Caribbean & Central America - November 2015 (ISSN 1741-4458)

On 5 October, less than a month after Keith Rowley’s People’s National Movement (PNM) secured victory in the 7 September general election, new finance minister Colm Imbert declared that “our economy is in an even more perilous state than we, the new administration, had envisaged”.

In his 5 October budget statement, Imbert acknowledged that Trinidad & Tobago’s energy sector would experience its “fourth annual decline in the past five years” in 2015. He said that energy exports would likely come in at US$7.5bn in 2015, down from an annual average of US$12.7bn in the 2010-14 period. As a result, the trade balance would be reduced from US$4.6bn in 2014 to US$1.7bn. He added that activity in the non-energy sector would also continue to be weak, particularly in construction, distribution, and manufacturing.

Where Imbert got political was in his assertion that the outgoing People’s Party (PP) administration, led by former prime minister Kamla Persad-Bissessar, “took virtually no action to stabilize public finances” in the face of declining revenues. For instance, Imbert reported, while government revenues from petroleum had fallen by TT$8.0bn in 2015, government expenditure was reduced by only TT$3.0bn. The result was a fiscal deficit of TT$7.0, about 4.2% of GDP, compared with a budgeted deficit of TT$4.3bn, 2.7% of GDP.

Imbert said that the new government would orchestrate an improvement in fiscal year 2016, reducing the budget deficit from 4.2% of GDP to a projected 1.8% of GDP. In part this will come by boosting VAT revenues by an estimated TT$4.0bn, but it will also rely on one-off items which could amount to as much as 11.4% of GDP. This suggests any improvement in the fiscal deficit could be temporary in the absence of an economic turnaround.

For the moment, though, the focus of the United National Congress (UNC), the main component in the ousted PP coalition government, is on its own internal affairs and not on the PNM government’s economic plans. It is to hold a leadership election on 5 December, and challengers are lining up to replace Persad-Bissessar.

The main indictment of the ousted prime minister is that she has become a liability. She led the PP to victory in the 2010 general election when Prime Minister Patrick Manning took the disastrous decision to call an election two years before he needed to, but her record with the electorate since then has been poor. In 2013, the UNC lost four electoral contests. Following those setbacks, she suffered the resignation of two ministers in March and April 2014 for misconduct, and in early 2015 a complicated political scandal cost the jobs of Attorney General Anand Ramlogan and National Security Minister Gary Griffith. Then there was the tumult surrounding former security minister Jack Warner’s indictment on allegations of corruption, and the US’s attempts to extradite him. For the moment Warner is still in Trinidad, and he is still throwing mud at the former prime minister.

Persad-Bissessar’s main challenger at the 5 December UNC convention will be former minister Dr Roodal Moonilal who has relinquished his post as opposition chief whip in order to mount his challenge. He is challenging the former prime minister on the grounds that five consecutive election and by-election defeats under her leadership says all that needs saying. Moonilal argues: “We can’t take this anymore. I’m just fed up with losing…If the same people use the same approach and behave in the same way, nothing will change. We will lose again and again – in 2020, 2025, and beyond.”