Caribbean & Central America - October 2013 (ISSN 1741-4458)

Prime Minister Kamla Persad-Bissessar and her People’s Partnership (PP) government are facing a second tough by-election only three months after ignominiously losing the Chaguanas West poll to disgraced former security minister, Jack Warner, standing for his new Independent Liberal Party (ILP). In the meantime, the International Monetary Fund (IMF) is projecting economic growth of just 1.5% for 2013, compared with the government’s projections of 2.5%.

Trinidad’s second by-election in three months will be only its fifth in 27 years, and there is a feeling that maybe the prime minister misjudged the political situation over the 4 November poll. The St Joseph by-election was brought about by the constituency MP Herbert Volney (who had been fired from his job as minister of justice) crossing the floor of the House to join Jack Warner’s ILP. Under new constitutional rules, the Speaker declared the seat vacant.

Where the prime minister may have misjudged matters is in Volney’s reaction. He had 14 days to appeal the Speaker’s decision, and it may have been expected that the former minister would launch a legal challenge, as indeed he had threatened, that would have dragged out until the next general election in 2015. Instead he refrained from appealing and so the government faces another tricky electoral contest.

So far this year the government has lost badly in the Tobago House of Assembly (THA) elections and in Chaguanas West. It now faces the 21 October local elections and then the St Joseph test.

Warner remains the biggest thorn in the government’s side. Despite the fact that his sacking from the government followed the most damning revelations of corruption during his time as a regional football administrator, he has brazenly attacked the PP government for corruption. On 17 September, for instance, he claimed to have been “misled” into supporting the PP coalition and that he had now heard allegations of corruption like never before in the country’s history. He said: “Corruption in this country has become institutionalized and I, Jack Warner, contributed to that” – by which he meant that he had been complicit in bringing a corrupt government to power, not that he had been corrupt himself!

The ILP is fielding a full slate of 136 candidates for the local election, and it will be a formidable challenger in St Joseph, a seat which has traditionally swung between the PNM and the main ruling coalition constituent, the United National Congress (UNC). The UNC first took the seat from PNM control in 1986, lost it in 1991, then held it from 1995 to 2007 before reclaiming it (with Volney as the candidate) in the 2010 general election.

In October, the IMF published its full Staff Report on the Article IV consultation that was completed at the end of March. This full report shows growth projections under “a passive scenario” rising to 2.4% in 2015 but then falling away again to just 1.7% in 2017 and 2018. Amongst other things, the report identifies “an urgent need to reengineer the composition of spending”. It says that subsidies and transfers are “on an unsustainable path, eating up a rapidly growing share of total spending”, from 45% in FY 2007/08 to 53% in FY 2012/13. The IMF accepts that some subsidies and transfers can be justified as “improving equity or fostering positive externalities” but others are poorly targeted and “may impose negative externalities”. In particular it criticizes fuel subsidies as disproportionately benefiting the rich.