“It is a simple matter for ivory tower economists to prescribe bitter economic medicine which would undoubtedly inflict deep suffering on an ailing population because most will never have to look the patient in the eye or swallow their own jagged little pill.” This was the statement made by Minister in the Ministry of Finance Brian Manning on Saturday in response to recent comments by local economists calling for the government to take decisive action to correct the country’s economic problems.
Manning said some of the recommendations now being floated are “archaic, outdated, lacking context and should be dismissed” because they are dangerous and damaging to the well-being of the people of T&T.
In Thursday’s Business Guardian magazine one of the recommendations made by economist Dr Terrence Farrell was a reduction in the headcount in the public service.
Manning said this move could force hundreds, or even thousands, of people “into an already crowded labour market with little hope of being absorbed by a wobbled private sector.”
Manning said what Farrell and the others are recommending was reminiscent of action taken by the National Alliance for Reconstruction (NAR) government in 1986 which failed then and today is considered “outdated, uncaring and almost cruel economic policy.”
Instead, Manning said the current Government has embarked on a strategy of investment designed to restructure the T&T economy while preserving lives and livelihoods.
“This is what people-centred policy is all about. We make no apologies for that,” Manning said.
“While these textbook recommendations would improve our economic indicators they would also so severely impugn the standard of living for the average Trinbagonian that no one would care.”
Manning said even the International Monetary Fund (IMF), known for promoting austerity measures, has made an about-face on this draconian economic strategy.
“A recent article (October 2020) published in the Financial Times titled, ‘IMF says Austerity is not Inevitable to Ease Pandemic Impact on Public Finance’ has said as much. Mr Vitor Gaspar, head of fiscal policy at the IMF, stated resoundingly “most advanced economies that can borrow freely will not need to plan for austerity to restore the health of their public finances after the coronavirus pandemic’,” Manning said.
Manning said T&T remains an investment-grade country with a relatively high credit rating and this allows us continued access to “cheap debt” on both the local and international markets.
“While I respect Dr Farrell’s experience, I must reject these outdated economic recommendations; these policies of pain. There is no question that our economy is in a delicate state, it requires a fundamental restructuring and superfluous spending must be cut,” Manning said.
“However, instead of starving this economic flu, as Dr Farrell has suggested, our government has decided to feed the patient by investing in our people and stimulating our economy,” he said.
Manning said the Government was investing in infrastructure, housing, digitisation, skills and education and improving the country’s ease of doing business to attract further foreign direct investment to create jobs and improve life for all.
“The patient doesn’t have to die for the surgery to be a success,” he said.