PORT OF SPAIN, Trinidad – Finance Minister Colm Imbert said last Monday that the Trinidad and Tobago government was being urged to adopt a structural adjustment programme more than two decades after the oil-rich twin island republic ended a similar programme with the Washington-based International Monetary Fund (IMF).
“Indeed, 25 years after we got ourselves out of an IMF programme, we were advised to embrace the same old sterile measures from 1990, focused on contraction without due consideration of the short- and long-term adverse effects on our citizens,” Imbert told a Development Bank of Latin America (CAF) seminar.
Imbert, speaking on the theme, “Restructuring a Commodity Dependent Economy for Growth Without External Intervention” said that the adverse effects of the IMF’s structural adjustment programme created the necessity for a wide-ranging programme of economic and financial reform in Trinidad and Tobago.
The finance minister said that by 1991, the economy began to respond to the stabilisation measures and to show signs of a recovery.
“For the next 10 years, from 1991 to 2001, there was slow growth, followed by a tripling of our GDP (Gross Domestic Product) between 2001 and 2008 as both our energy and non-energy sectors took off, as commodity prices skyrocketed.”
But Imbert said that in 2015, when the present Keith Rowley came to power, oil prices were again dropping “like a stone, gas production was on the decline and gas prices were depressed, sending our economy into turmoil”.
Imbert said that over the years, several missions from the IMF had conducted their own in-depth review of the local economy whose reports were shared with major stakeholder groups.
The finance minister said that the country also benefitted from a visit by an IMF technical team that came here soon after 2015 and that many of the proposals from the various interest groups, organisations and experts had a common theme including implementing a property tax system; expanding the tax base; increasing tax collection as well as increasing personal income tax and corporate tax.
But he said that Trinidad and Tobago would not implement the measures as had been recommended by the IMF
“We had had enough of that. We chose a different path. We immediately embarked on reducing government expenditure to what we felt were manageable levels, from TT$63 billion, to TT$52 billion in the first year, and eventually down to $50 billion by 2018. It may sound facetious, but we were able to do this by cutting out waste, mismanagement and inflated costs, also known as corruption.”
Imbert said they also looked at the things that were bleeding the treasury, including the national oil company and the airline.
“We found our national oil company to be losing on average US$300 million a year and our national airline having lost a total of US$500 million over a five-year period,” he noted.
“We thus set about to address these chronic money losers, lest they crippled our economy,” Imbert told the conference, saying that going forward “our national development agenda will build on our achievements, as we continue to take the necessary measures to avoid a debt trap and external intervention”.