Only time will tell if the Government’s splitting the Heritage and Stabilisation Fund (HSF) into two funds will succeed, said Ravi Suryadevara, President of the American Chamber of Industry and Commerce (AmCham T&T).
On Tuesday night, in an address to the nation on the economy, Prime Minister Keith Rowley announced that the Government will be dividing the US$5.5 billion HSF into two “distinct parts.”
“We need to see the mechanics of how this will be achieved. The HSF is enacted through Act 6 of 2007 of Parliament. The Government will have to create two separate Acts for two separate funds. One fund should be for the Heritage effect which will be for generational use and other one will be for stabilisation effects in the interim period when the economy suffers price shocks as we are suffering right now.
In segregating the Fund and putting a bulk of the money into the Heritage Fund they are trying to ensure that the Heritage aspect is insulated from stabilisations,” Suryadevara told the Guardian yesterday by phone.
In his address, Rowley announced initiatives to combat the growing economic crisis and urged the nation to make sacrifices to survive.
The Prime Minster said: “We intend to leave the bulk of the existing fund in the Heritage component and allocate the remainder to the Stabilisation Fund. We intend to use approximately US$1.0 billion for stabilisation purposes in FY 2016 and perhaps another US$0.5 billion in FY in 2017.”
Suryadevara also praised the Government for recognising that the problems in accessing foreign exchange will not be solved overnight. “What Rowley said on Tuesday night was not news to members of the business community who have been discussing these issues for a while.”
He added that the initiatives announced by the Prime Minister are not the “final panacea” but it sets the tone for 2016 and will begin to deal with the some of the vexing problems that exist.
Abrahim Ali, Public Relations Officer for the San Juan Business Association told the Guardian yesterday that the group is happy that the Government has finally “levelled” with the population and has spoken the truth about where the country’s economy lies. He praised the Government for its intent to cut costs in Government ministries by seven per cent.
He said if the Government really wants to save on the use of foreign exchange it should diversify the agriculture sector by bring in Chinese and Indians with agricultural experience to run some of the model farms, which will cut the food import bill.
David Edwards, President of the Tunapuna Business Chamber said the Government has to be careful about its plans to cut expenditure in State companies and government ministries. He said if those savings are used to generate economic activity in other areas then the decision would have been a good one.
However, he said the State plays an important part in the T&T economy and the Government has to be careful it does not take way from the State’s contribution to the economy while the economy is contracting.