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The status quo remains the same

Sunday, October 15, 2017

The theme of the budget—“Changing the Paradigm: Putting the economy on a sustainable path”—was a hollow promise.

A paradigm shift is defined as “an important change that happens when the usual way of thinking about or doing something is replaced by a new and different way”. Given there was absolutely no change in the usual way of thinking or doing things, the status quo will remain the same.

Where were the policies that would increase the capacity of our economy to produce goods and services, engender economic development and improve social conditions? Without such policies how do they intend to put the economy on a sustainable path?

People recognise that the Government finds itself in a financially difficult position because of the decline in the energy sector but equally because of the waste, mismanagement and poor planning of the previous administration. However, after two years in office and three budgets later, it is apparent that the PNM is unable to lead and it is unlikely that there will be any change in the paradigm.

Bereft of any ideas or credible fiscal policy, the Government is simply hoping for an increase in energy prices. How else to explain why there has been no genuine attempt to diversify the economy?

Given the financial constraints, the Government should separate the needs from the wants and prioritise accordingly. Instead, following the PP template, they have decided to begin construction of the first segment of the extension of the Churchill-Roosevelt Highway to Manzanilla.

The $400 million contract was awarded to Kallco Limited (Kallco) by Nidco, to be funded (according to reports) by Government’s Infrastructure Development Fund, which is funded principally by government revenues. So, as was the case with the failed $7 billion Point Fortin Highway under the PP government, infrastructural development will be paid for with money taken from the country’s income streams and not (as is the norm) from a loan on manageable terms.

In respect of allocating how income should be spent, should this project be given priority? It is absurd that the budget for the first segment of the highway extension is not that much less than the entire budget allocation for agriculture in 2017/2018 (just over $500 million).

The award of the contract to Kallco under the PNM raised many eyebrows, not least because they were painted by them in opposition as being a favoured contractor of the PP government and often criticised for its work.

The Sunday Guardian of February 1, 2015, contained a report about a 2012 multi-million-dollar contract awarded to Kallco to pave the Toco Main Road from Matelot to Shark River. In the report, the PNM chairman of the Sangre Grande Regional Corporation Terry Rondon expressed his anger at what he described as shoddy, sub-standard and incomplete work by Kallco.

In 2014, under the PP, Kallco was awarded the $85 million contract to carry out the Maracas Beach Redesign and Restoration Project, but the contract was terminated after the 2015 general election. Kallco’s performance under the contract was criticised by ministers Young and Cudjoe and the matter is now in arbitration.

So it was interesting to hear the Prime Minister at the sod turning ceremony stoutly defend the selection of Kallco for the contract. He was at pains to point out that Kallco had submitted the lowest bid and the process used by Nidco was robust. He went so far as to state his belief that Kallco had the necessary equipment and experience to complete the job on time and with no cost overruns.

Nidco also rushed to support the selection of Kallco. Even Chairman Rondon put in an appearance at the ceremony. The PNM’s sudden confidence in Kallco’s ability to get the job done in light of their own criticisms is a strange about turn, but does set the tone for what we are to expect over the next three years.

The difference between the US and say Germany—post election Chancellor Merkel has become aware of those marginalized by the free-market economy—and T&T is that those economies and societies are wide-based, resilient, and the disadvantaged groups can still survive. T&T and Venezuela are open and dependent with very few places to hide.

The pie must not only be divided as equitably as possible; but enough of it must be allocated to creating possibilities for growth and development.

Mickela Panday


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