FINANCE Minister Colm Imbert has inadvertently admitted his abysmal failure to steer this economy from the crisis that was obviously coming when he assumed office in 2015.
He revealed the Government now has serious difficulty “finding money to keep the country running”. Utterly alarming! The country earned almost $2 billion less than expected in the first four months of the new financial year as we head for a massive deficit for fiscal 2021. We are in very deep trouble.
Imbert is of course blaming the pandemic. But we were in problems long before Covid-19. In 2016, energy earnings, our main revenue, had dropped from $19 billion to under $2 billion. The situation demanded courage, creativity and commitment. Had Imbert measured up, we would have been in a better position to weather the pandemic.
But for his entire term, this minister’s main proficiency was politicking. At Christmas 2015, attempting Santa’s good cheer, he told this endangered country, “we are not in any situation where there is any great cause for concern,” citing our 12 months import cover from US410 billion in reserves. Utterly irresponsible. I had to immediately remind the nation our revenue is threatened by “a global energy revolution from the US shale industry and advances in renewable energy.”
But for five years, intellectually fossilised by fossil fuels, Imbert provided nothing directional on new foreign earnings while billions in reserves and import cover evaporated. And accompanying the minister’s emptiness were his trademark arrogance, sneering and cynicism. I found it “most offensive” when people were looking for direction and got “mainly declamation and derision”.
The world was leaving us behind. But book-keeper Imbert provided no plan for economic restructuring, greater productivity, smaller government and private sector stimulation. I warned him, “The arithmetic of reducing transfers and subsidies alone will not save us; it is the algebra, as Lloyd Best said, that will unleash the creative powers of our people to ensure we take up our beds and walk.” But even in book-keeping, Imbert failed. In his recent update, he said “subsidies and transfers make up almost 50 per cent of the annual budget.” This was his very lament six years ago.
In 2016, letters to the Editor were reflecting anxiety. Y Thomas exhorted the government to “please get busy with diversification”; and William Lucie-Smith complained of “no coherent economic plan to lead us from the economic abyss.” Express columnist Michael Harris opined, “It has been all talk. Foolish talk. And no action.” Even the Prime Minister confessed: “We have not really changed much in the six-month period. And there is a lot to be changed.”
Today, five years later, Dr Rowley could say the very same thing. Because he retained his finance minister whose main strategies were taxation, borrowings for consumption, one-off cash from assets and repeated drawdowns from the Heritage and Stabilisation Fund totalling $15 billion. Irresponsible and untenable! Yet Imbert, with his perennial politicking, constantly claimed success, lionising himself with the song, “I did it my way”.
Up to last year, even with his mid-year budget review projecting a fiscal deficit of $14.5 billion, the man was saying the country is in “a good place”. Preposterous!
Throughout his tenure, Imbert failed to acknowledge the global energy revolution sweeping the world. Shale was transforming the United States from the largest importer to the largest exporter of oil and natural gas; Big Data and Artificial Intelligence were leading to massive oil and gas discoveries; and renewables and electrification of transportation had arrived, all creating an enduring global oil and gas glut. Prices were dropping, decimating national revenues. In 2017, the Government had its lowest revenue in a decade of $36.2 billion. The writing was on the wall but Imbert remained frozen in the fading paradigm, “Our oil, Our gas, Our future”, hoping for a return to boom times.
Meanwhile, he borrowed massively to “maintain our lifestyle”. Imbecilic! We were a debt-ridden nation before Covid-19; the country’s total debt reaching TT$120 billion by January 2020 from $84.1 billion when Imbert assumed office. In its downgrade, Standard and Poor’s (S&P) cited “deterioration of the country’s debt burden and the interest burden over 2017-2020,” because they saw no revenue, existing or projected, to service our humongous debt. For five years, Imbert had ignored generating new foreign revenue streams, the most critical economic imperative facing the nation.
Were it not for our foreign reserves, we would have long gone under. They met a healthy US$10.4 billion in 2015, plus a Heritage and Stabilisation Fund of almost US$6 billion. But that security has been drained thin.
Our non-borrowed reserves have declined to about US$5 billion today. A 50 per cent drop since 2015! With reserves, earned and borrowed, combined with HSF drawdowns, an estimated US$6 billion would have vanished under Imbert. And with no improvement to the country’s earning capacity. Now we cannot pay our bills. What an indictment! Shame!
Three years ago, recognising his inadequacy, I called on the prime minister to fire Colm Imbert. Today, before this minister completely crashes this economy and ruins the nation, he should resign. Just go!