With the recent passing of the budget by the Government for fiscal 2016, citizens must begin to seriously consider the key issues facing the nation as we will eventually approach a situation of critical mass. Budgets have become long-winded political statements where solid and sustainable long-term action has been limited. They have become synonymous with extensive blocs of capital and recurrent expenditure as well as ever increasing social and welfare spending commitments. Within the context of these fiscal packages, there has always been a continuous attempt to superimpose one form of socialist egalitarianism or another to somehow improve a society perceived as socially and economically unequal.
Whilst the Prime Minister must be commended on his decision to appoint an Economic Advisory Board with a comprehensive mandate to examine the plethora of socio-economic issues facing the nation, whatever their collective recommendations and impact, T&T needs to properly assess and holistically deal with its realities, some of which are undermentioned.
For one, we live in a society in which almost everything is subsidised—housing, fuel, energy, general utilities, healthcare, transportation, education and the list goes on. You name it, we subsidise it (perhaps an excellent national slogan!). We spend billions of dollars on subsidies whilst many are either immediately not necessary or can be gradually phased out. We have developed a culture of expectancy which is impacting on our very competitiveness as a people and as a nation.
Secondly, misdirected capital and social spending and subsidisation have cumulatively allowed for the spawning of unsustainable deficits, which continue unabated even in times of buoyant energy prices and a growing economy. In fact, they have become much more acute over the last few years as we fritter away the inheritance of the future generations for our own present comfort. In examining the outcomes from these accumulated deficits over the years, has there been a positive and total transformation in the delivery public goods and services? This, even with expanded public sector bureaucracy which has been growing unstoppably since 2003.
Moreover, the lifeblood of the local economy ie foreign exchange continues to face its own challenges. Whilst we may have a solid import cover, the mid-1980s demonstrated how quickly such a situation could change for the worst, in particular, with the rapid enlargement of international credit and concomitant settlements and transfers in foreign currencies. This of course, invariably has led to more imports and yes, the all-important rise of the credit card. Are we managing our reserves and external assets in tandem with economic changes? No citizen should want a repeat of the 1980s with its onerous import budgeting and a total lack of foreign exchange availability due to exhausted reserves.
The foreign exchange challenge then leads to the next reality—the now clichéd term of economic diversification. I personally doubt most people understand what this means as it is critically linked to creating an alternative key source of foreign exchange earnings more than it being about direct governmental revenues. Currently, the energy sector is responsible for roughly 86 per cent of all foreign exchange earned and in the 1980s, this stood at 94 per cent on average. Even with alternative sectors, how much have we really diversified? Yes, the other sectors have grown, but this growth has been mainly internalized and they are net users and not gainers of foreign exchange. Essentially, few new economic spaces have been created to address this reality.
Then comes the elephant in the room, which is low workforce productivity. As a nation, we lay back and continue to expect more for giving less—is that the legacy we truly want to leave for future generations? Not even to mention the other social ills which have become almost culturally acceptable such as high violent crime, poor personal and social behaviours, and large segments of the population remain generally uninformed and it goes on perpetually.
How we resolve these issues will determine our survivability as a nation. With time running out, this is not the time to stick our collective heads in the sand but to holistically tackle these realities to ensure an extremely bright future for ourselves and the generations to come. In such times, history gives us enough examples as a people of what not to do and how to change it.
Luke Gittens
Freeport