in a much more difficult time, like now, to see to address some of those challenges.”
Nunez-Tesheira echoed the statements made by Ramkissoon, noting that it is now possible that the government would begin the implementation that the country has yet to see.
She noted that things like a functioning and effective revenue authority and full utilization of the T&T International Financial Centre (IFC) would be assets for the country.
Nunez-Tesheira added that the government has done a good job in managing the debt to GDP (Gross Domestic Product) level and stated the T&T still possesses what a lot of countries do not have, like a Heritage and Stabilisation Fund (HSF) estimated at US $6.1billion.