In this response to the budget I propose to deviate from
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
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 institutions 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
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:
everything that can be counted, counts, and not everything
that counts can be counted.
Einsteins words, Mr Speaker, form the theme of my
budget presentation for this year.
At the heart of our societys 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
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 dont
believe the messenger, you wont 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
you dont know where you are going, any road will get
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
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 years 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 Governments 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
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
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
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,
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
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
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
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 individuals 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
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.
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.
(a) the challenge of a knowledge based economy,
(b) the challenge of global competition,
(c) the challenge of innovation and the convergence of new
(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 Markins 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
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
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
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
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:
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:
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 years budget speech. The UNC
has been constantly repeating that the nations 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 countrys
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
1. Investment in intangible assets.
2. Cognitive shifts as the catalysts for change.
3. Shifting the locus of change from the government to the
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:
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
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 Governments 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:
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, Trinidads
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 Trinidads
much enjoyed stability an outcome beyond their own control.
However, it is within Trinidads 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 countrys 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. Trinidads
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:
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 Trinidads comparatively
low ranking in the growth competitiveness indicators
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 Tobagos 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&Ts 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 sectors 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
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 countrys 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
governments bosom buddy relationships
with criminals has already started to cost this country
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 snails 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
Imperative number six is to create digital links between
Trinidad, its customers and its suppliers. The report notes,
With todays 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:
2. Firm level; and
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
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.
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
Mr Speaker, last year I spent some time articulating the
imperatives for T&T to participate meaningfully in international
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.
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
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 wont be for long. I am sure even you, Mr Speaker,
can feel it in your bones.
Mr Speaker, poverty continues to be one of the big problems
We can count the number of the poor, but the effects on
the psyche of the poor cannot be counted.
Poverty wont 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
I assure that it hasnt and your day of reckoning shall
surely come. If it is Caronis 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 Issawis 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.
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:
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:
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
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.
Mr Speaker, I now turn to the energy sector, the management
of which is critical to creating a sustainable economic
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
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.
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 Tobagos role as the
largest exporter of LNG to the United States is critical
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
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
countrys history. (Source: Republic Bank Newsletter,
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 Governments 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 Repsols private jet. Ken Julien please
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
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 Governments 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.
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
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
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 fundwhether
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
This looks a balanced position given the relatively high
debt of the country and the need to smooth volatile fuel
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 Parliaments 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
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
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
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.
Mr Speaker, Helen Keller said:
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
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
Mr Speaker, this Governments ignorance of what a budget
is and how budgeting fits into the process of strategic
planning is an embarrassment to all self-respecting citizens
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 PNMs lowest ebb and the tide is bound to turn
for this my beloved country.