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Mahabir to businessmen: Brace for more stagnation
In spite of Government’s move to partner with the private sector, investor confidence remains gloomy. In fact, economists are forecasting approximately three years of prolonged stagnation as the economy attempts to recover from the global economic crisis. While economists have applauded the joint initiative—Government-private sector partnership—they are warning that not enough is being done to stimulate the economy. Economists are blaming the lack of plans and proper policies for the economic drought. Urging Government to take decisive steps to restore investor confidence, senior economist Dr Dhanayshar Mahabir said the time has come for action. “The issue of the private sector participation has to be addressed by the Government. In addressing this issue Government has to be cognisant that the private sector is now undergoing a period of excess capacity.
“However, in the meantime, Government has to hope that the Caricom economies recover rapidly so the domestic private sector can grow at a rapid pace because the prospects for gas seems to be dim for the next three years. Basically, people in the business community would have to brace themselves for further stagnation in the economy,” Mahabir said. Suggesting that the Prime Minister should have considered consolidating some ministries instead, Mahabir said a Cabinet reshuffle was unable to assist the economy at this time. “Simply, what we need is an economic programme and plan to get the economy going. No amount of Cabinet reshuffle is going to help us.”
Sagewan-Alli: Ramp up spending on infrastructure development
Also commenting on the issue was economist/political analyst Indera Sagewan-Alli who stressed that issues of sustainability is in dire need of being addressed. Sagewan-Alli said more focus should be placed on the economy instead of increasing the size of the Government. Noting that low interest rates have failed to encourage private sector borrowing, Sagewan-Alli said this was as a result of people having no confidence in the economy.
“Firstly, Government spending on infrastructure development needs to be significantly ramped up. The Central Bank Governor indicated that in the first half of 2011, Government Public Sector Investment Programme was $207 million compared to $3.3 billion budgeted to support this. “The private sector is evidently looking to Government to lead the way and if they believe that the Government itself is uncertain and hesitant to spend, this will continue to dampen private sector confidence in the system.” In addition, Sagewan-Alli said Government had failed to disclose the way forward for T&T.
“The second missing ingredient is the absence of a new vision for T&T. The business community is still uncertain as to where this new administration is taking the country. In this regard there is need for a clearly articulated development plan that would have built on the ideas and concepts presented in this manifesto. “The torrid industrial relations climate is another impeding factor to business confidence. That the climate is rife with continuous threats of strikes and industrial unrest adds a fear factor of doing new business,” Sagewan-Alli stated.
Kumar: Need to diversify
Similar sentiments have been echoed by members of the business community over the state of the country’s economy and investor confidence. “The wheels are slowly spinning,” said Catherine Kumar, chief executive officer of the Trinidad and Tobago Chamber of Industry and Commerce. Kumar said: “The Chamber has been meeting with a number of government ministers and we feel the wheels are slowly beginning to turn around...to slowly spin.” While the People’s Partnership led