Tuesday 19th October, 2004

 

 

Panday responds to budget

 
 
 
 
 
 
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Mr Speaker

In this response to the budget I propose to deviate from the norm.

In the present circumstances of oil price being at US$50 per barrel and gas prices at its highest, $100 more for pensioners and 5,000 more food hampers is not the issue.

What is important in a budget statement at this time of our development is how we shall use this oil and gas windfall to ensure that future generations continue to improve their standard of living and quality of life.

I shall argue that while things that can be measured quantitatively are important, they are not everything. Matters such as vision, leadership, democracy and the quality of life of our people on a sustained basis are equally, if not more important. We must, therefore, never lose sight of them.

When I heard all the robber talk contained in this budget presentation on Friday last, I wondered if the date for Carnival 2005 had been shifted to the 8th October 2004.

When you eliminate all the robber talk, repetition, irrelevance and double speak, this Budget was but a glorified shopping list enumerating of most of the problems facing the country, but with very little serious analysis of their deep, underlying causes and what has to be done to deal with them now and in the long run.

Despite the near three hours that it took to read it, this budget lacks depth and vision as much as it lacks strategy and an understanding of the society. There is no coherent link between vision and action, between strategy and objectives.

This so-called budget is the work of confused minds. It is the work of people who are unable to see the whole picture, who talk of the future but do not know how to come to terms with it.

What comes across as a simple budget, Mr Speaker, is really the work of the simple- minded.

At a time when we have everything it takes to launch T&T into a period of sustained growth with continuing improvement in the standard of living for all for a very long time, the kind of economic mismanagement we see enunciated in this budget will very likely lead us to negative growth in the future.

No wonder the cynics are winning. People are fed up, angry, disgusted and pessimistic about the future.

Alienation is higher than it has ever been and the brain drain is at a dangerous level.

Loyalty to institutions — and institution’s loyalty to people — is sinking like a stone.

National unity as a vision for our country is hardly ever referred to by this PNM Government far less the enunciation of a strategy to deal with this historical legacy of slavery and indenture. The result is that deteriorating ethnic relations and the growing feeling of alienation are moving along at a break-neck pace.

Mr Speaker, without a resolution to this historical problem of a divided society we shall never be able to mobilise our human resource; we shall not be able to achieve a single objective attempted in this budget.

We are becoming increasingly and painfully aware of the perilous weakening of our social structure.

Drugs, criminal gangs and gang warfare, functional illiteracy, poverty, crime, violence, breakdown of the family, youth alienation and HIV/Aids — these all continue in an upward spiral. Every aspect of our society is at risk. Individuals, neighbourhoods, communities, churches and families are not taking responsibility anymore and there is a reason for that.

Such is the feeling of despondency and helplessness that they are no longer willing to fight; they would rather switch — switch off, that is. The population is cynical, and cynics do not participate in changing things.

Mr Speaker, while this budget makes a lot of boasts, largely having to do with improvements in numbers, many of which we on this side have grave doubts, our quality of life deteriorates before our very eyes.

In this context I remind the Minister of Finance of the famous words of Albert Einstein:

“Not everything that can be counted, counts, and not everything that counts can be counted.”

Einstein’s words, Mr Speaker, form the theme of my budget presentation for this year.

LEADERSHIP CRISIS

At the heart of our society’s malaise is leadership or the lack thereof. It is one of the very important things that count but cannot be counted.

The PNM has not been able to mobilise a seemingly unwilling citizenry toward and unknown and even more uncertain future. And it is not the fault of citizens — why should they want to be led by this Government and this Prime Minister whose most distinguishing characteristic, despite has laser treatment, is his worsening myopia and astigmatic strabismus.

Mr Speaker, a leader must be able to spark the imagination of his people with a clear vision of a worthwhile end that stretches beyond what is known today. He must be able to translate that into clear objectives that people can follow.

Instead we have this puerile exercise called Vision 2020, which itself is a borrowed title that has so far has inspired fewer people than can be counted on the digits of a single hand.

Vision 2020 will probably go down as the hoax of the decade.

Can anyone listening to this debate truly say that they know what this silly phrase means in the context of our economic and social development?

If you do, then can you tell me, please, what this country will look like when we shall have achieved this vision; and will you tell me please, how we are going to get there? Show me the Promised Land and tell me of the strategies and tactics of reaching there.

Mr Speaker, there is an old saying: “If you don’t believe the messenger, you won’t believe the message.”

That is why the population is so cynical. The inherent capacity to choose, to develop a new vision for ourselves, to rescript our lives, to begin a new habit or let go of an old one, to rid yourself of anger, hate and bitterness, to forgive someone, to apologise, to make a promise and then keep it, in any area of life, is always has been, and always will be the moment of truth for every true leader.

This PM and Minister of Finance, however, is characterised by vindictiveness, dictatorial tendencies and delusions of grandeur. Soon he will declare himself the “father of the Caribbean.”

He is afraid of the strength of his opponents and even more so of his own associates. Ask the Minister of Housing about the vindictiveness of this PM if you really want to know. His leadership style is best described in the now famous anonymous statement:

“If you don’t know where you are going, any road will get you there.”

Mr Speaker, people expect their leaders to stand for something and to have the courage of their convictions.

They do not expect criminals to be rewarded with resources of the State like land and quarries and contracts in sensitive state enterprises.

They do not expect criminals to have unfettered access to corridors of power through senior ministers of government who act for the Prime Minister whenever he is abroad. When leadership tries to hoodwink the population, credibility simply sinks deeper.

For example, Mr Speaker, does the PM think he is fooling anyone when he gives a token to the flood victims of Central and South simply because he want to legitimise his gifts to the rest of the Caribbean?

Central and south Trinidad have been flooding for years, how come it is only now he finds the time to visit? He does not want people to say that he is playing “Santa” to the rest of the Caribbean while he ignores flooding in his own backyard so he has tossed a crumb to the people of Central and South.

Mr Speaker, as I listened to this long-winded predictable budget presentation rehashing last year’s presentation, I knew it was only going to be a matter of time before he blamed the UNC for something or other to cover up for his own Government’s incompetence.

I was not disappointed; I predict that it will not be long before the PNM blames the UNC for Hurricane Ivan. That is their style of politics. There is an old saying “ to err is human; to blame someone else is even more human.”

They are not focused on creating value for the population, intelligence and skills for the students, wellness for the patients and pride for the citizens. They are focused solely on staying in power.

That is why house padding is more important than creating living and sustainable communities where the residents have jobs and human development facilities; and that is why CEPEP and URP are more important than creating sustainable jobs. That is also why the PNM is more interested in the satisfaction of their supporters only, instead of the satisfaction of the nation.

Mr Speaker, leaders, in the words of the ancient Greek, Thucydides, have “knowledge of their duty, and a sense of honour in their action.”

Duty number one in this country is to unite this nation and so bring to an end the historically most persistent stumbling block to our development as a nation and as a people; duty number two is to rid our society of crime, and duty number three is to create a sustainable basis for the future prosperity of our citizens.

Instead under the watch of this PM, crime is at its worse, murders are growing in geometrical proportion and we are becoming the kidnapping capital of the world. The ethnic division is now a gaping chasm in our society and that too grows worse daily.

Meanwhile the PNM economic model is to consume in the present and borrow in the future while the social model is to buy votes with political handouts and keep the supporters in a dependence syndrome of servitude, both mental and physical regardless of the consequences to the nation.

Mr Speaker, it is said that an effective leader is not only someone who is loved and admired. He or she is someone whose followers do the right thing.

When therefore one Member of Parliament physically assaults a deputy mayor at a polling station on election day, and another loses his temper and hits another member, it is not only the fault of the violent member; it is also a reflection of the effectiveness of his leader.

Violence is the way of the PNM; it is now becoming a habit...part of the culture of the PNM. What do you expect from such MPs when their leadership shamelessly uses the violence of terrorist thugs to win an election?

Mr Speaker, popularity is not leadership. You measure the success of leadership by results. On that score this leadership cuts a very sorry picture. Their results are crime, drugs, murders, kidnappings and simple-minded economic strategies. The good people of this country cannot live in peace even in their own homes.

What does it matter that the economy is statistically growing, that the Revenue Stabilisation Fund has funds and that unemployment is declining if we cannot live in peace, if we cannot walk the streets safely and if we must hire private security to protect our families?

The tragedy is that none of this will change. It cannot change as long as this Government keeps criminals in its bosom. It also cannot change as long as this Government pretends that passing new laws is the solution to the problem.

It will only change when the leadership changes its attitude, or the people change the leadership.

Quite frankly, Mr Speaker, I am not optimistic that the leadership will change its approach.

Many years ago I spoke of “PNMism.” This PM is one of the creators of the phenomenon and like a horse wearing blinds...his only concern is to stay in power. He is leading this nation to fragmentation, poor work ethics and spendthrift behaviour.

I warn him, though, that he is riding the back of a tiger; as long as he can feed the tiger whose appetite expands with each meal, he is safe; but the day he runs out of feed he will become the food of the tiger; they will have him for breakfast.

Mr Speaker, (Warren Bennis) says that “leadership is like beauty...it is hard to define, but you know it when you see it.”

When we look on the other side we do not see it. But the nation deserves to at least see some kind of vision. For now, all we can see is the tide ebbing lower and lower as the days go by. And we ask when will it end?

DECLINE OF DEMOCRACY

Mr Speaker, the second important matter that counts but cannot be counted is the state of our democracy.

If this budget is intended to be implemented in a democracy then you can say from now it is doomed to failure. Our democracy is being eroded daily and as long as the trend of undermining our democracy continues, there is little hope for us.

This Prime Minister thinks that this country is his own private property. He has set some dangerous precedents in motion that threaten our very way of life.

Mr Speaker, the dictionary definition of democracy is “government by the people in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.”

The more internationally acclaimed definition is: “a government of the people, by the people and for the people.”

When Trinidad and Tobago became independent in 1962, the nation thought that we would be seeing the end of colonialism and the beginning of freedom in our land.

The irony, however, was that having been given “freedom” on one hand our present rulers held on to a culture based on hidden admiration for our colonisers. You can sense it in their thoughts and hear it in their speech and expressions and you can see it in their actions.

Franz Fanon referred to this phenomenon as “black skin, white masks.”

When you look at the Budget as a whole you are forced to ask: in what mode is it being cast? Is it still the colonial paradigm or is it within a democratic context?

When a country such as ours, rich in natural resources, talent, beauty and brains proclaims to be a lighted torch for democracy, are we speaking merely of the ability to run a government without colonial intervention? Or do we mean that we are intellectually and psychologically free from the shackles of the colonial past?

In attempting to answer this most important question we must not mistake freedom for democracy for these words are not synonymous.

We must always remind ourselves that democracy is the institutionalisation of freedom and it is in this context that we can refer to constitutional government, human rights and equality.

When we assess the overall situation existing in our country do we really feel a sense of freedom? Are we really a sovereign people? Are we exposed to governance based upon our consent?

On the surface we proclaim to be a democratic nation even in the light of the perpetual dictatorship initiatives made on the part of the PNM, a political party that, from its inception, undermined the power of the people.

How many of us can forget the chilling words of former prime minister, the late Dr Eric Williams at an Arima public meeting in 1971, drunk with power of the colonial ruler is reported to have said: “ I alone have the power to say come and go, and when I say come you cometh, and when I say go you goeth!”

Is this the result of the engraved authoritarian traditions of a Crown Colony mentality?

Mr Speaker, time and time again, we see instances, where the presence of democratic rule and legitimacy has slipped under the carpet. According to Dr Kirk Meighoo (Express Sunday, June 27th 2004), “After independence, we have believed that rule by the majority equals democracy. Majority rule, exercised badly, can be a form of institutionalised bullying”.

The Government is building a dangerous level of indignation amongst its party supporters and critics alike. Trust and respect have been eroding for a long time; however, the Government must remember that trust matters since it contributes to the continued development of social capital.

Puttman (1995) and Coleman (1990) purport the argument that “social capital refers to features of social organisation, such as core values and norms (including social trust) and networks that facilitate co-ordination and co-operation for mutual benefit.”

So when your Prime Minister of a “democratic republic” can ignore the lost trust and respect from the entire central and south region of T&T, leaving approximately 9,000 persons displaced and in need just so that he can have a “ruling hand” of the distribution of Caroni lands, what do you expect the citizens to think?

Did this decision rest truly in the hands of the citizens of Trinidad and Tobago? Citizens would recall that on February 6th 2002, Mr Manning in addressing his largely PNM audience at Woodford Square, told them that: “Caroni will suffer if UNC does not co-operate” and “Caroni Ltd workers will suffer if Parliament is not convened as soon as possible.”

When such threats are made in public it signals to the conscious population that something is wrong!

Democratic governance is not a matter of “divide and rule.” Is the Trindad and Tobago government concerned with the interests of the PNM political party or the interests the citizens of the nation? Majority rule must coincide with the guarantees of an individual’s human rights which then protect the rights of minorities be it ethnic, religious, political or even the losers of a debate on a piece of “controversial legislation.”

Mr Speaker, I warn the former employees of Caroni (1975) Limited, beware of the Trojan horse, wearing a sari, who comes into their homes and villages, mockingly calling senior citizens nana and nanny, so that she may further betray them; she is like the proverbial Putna, who with poisonous milk in her breasts offered them to the baby Lord Krishna to kill him while pretending to feed him.

I need not tell you what was the fate of the ill-fated Putna; Krishna had no mercy in exposing the evil-doer for what she was before taking her very life.

The problem for the rest of us is that while the top hierarchy of the PNM is safe in the company of their community leaders, we must constantly watch our backs.

Moreover, the cost of doing business is rising significantly as everyone must now employ security for simple things such as going home after work and sending children to school.

Mr Speaker, I wish to remind the good citizens of our nation of the words of William Jennings Bryan: “Destiny is not a matter of chance, it is a matter of choice; it is not a thing to be wished for, it is a thing to be achieved.”

I therefore ask, what is our destiny with the PNM at the helm of T&T? Are we going to chance our destiny to them?

They have already made us prisoners in our own homes. Should we now let them hand over our country to their “community leaders?”

Mr Speaker, once again the PM has announced a new set of crime fighting initiatives. But no one believes him because the nation asks itself: will they arrest their bosom buddies?

Mr Speaker, I wish to emphasise, no crime plan will work as long as the “community leaders” remain the friends and campaign managers of the PNM.

CONSTITUTIONAL REFORM

Mr Speaker, I now wish to turn to the subject of constitutional reform. Here again we will deal with something that cannot be counted but which certainly counts.

When I spoke in the 2004 budget debate, I pointed out that in going forward, T&T will have to face five major challenges. These were

(a) the challenge of a knowledge based economy,

(b) the challenge of global competition,

(c) the challenge of innovation and the convergence of new technologies,

(d) the challenge of bridging the digital divide, and

(e) the challenge of sustainable economic growth.

Mr Speaker, I do not intend to repeat what I said then. The PM has repeated them for me in his Budget presentation.

I merely want to point out that these challenges are still with us and the major characteristic of these challenges is their complexity. In this context, I am aware that the PM has said he agrees with constitutional reform but each time he speaks on the subject he trivialises it.

I must warn him of Markin’s Principle: “Complex cases have simple, easy-to-understand wrong answers.”

Mr Speaker, the UNC has been calling for constitutional reform for a long time and many people think it is all about political power. We do not deny that political power is one variable in the constitutional reform equation but let me assure you, Mr Speaker; it is not the only one. Indeed it may not even be the most important one.

The challenges of the 21st century are complex.

In addition to the ones that I identified earlier, we could also add terrorism, deterioration of our natural environment, the breakdown of family life and increasing social anomie. Human society cannot confront these complex issues on the basis of hierarchical authority systems. Hierarchical systems work on the basis of compliance. But complex problems can only be solved on the basis of commitment and trust.

In all these complex issues there are no quick fixes. There is no one villain to blame. There is no magic pill. Significant change will require imagination, dialogue, deep caring, and a willingness to change on the part of the entire population.

Mr Speaker, significant change cannot occur if it is driven from the top. Buy-in from the top is no substitute for commitment at every level of the society and in fact if executive authority is used unwisely, as we are witnessing here in T&T, it can make such commitment less rather than more likely.

When genuine commitment is needed, hierarchical authority becomes problematic.

People cannot be pressured into adopting new values and behaviors. Values have to be chosen voluntarily. In the words of the old Zen proverb: “Awakening leading to transformation versus process leading to change.”

What this nation needs is an awakening.

People do not just want new behaviors. They want it for the right reasons. They believe that openness, localness, merit and other guiding values will lead to a healthier and more productive T&T.

The other problem with the way this Government runs the country is the complete loss of trust that has resulted.

People do not believe that the Government is doing enough about crime. Needless to say people are not impressed with the results of the crime fighting efforts. People do not trust the police, even though I hasten to add, I still think that the large majority of the police force consists of decent hard working, dedicated officers. People do not trust institutions because this Government has shown that it has no qualms about misusing the institutions to punish political opponents and to reward their friends. But trust, is essential if people are to cooperate.

In this context Mr Speaker, permit me to quote from a research paper titled “How Political Institutions Create and Destroy Social Capital: An Institutional Theory of Generalised Trust,” written by Bo Rothstein and Dietlind Stolle.

On page three, the authors write: “More specifically, in the political sphere, generalised trust allows citizens to join their forces in social and political groups, and it enables them to come together in citizens’ initiatives more easily. In the social sphere, generalised trust facilitates life in diverse societies, fosters acts of tolerance, and acceptance of otherness. Life in diverse societies is easier, happier, and more confident in the presence of generalised trust.”

Mr Speaker, the authors also point out that: “Generalised trust has been shown to be associated with economic development and growth” and that “Generalised trust has also been shown to explain democratic stability and democracy.”

The authors also note Mr Speaker: “Governments can realise their capacity to generate trust only if citizens consider the state itself to be trustworthy. States for example, enable the establishment of contracts, in that they provide information and monitor legislation, and enforce rights and rules that sanction lawbreakers, protect minorities and actively support the integration and participation of citizens.”

But when trust breaks down, Mr Speaker, the criminal element develops because people stop believing that the State will create the conditions for them to prosper and grow.

Add to that hierarchical authority, such as is the

foundation of our constitution all we can evoke is compliance. Hierarchy does not foster commitment. The more strongly hierarchical authority is wielded, the more compliance results. Yet there is no substitute for commitment and awakening in bringing about deep and lasting change.

Mr Speaker, constitutional reform for the UNC is mainly an issue of leadership and trust. Instead of the leadership of a single person, who in our case is the PM: we have to structure our society in a manner that permits leadership to develop at every level of the nation.

This is the kind of leadership that will foster commitment and trust. People must share in the decision making otherwise they will neither participate nor cooperate.

It is only by constitutional reform that we will move from a hierarchical authority structure to genuine democracy. We are spiralling downwards at a frightening pace. We have to do something urgently.

I therefore once more call on the Government to put constitutional reform on the front burner. If we do not gain the commitment and the trust of the entire nation, there is no way we will be able to deal with the complex challenges of the 21st century.

THE ECONOMY

Mr Speaker, I now turn to the economy.

Once more, I must refer to what I said last year without repeating all of it.

I pointed out that the time had come for a new generation of economic strategies and that new, knowledge-based industries, had to be targeted for development.

I also pointed out that competitiveness rather than comparative advantage must become the basis for sustainable development and that at the firm level the strategy of creating internationally competitive clusters was imperative.

Mr Speaker, even if the Government did not listen to me, other people listened and agreed. Once an idea comes from the opposition, the Government rejects it in its entirety. However I notice that the proposals of the UNC have found favor with the IADB and we hope that now the Government will take notice.

On July l3 2004, the IADB presented a document titled “Trinidad and Tobago, Long Term Challenges and Opportunities, Building the Competitive Advantages of Trinidad and Tobago, Business Environment Assessment Report" (DRAFT). I will refer to this document extensively in this part of my presentation. The following quote comes from the Executive Summary on page 5 of the document:

“During the last half of the twentieth century Trinidad and Tobago had - and has - a strategy for buildings prosperity. This strategy met with failures, but over the course of time, the successes have far outweighed them. Trinidad's strategy resulted in strong growth, although certainly not relative to peak global performers in its income band. Whether Trinidad could have employed a better strategy can be debated. What has become clear, however, is that this strategy was designed for a time in which the country no longer lives. The world of natural-based advantages and cheap labor as a growth strategy for a small island nation is behind us. It is time for a new strategy”

Mr Speaker, it is almost as though the authors read my budget presentation of last year. The document continues:

“Yet while the Trinidadian business platform looks sound, Trinidadian firms are weak. Despite the comparative advantage of abundant oil and natural has, true competitive advantages are almost entirely absent. No healthy clusters have been developed outside the energy industry, and few local firms are able to provide sophisticated services for foreign energy companies.

Trinidad and Tobago is over-blessed with subsoil assets, location and sunshine, and has underinvested in the more complex forms of capital such as human skills and capabilities, institutional capital, such as laws that promote innovations and efficient government departments that sponsor the development of the private sector, and firms outside the energy sector that maximise value for their shareholders and compensate their workers accordingly.

Mr Speaker, I do not like saying that I told you so last year, but that is the fact and anyone who doubts it is welcome to a copy of my last year’s budget speech. The UNC has been constantly repeating that the nation’s business must be conducted along sound economic principles but the PNM is wedded to nepotism, patronage, make work schemes and jobs for the boys.

The document also said: “Here is the country’s real story. The model for change in Trinidad and Tobago rests on the following four premises:

1. Natural wealth and resource capabilities.

2. Structural incentives as the catalysts for change.

3. Government led actions and top-down change processes.

4. The belief that change can occur rapidly.”

In reality, the opposite model for change is true. Insights are driven by human capital. Cognitive shifts, knowledge and diffusion of innovative behaviour for the entire country; this is a slow process that takes time and patience. The challenge for the country is to understand and play the role in this change process by endorsing a new model based on:

1. Investment in intangible assets.

2. Cognitive shifts as the catalysts for change.

3. Shifting the locus of change from the government to the private sector.

4. Practice and discipline to stay focused on these three things over the long term.

While the challenges to Trinidad and Tobago are considerable, there are resources with the insight and capability to move the country forward. The next step is to provide a shared vision which is correct, informed, and explicit.”

Make no mistake about it Mr Speaker, the IADB is telling us that we have not got it right and that if we do not make the changes that I have been recommending and to which the UNC was committed while we were in power, this economy will be in serious trouble going forward.

The document goes on to state:

“Oil income, however, has not led to the development of world-class companies. While foreign investment has been little development of sophisticated upstream industries, such as geological modelling, information processing, deep-sea drilling or equipment manufacturing.

“There has been some development of downstream industries, but these have tended to low-end commodity goods, such as the use of PET plastic to create inexpensive patio furniture. According to one oil executive, although he would prefer to spend most of his US$500 million outsourcing budget with local firms, so few exist that the majority of this budget goes to Houston-based firms over 4,000 kilometres away.”

Mr Speaker, this Government’s reaction to criticism has always been to say that our circumstances are different and that strategies and tactics that have worked elsewhere cannot work in T&T. At other times they will blame the UNC. But Mr Speaker, it has now become urgent for us to change the way we do things and I strongly urge this Government to heed the advice that is being given.

The IADB document also pointed out:

“The downside of this natural resource driven growth is what it lacks: Long-term sustainable competitive advantage. That is, successful firms that innovate, upgrade and export complex products by staying abreast of consumers’ needs. This allows them to charge premium prices for their products which they invest in their workers’ skills and pay rising salaries, leading to a virtuous cycle of national prosperity. Like the energy industry itself, Trinidad’s manufacturers have used their advantages to generate income, but have not built the types of products and brands that would lead to wealth in the absence of comparative advantages.”

The document describes the national business model as follows: “Import raw materials, manufacture basic products far less expensively than your neighbours, and export inexpensive substitutes to their local consumptive items.”

The problem with this strategy Mr Speaker is that, put more bluntly, Trinidad and Tobago has been de-capitalising the country by converting natural resources to currency. And what turns out to be more troublesome is that fluctuating energy prices - and energy substitutes - make Trinidad’s much enjoyed stability an outcome beyond their own control. However, it is within Trinidad’s power to make the choice of continuing at the mercy of energy fluctuations or craft a future that creates high and rising standards of living for all Trinidadians (and I add Tobagonian) citizens.

Trinidadian (and Tobagonian) leaders must understand that that the nation is currently de-capitalising itself and in the process may become victimised by its spurious success, its overabundance of natural resources and its failure to learn how to make difficult economic trade-offs.

Private and government leaders must also acknowledge that this is the country’s last chance to invest the oil and gas rents in higher forms of capital and create the conditions for increased prosperity. The country can no longer be captive of a future determined by the likelihood of discovering new oil and gas reserves. Trinidad’s increased dependence on energy resources through recently discovered natural gas means that any price shock would be disastrous for the economy.

Mr Speaker, earlier I spoke of the leadership crisis in this country and now the IADB has also addressed the issue. It is clear that T&T has all the resources that we need to be a prosperous nation but without visionary leadership, we shall go nowhere. This government is focused on searching for skeletons to embarrass their political opponents. They concentrate their energies on house padding to win the next election. In the process they divide the nation and now the racial divide is a gaping chasm.

I advise that we continue to examine the IADB document. It says on page nine:

“Government institutions have become large, with loosely defined strategies and visions, leading to duplicative tasks, bureaucratic processes and inefficient use of government resources. For instance, as suggested by Trinidad’s comparatively low ranking in the growth competitiveness indicator’s public institution sub-index, the country needs to pay attention to important shortcomings in the area of public institutions. Specific examples include favouritism in decisions of government officials, irregular payments in exports, imports and public utilities and in the area of organised crime.....Finally and most important, Trinidad and Tobago’s historic provision of employment as a form of income redistribution, has created a culture that lacks an innovative spirit and a sense of true self determination.”

Mr Speaker, can anyone deny that the UNC has for as long as we can remember been preaching that public sector projects for job creation create a dependency syndrome that we will come to regret? When we were in power, sustainable job creation was our mantra. It was one of our highest priorities and education and training was the tool with which we sought to create jobs. In other words, the UNC was firmly entrenched in a strategy to create higher forms of capital. Sustainable development was our goal.

The IADB report concluded with ten imperatives which I urge this government to seriously consider. The first was that T&T must understand that this is the last chance for the country to invest in its future prosperity. The fact is that the recent relative success of our economy has more to do with good fortune than the design of inspiring policies or great business strategies to promote growth. The IADB document notes although T&T’s 2020 vision explains the need to diversify the economy, one is hard pressed to find tangible evidence of action. In other words Mr Speaker, vision 2020 is all talk and no action.

Imperative number two is that T&T needs to go micro. The report correctly observes that it is firms that compete and not nations. Therefore, the first step in creating a robust foundation for prosperity is to shift the locus of responsibility for the private sector’s growth to the private sector. This means:

1. Bureaucracy must be reduced to enable firms to interact more with customers and less with officials;

2. Customs must be overhauled; and

3. Public sector employment must be shifted to the private sector.

The report notes that government policies and government officials exhibit the familiar pattern of over-responsiblility for the success or failure of the economy and that this strategy is un-sustainable because oil and gas are wasting resources and energy industries are capital intensive. For future prosperity therefore, it is essential that T&T develop competitive clusters of non-energy based industries.

Imperative number three, to improve the competitiveness of key business sectors.

The report notes that T&T has several nascent clusters based on comparative advantages that it needs to convert and upgrade by building competitive advantages. The report notes however, that an important issue that has become a major impediment to the development of the private sector is crime which is increasing at an alarming rate. As the growth competitiveness index indicates, organised crime is one of the country’s most notable competitive disadvantages.

Trinidad ranks 45th out of 80 countries surveyed on this criterion. The factor can radically undermine stability and scare away investors.

Mr Speaker, I have already commented extensively on crime. At this point I merely wish to point out to the government that the international community is watching us and that government’s “bosom buddy” relationships with criminals has already started to cost this country big time.

Imperative number four is to improve the conditions for innovation and entrepreneurs. The report notes on page 34, that “the espoused urgency of the government is in stark contrast to the almost complete lack of urgency evidenced by their actions - legislation moves at a snail’s pace, bureaucracy is daunting and customs is inefficient even by low regional standards.”

Mr Speaker, this is a sad commentary on the way this government does its work. This nation cannot allow this to continue. Our futures and the future of our children are being jeopardised by this bunch of corrupt incompetents and it is time for us to take notice.

Imperative number five is to diversify into new products and services. It has been observed that today most successful nations create wealth by exporting products and services with insight: Insight into consumer needs, of technologies and processes, of distribution channels and their relative competitive positions.

Imperative number six is to create digital links between Trinidad, its customers and its suppliers. The report notes, “With today’s technologies, there should be no international distance between Trinidadian firms and their target markets. Trinidad has already invested in data collection by the CSO and are other public institutions, but the national data collection system has not been geared to serve the business sector, to provide market insight and incentive for collaboration inside industry groups. In fact, the National Business Survey identified lack of information as the number one problem encountered by small firms attempting to export.”

The report further notes, “Trinidad can radically transform its economy and use of technology to generate market insights by acting along the following three dimensions:

1. Platform;

2. Firm level; and

3. Cluster.

Unlike less developed environments, Trinidad does stand at the ideal development point to use new and emergent technologies to migrate from its current level of sophistication to a level much further advanced.”

Mr Speaker, the UNC has always articulated the view that T&T must leverage technology for competitive advantage. This is the context in which we started the Wallerfield Science and Technology Park. We understood that it was necessary to create an enabling environment before such a project could be a success. I am happy to see that this Government has copied the project but I see no attempts to create the enabling environment.

Where is the industry specific law? Where are the industry specific incentives? Where is the international marketing regime? Where is the study of human resource requirements and the plan to produce these resources? Where are the strategic alliances? What are the bureaucratic reforms that will be undertaken? I wish to warm the Government, Mr Speaker, that if the project is not handled properly, it could easily turn into a glorified industrial estate.

Imperative number seven is to streamline and strengthen private sector institutions. The report notes, “The Trinidad government has been a prolific creator of government ministries and business development institutions. The resulting dynamic has given little time for ministries and institutions to coordinate with each other and connect with their stakeholders in the private sector or to implement long-term policies. Institutional weakness are routinely addressed by creating entirely new organisations or by adding new functions to existing structures. As a result private and public institutions remain disconnected and sometimes operate in a remain disconnected and sometimes operate in a vacuum, and new public institutions concentrate their successes in areas where interaction with the business environment is least critical. For instance, there are currently more than 30 ministries in the country and a fair amount of Cabinet reshuffling is more the norm than the exception. Not surprisingly, only a few core functions are set as top priorities and addressed adequately; while many programmes are backlogged and lack continuity. As an illustration, take telecommunications policy, cultural policy and tertiary education; these have been articulated as key priorities of the government, however, they have been handed over from ministry to ministry, considerably cutting short the process and momentum of reform.

In contrast, the Ministry of Trade and Industry (MTI) aggregates functions related to business development, trade incentives, fair competition practices and international trade negotiations. It remains virtually impossible for the ministry to connect with stakeholder groups economy-wide in all the key policy areas it is designed to serve.

Further, the institutions placed under its mandate remain out of touch with the business environment and operationally do not reflect their strategic intent.

Moreover, this institutional gap extends to both the Business Development Corporation and the National Entrepreneurs Development Company. Apart from being deficient in technical capabilities and strategic intent, these organisations are perceived as either instruments of political patronage or social development programmes rather than private sector initiatives. In the words of one prominent businessman and academic, ‘These institutions are just mechanisms for redistribution or grant-giving agencies with no entrepreneurs behind them.’”

Mr Speaker, the performance of this government in managing the economy is enough to bring the average citizen to tears. Incompetence, confusion, contradiction, counter-productive bureaucracy and lack of vision are the order of the day. Where are we going Mr Speaker? Clearly the blind is leading... if this nation does not take stock in a hurry; we shall be led over the cliff.

Imperative number eight is to fast-track and implement key pro-market legislation. Competition policy must be fully implemented and laws for consumer protection and the deregulation of telecommunications are urgently required.

It is to be noted that Trinidad was the first country in the Caribbean to talk about liberalising its telecommunications sector more than a decade ago. However, to this date it has been the last to enact it. The process has been stalled by Cabinet changes and the continuous reshuffling of ministries, vested interests and an unsatisfactory commitment from authorities.

Imperative number nine is to understand that small countries that are prepared for globalization will benefit. The report notes, “There is much that the private sector associations and business support agencies can - and should - do to prepare for the coming competitive wave. Government agencies need to help understand and negotiate the voluminous agreements with which they are woefully unfamiliar. The level of resources being spent on the other side of the bargaining table, in both the FTAA and the WTO, puts Trinidad at an enormous preparation disadvantage. T&T has to understand that reaping the benefits of these upcoming trade agreements hinges on its ability to negotiate strategically. What this implies is the crafting of a trade strategy that incorporates and is aligned with the future economic strategy of the country.”

Mr Speaker, last year I spent some time articulating the imperatives for T&T to participate meaningfully in international negotiations.

You will note that nothing has changed and now the IADB is making the same points. This Government is a slow learner. This is the knowledge era and slow learners are a disadvantage, indeed a liability. It is urgent that we allocate the right people and resources to preparation for globalization, hence the need for a Constitution that ensures a meritocracy.

For us to participate in the mainstream of the new economy we must participate in the decision making bodies that lead trade negotiations and we must strengthen our capabilities in dispute resolution.

Imperative number ten is the final one and it says that we must see the energy sector as a market. The report notes, “In the words of upper management at BP, they would much rather outsource some services they use locally, than having to pay consultants and engineers from Houston. Why pay workers from the USA to drag drilling platforms across thousands of miles of ocean when they can be constructed in Trinidad? Literally billions of US$ are spent every year for these upstream activities. The customer - international energy industries - is right down the street.

For instance, BP spends almost half a billion dollars in geological work, design engineers, deep sea drilling fabricators to build platforms, and other services. It has been projected that almost 40 percent of those outsourcing services could be contracted out to Trinidadian firms. However, a whole range of skills and capabilities are missing since training and education has not kept up with labour market demand in this sector.”

Mr Speaker, you will now understand why the UNC placed such emphasis on education and training. We made sure every child had access to education because we had vision. Now that the IADB has made its comments, maybe the PNM will listen.

Mr Speaker, the conclusion of the report is worthy of note.

“T&T has a stable platform, rich potential, and energy resources. This can be a starting point for the creation of an extraordinarily productive economy or for the gradual de-capitalisation of the nation. What is needed is not a massive infusion of capital or government-led action. What is essential is that Trinidadian firms build the competitive advantages that will create wealth over a long time horizon. The nation has been lulled into a false sense of wealth and entitlement, by the existence of sub-soil assets that are the envy of its neighbours.

This blessing has both facilitated and disguised extreme weaknesses in local firms. The only way forward is the fostering of truly competitive companies, and the only large-scale way we know of to make this happen is to provide the technical tools required for the growth of competitive clusters of related and supporting firms.

Free trade will change the balance irrevocably, with or without energy. If T&T invests in its future now, it may be a rich nation when the energy is gone. If it does not, it will surely slip into poverty. With each year that passes, making this investment gets more expensive and less likely to bear fruit. Indeed, this is the last best chance for T&T to invest in its future prosperity.”

I have quoted extensively form the IADB Report because it confirms so much of what we have telling this Government. Maybe they will accept it now.

Mr Speaker, the future is not about CEPEP. It is not about house padding and dividing the nation on ethnic racial lines for political advantage. It is not about going to bed with criminals and calling them community leaders. It is not about expensive public relations campaigns to fool the people. Pettiness has no place in the transformation of T&T. This nation must leverage knowledge and new industries for competitive advantage. The world of the future is complex. The challenges are enormous and this Government is not up to the task.

The leadership is clueless and therefore the UNC must continue to point the way forward even while out of office... but that won’t be for long. I am sure even you, Mr Speaker, can feel it in your bones.

Poverty

Mr Speaker, poverty continues to be one of the big problems of T&T.

We can count the number of the poor, but the effects on the psyche of the poor cannot be counted.

Poverty won’t go away while the country is being managed as it is.

Mr Speaker, it is said that “if you do tomorrow the same as you did today, you cannot expect to get results tomorrow that are different from the results you got today.”

In fact, there is a Chinese proverb that defines insanity as doing the same thing over and over in the same way and expecting different results.

Mr Speaker, a recent study noted that the percentage of the population that was poor was 24 per cent. It also noted that female heads of households of African descent were more likely to be poor and that Africans had greater representation in the lowest quintile and a lower representation in the highest quintile than Indian.

The report said that the largest concentration of the population is in St George where there was the highest concentration of poor people. Another point that was noted was that there was a significant difference between Africans and Indians in respect of home ownership. The latter were more likely to own their homes than Africans.

Since political independence, this country has been ruled by the PNM for the vast majority of the time. What has this party done for its supporters in this time except keep then in a state of helpless dependency. It has kept them in a kind of servitude because this is how they stay in power... keep the people dependent and they will be forced to vote for you. That is inhumane and calculated cruelty, a legacy of the PNM since its inception.

In a study of several similar countries, it was noted T&T has a lower life expectancy than all the selected countries and a higher infant mortality rate than all except Mauritius. It also had the second lowest number of physicians per 100,000 of population, after Malaysia.

While the Minister of Health constantly picks fights with doctors in the health sector, the population suffers. It is our information that since this minister was installed, there has been a veritable exodus of doctors from T&T. That is why it was necessary to bring foreign doctors.

A recent television documentary pointed to overcrowding, rodent infestation, staff shortages, industrial action by pharmacists, inadequate maintenance and equipment breakdown at the San Fernando General Hospital. The most recent PAHO report paints an equally sorry picture. Our health services are classic third world.

But the Minister of Health in his usual manner takes no responsibility for the state of affairs. He simply blamed the SWRHA and the hospital management. It is as though he lives on another planet. With a pious look on his face, as if he was palming false Roebucks on you, he proclaimed that he was disappointed and that things should not be this way. No wonder he has been banished from the family business to politics. He simply does not understand responsibility. More recently, we have been told that a Government minister is benefiting directly from it.

Mr Speaker, having used raw power to decimate the sugar industry, the Minister of Health is now, with precision, destroying the health sector. And we all know why... the PSA told us why.

Mr Minister, last year I warned you that you had scorched the earth in Central Trinidad and that the earth will not forgive you.

I assure that it hasn’t and your day of reckoning shall surely come. If it is Caroni’s land you are looking for, I am told all you will get is six feet of it. This year I warn you of what is called Issawi’s law; “Society is like a mule, not a car. If pressed too hard, it will kick and throw off its rider.”

Mr Speaker, the situation is no different in housing. The housing needs of the poor are not being addressed. Of course we see a flurry of housing activity but this is not housing for the poor. This is housing to win votes. It is not creating communities; it is creating ghettos.

There is an IADB report titled “National Settlements Program: Second Stage. Strategic Evaluation Exercise” and I will read some of the comments of that report.

“What complicates the issue of efficient delivery is the lack of coordinating and integrating mechanisms in State management except at the highest level in Cabinet. At any one time with shifting Ministerial portfolio, changing administration and a growing quasi-state sector involving private partners, the coordination becomes more involved. With a lack of statutory development plans, clear policies and programs in the sector, ad hoc committees and task forces become the modus operandi for coordination and overcoming bureaucratic inertia.”

The report further states:

“It is clear that the board intentions of the business model of phase 1 of the Second Stage Settlements Program are not being met and that most of the mid-term benchmarks or triggers for a second phase need to be reviewed and revised.”

Another IADB report titled T&T “National Settlements Program, Second Stage” states as follows: “A review of the selling prices of houses constructed by the NHA reveals that they were initially offered for a sale at prices well in excess of $200,000 and even as high as $350,000. A quasi-Governmental institution is currently planning to build 900 square feet houses for prices in excess of $200,000. This is not affordable housing for lower middle-income families unless very substantial Government subsidies are made available.”

Mr Speaker, yet another IADB report titled “National Settlements Program, Second Stage, Mortgage Financing for Low Income Households” points out:

“There is considerable evidence that some of the subsidy delivery mechanisms have resulted in directing the major benefits of the subsidies away from the avowed target market targets of households in the lower income groups and towards households in the middle and higher income groups. The evidence of the results of the AMC program is that over 90 percent of the funds that were available were directed to households earning more than $4000 per month.”

Mr Speaker, there is the evidence.

The PNM will have us believe that their housing programs are targeted to the poor. But objective unbiased researchers tell us otherwise... the poor are not the beneficiaries. The beneficiaries are the PNM supporters who serve the house padding objectives of the Government.

I also wish to refer to a recent newspaper report on the issue of poverty.

The report was quoting from a speech of the former chairman of FCB Mr Ken Gordon, fall guy in the FCB/Unit Trust merger fiasco... now he is the recipient of the thanks a la PNM.

Quoting from a study on poverty, he pointed out the concept of “learnt helplessness among youth in certain parts of the country.”

He further quoted the study as saying,“That malaise is largely the result of make-work programs which were politically driven, but not carefully thought through and had the effect on institutionalising hand-outs, making them virtually a way of life for unemployed youth, many of whom become rudderless, dependent and unemployed. Tragically, many degenerated into crime.”

Mr Speaker, this is what programs like CEPEP and URP and all the other make-work programmes do to our people. In the long run they do not help anyone but instead result in low levels of labour productivity, long term dependency and impair the competitiveness of our nation.

The UNC strategy for poverty reduction was to educate and train the population so that people would have employable productive skills. This is the knowledge era, Mr Speaker. There is no other solution. Instead of building social capital, this Government is papering over the cracks, merely putting a plaster on the sore.

A recent UNDP report said that the youth of the nation are not benefiting from the wealth of the nation. They observed that the education system was not producing people who can get jobs and as a result the quality of our social fabric will deteriorate further.

When will they learn that throwing money at problems does not solve those problems? We have to deal with the process by which we managed. But this glorified shopping list contained in the Budget presentation has neither vision nor process. What therefore are we to expect? The poor will surely get poorer and all the adverse consequences of poverty will be with us as long as this Government is in power.

Energy Sector

Mr Speaker, I now turn to the energy sector, the management of which is critical to creating a sustainable economic future.

The impact of institutions has emerged as a major aspect in the debate of whether natural resources are a blessing or a curse.

An extensive World Bank study on natural resources in Latin America found that the key to success is to complement natural resources wealth with strong institutions, human capital and knowledge.

Research has also shown that in countries that are oil dependent, the emergence of democratic institutions is often hindered. (World Bank, World Development Report, 2003, p.148).

It is important that we fully comprehend these realities in our current context as an economy that is heavily dependent on the oil and gas industry.

In the light of this, it is important that we fashion sound policies for the energy sector to ensure that we make the best use of our energy resources, particularly natural gas. Not surprisingly, from the policy perspective, the Government has failed to come up with a single policy document to guide the energy sector.

What passes for policy in the energy sector is actually a patchwork of reports and decisions from committees or task forces, like the Natural Gas Export Task Force or the Vision 2020 Committee. It would seem that the only energy policy they have is to sell as much gas as possible in the shortest time possible.

Mr Speaker, where is the natural gas master plan? Where is the energy sector policy? In the 2003/2004 budget address, the Minister of Finance promised to reform the oil and gas taxation regime. The current regime is outdated and has over the last two years virtually crippled the operators onshore and in the Gulf of Paria.

The sad reality is that while the Minister of Finance mouths the virtues of local content in the energy sector, 99 percent of the lease operators who await this relief from government are national of Trinidad and Tobago.

On a critical note, in the last budget, the Minister of Finance promised to deliver a new oil and gas taxation regime by January 1st, 2004. It is now October 2004 and we are no closer to having that new regime in place.

As a result, this country is losing billions of dollars in revenue that it ought to be collecting from upstream oil and gas companies. As a consequence, no supplemental petroleum tax is received on natural gas produced. By the time he would have closed the fiscal door the multi-national horses would have bolted.

ALNG strike

In a few days from now, the American people will vote for a President. Regardless of who wins that election, one can be assured that the US government will pursue a policy to reduce its dependency on Middle Eastern oil.

In such a context, Trinidad and Tobago’s role as the largest exporter of LNG to the United States is critical and strategic.

In the first quarter of the year, the 10-week strike at ALNG threatened to cripple the energy sector. The genesis of that strike was a promise made by the Political Leader of the PNM to the people of Point Fortin prior to the last elections that he will introduce a sectoral minimum wage for the energy sector. This may well explain why the Minister of Finance dismissed the workers action as a “wildcat” strike.

In response, and might I add in typical PNM style, reminiscent of the 1970s, the army, police and coast guard were deployed to Point Fortin, supposedly to brutalise the workers. The true cost of the strike to the nation might never be known. It is estimated that the lost production time on Trains I, II and III and the shutdown of construction on Train IV cost the country some US$2.0 million per day. Not surprisingly, the energy sector contracted by 2.8 per cent in the first quarter of 2004.

The Minister of Finance now holds the dubious distinction of reneging on the most expensive political promise in the country’s history. (Source: Republic Bank Newsletter, June 2004)

Lack of transparency in the sector

There has been a lot talk in this Budget about transparency at the same time that the activities of the Government in the energy sector continue to be shrouded in mystery.

It is as though they believe that they can fool the population and conduct energy business as they did during the first oil boom. The Government’s modus operandi is to engage the country in billion dollar deals and then come to Parliament as an afterthought.

This Parliament only learns of billion dollar plans to construct smelter plants and re-gasification terminals from the newspaper.

Mr Speaker, I feel sorry for the Minister of Energy; he is a nice fellow obviously content to hold on to the trappings of office with power.

It would have been nice if he were allowed to do his job and not be undermined by cabalistic energy advisers who see him as a mere rubber stamp to be excluded for privileged trips aboard Repsol’s private jet. Ken Julien please note.

Alcoa aluminium smelter

Mr Speaker, the Government, earlier this year, announced plans to establish aluminium smelter in question will be owned by Alcoa with Government holding 40 per cent equity interest.

What the Minister of Finance has not yet told us is the pricing arrangement for the natural gas to be supplied to Alcoa. Is it that Alcoa is going to get this gas free of charge or at price lower than market value? If so who decides that? Lenny Saith, Prakash Saith or Ken Julien?

NGC business development portfolio

The Opposition has also taken note of the transfer of the business development portfolio from the National Gas Company under the chairmanship of Keith Awong to the National Energy Corporation, the CEO of which is one Prakash Saith, brother of Minister Lenny Saith.

Kick most of the Government’s actions in the energy sector, the rationale for this move remains a mystery; the answer may lie in the composition of the board and management of the National Energy Corporation.

Is it that NGC is being penalised for its success? Or is it that the Government believes that it can have more control and influence over the NEC?

The NEC, which is headed by the brother of the Minister of Public Administration and Information, will now be responsible for future energy projects such as the proposed aluminium smelter and the two hot briquette iron plants.

Mr Speaker, what this means is that the NGC is now just a wholesaler of natural gas.

Petrotrin

WHILE NGC is being penalised for its success, the Minister of Finance continues to reward the incompetence that passes for leadership at Petrotrin.

In its annual report for the financial year 2002/2003, the State oil company, which can no longer be referred as PetroSingh, is reported to have made a paltry profit of less than two million dollars.

What has happened to the recent investigation that was launched into the project awarded to the Cudjoe Construction Company?

That is another report that should be made public but remains a well-guarded secret because friends and families of the PNM were awarded contracts for which they did not qualify and the investigation severely criticised the contract process as well as the contractor.

In addition, the report was also severe in its criticism of the chairman of the company. How does the PM expect us to buy into his claim that the Government is interested in transparency when at every turn they cover up for their friends and family?

Revenue Stabilisation Fund (RSF)

Mr Speaker, the UNC is concerned that there are no rules governing the RSF, the objectives are unclear, there is no accountability to Parliament and the strategy for utilising the funds is still evolving.

The citizens of this country painfully recall that during the first oil boom of the late 70s and early 80s the then PNM Government set up several funds: The Road Fund, the Development Fund... At the end of the boom the funds could not be found; they were all gone because the Government was able to withdraw from the funds without coming to Parliament.

Mr Speaker, an IADB report on taxes in the energy sector states:

“The detailed design of the RSF is still the subject of internal Government discussion and, as such, there is no known official position on the major objective of the fund—whether it should be a mechanism for inter-generational smoothing or for placing fiscal planning on a predictable base.

According to Vision 2020, the GOTT wants to reduce public debt with the windfall revenues that are not earmarked to the RSF.

This looks a balanced position given the relatively high debt of the country and the need to smooth volatile fuel revenues.

The problem is that the windfall is calculated taking as a reference a price for crude oil projected in the budget, which may be set at a high level.

In fact, during 2002, with an average price of oil of US$24.2 per barrel, about ten per cent higher than the average of the last decade, no contributions were made to the RSF.”

Therein lies the problem, Mr Speaker.

This Government is addicted to conspicuous consumption. Unless there is accountability for funds in the RSF, this Government will spend it all out before you could say Patrick Manning. This nation must not allow this to happen.

The IMF has criticised the design of the RSF and their most important arguments are:

1. Deposits into the RSF occur when fuel revenues exceed budgeted revenues, which are based on a discretionary reference price. In this context, two-thirds of the windfall revenues should be earmarked to the RSF and the other third, in principles to reduce public debt. Withdrawals are also rigid. Withdrawals are authorised by the Ministry of Finance and they are not subject to Parliament’s approval.

2. The RSF does not guarantee a counter-cyclical policy.

3. There is no explicit prohibition to use the RSF balance as collateral in loan operations.

4. Reports are done on an annual basis with no inter-year reporting...they are not made publicly available and auditing is commanded to the auditor general and not to independent auditors.

Mr Speaker, this is a frightening situation. Effectively, the Government has taken charge of the RSF as though it is the private property of the PNM. This explains why the PM can run around the Caribbean playing Santa.

Members would have noticed the recent spectacle, stupendous in terms of its lack of accountability, when the Minister of Finance told this Hon House, that he did not know how much funds had been allocated to the RSF.

Mr Speaker, under the UNC, this number was reported to Cabinet at every weekly meeting. How can the minister give this Parliament such a ridiculous response? This is another example of how this beneficiaries Government continuously undermines our democracy by refusing to be accountable to the people.

The IADB report suggested that the design of the RSF may be improved as follows:

1. A reasonable medium-term target is to save all fuel revenues into the RSF and invest these funds abroad, and make a reverse transfer to finance a non-fuel deficit equivalent to the real return on the value of fuel wealth.

By doing so the Government would spread wealth to future generations and would avoid the impact of the volatility of fuel prices in the economy and in government revenue.

2. In the next decade or so, the GOTT may attempt to use part of the fuel wealth to accomplish two goals. One is to reduce gross public debt to about 30 per cent of GDP and two, to try to foster growth.

3. If the GOTT decides to allocate to the current generation a larger proportion of the fuel wealth by running a higher non-fuel deficit, the RSF will only have a counter-cyclical role.

In these circumstances it would be advisable to:

a. Ask an independent group of experts to study the behavior of the international price of crude and natural gas to determine the long-term price of both products and to update the study regularly.

b. Establish the RSF legal framework that two thirds of the extra revenues that are obtained compared to the target price should be deposited in the RSF with no exceptions.

c. Establish that the RSF may only be used when actual prices are below the target prices and the Parliament approves the appropriation from the fund.

d. Stop withdrawals from the RSF when fuel revenues return to their normal level.

4. A clear mandate of how the RSF can be invested should be established but taking into account that if the RSF is only used as a counter-cyclical fund its resources should be invested in shorter-term and safer assets.

5. If the RSF is only a counter-cyclical fund there has to be a limit on how much has to be deposited in it.

6. The administration of the RSF could be made public every quarter and members of civil society may be advisers to the board that administers the fund, enhancing the accountability of the process.

7. It has to be forbidden to use the RSF as collateral in any loan operation of the Government or the private sector.

Mr Speakers, I pointed out earlier this is our last chance to put in place the strategies that will ensure sustained prosperity of the country.

The management of the RSF is a critical component of these strategies. For now, it is being run as the private property of the PNM.

This must not be allowed to continue. I warn the Government that there is no right way to do the wrong thing. The RSF is the property of the people. It must be invested wisely and the citizens must be accounted to for its use.

Conclusion

Mr Speaker, Helen Keller said:

“Worse than being blind is to see and have no vision.”

If this is true, the PNM is worse than blind.

That is why in the beginning I described the Prime Minister and Minister of Finance as being myopic, astigmatic and strabismal.

This is a Government that refuses to learn. It persists in making the same mistakes. It is as though the PNM has no experience in government. But that is not entirely unexpected.

Aldous Huxley said: “Experience is not what happens to a man, it is what he does with what happens to him.”

When the PNM lost government in 1987, the country had recently emerged from the second oil boom and had gone into a period of precipitous decline.

When they lost again in 1995, it was mainly because crime had reached unprecedented heights.

Today, crime is again at unprecedented heights and the new oil boom is being managed in a way that is sure to lead us back to the crisis of the eighties. That is why I say that the PNM has no experience in government... they have learnt nothing from what happened to them.

And now, Mr Speaker the nation is presented with this glorified shopping list and told it is a budget. This confused wish list will only overheat the economy. It will not produce a sustainable platform for growth with development.

The make-believe unemployment figures, which I hope one of the ministers will justify, will only last in the short term. Soon we will not be able to maintain these so-called social programmes.

Mr Speaker, this Government’s ignorance of what a budget is and how budgeting fits into the process of strategic planning is an embarrassment to all self-respecting citizens of T&T.

This may be the way to run a village parlour but it certainly is not the way to run a nation.

In business the conventional wisdom is that if you fail to plan, then you plan to fail. I am afraid that the latter is what this nation now faces.

While all of this is not encouraging, Mr Speaker, I conclude by taking solace in the words of Henry Wadsworth Longfellow: “The lowest ebb is the turn of the tide”...this is the PNM’s lowest ebb and the tide is bound to turn for this my beloved country.

 

 

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