The ability of the former People’s Partnership Government to understand the economic challenges facing the nation and respond decisively with a strong economic plan is largely responsible for the affirmation of the long-term foreign and local currency sovereign credit rating by Standard and Poors. This, according to Opposition Leader Kamla Persad-Bissessar, on Standard and Poors’ announcement affirming T&T’s international credit rating.
The Leader of the Opposition cited S&P’s reference to several important factors in the rating affirmation, viz.,
(a) the strong financial buffers which the People’s Partnership Government left behind in the form of sizeable foreign exchange reserves,
(b) a manageable debt level and
(c) a substantial increase in the Heritage and Stabilisation Fund
whilst she noted that T&T is one of the few countries in the Americas with an ‘A’ rating.
The former Prime Minister welcomed S&P’s statement that “the fall in earnings from the energy sector was partly offset by the increases in non-energy revenue which confirmed the actions taken by the previous Government to increase income from sources outside the energy sector.”
Persad-Bissessar also stated that her administration’s work (to halt the energy decline caused by the policies of the pre-2010 Government) has helped to keep our economy on a strong footing and, she welcomed S&P’s acknowledgement that ‘an increase in exploration activities in the oil and gas sector in recent years should sustain energy production over the coming decade, contributing to long-term economic growth’.”
Mrs Persad Bissessar noted with concern however, that S&P stated in its Christmas Eve release that it has revised the outlook on the long-term ratings to negative from stable. S&P stated: “We are revising the outlook on the long-term ratings to negative to reflect an at least one-in-three chance that prolonged low energy prices could result in potentially low GDP growth prospects and a steadily rising debt burden, causing a downgrade in the next two years.”
Commenting on this, Persad-Bissessar noted the impact of falling global energy prices, and expressed concern that the Rowley Government has failed to accurately assess the challenges, and develop plans to maintain economic stability without undue burden on the population.
Persad-Bissessar said that implicit in the S&P statement on the change in the long-term outlook to negative, were a number of troubling factors including:
· The continuing fall in energy prices and the unlikelihood of a rise in the near future;
· The failure of the Rowley Government to reduce expenditure in their September budget and the prospect of a larger than anticipated budget deficit;
· The declared intention of the Government to increase the debt to GDP ratio;
· The failure to implement investment and growth strategies by the Rowley Government;
· The absence of local private sector and FDI in any new investment and diversification strategy;
· The public brawl between the Monetary and Fiscal authorities which was instigated by the Rowley Government and has now been worsened by the firing of the Governor of the Central Bank, and
· Recent statements by the Rowley Government that they may attempt to use savings from the Heritage and Stabilization Fund.
“While Dr Rowley and his Minister of Finance have used every opportunity to misinform and mislead the population about our finances, they have consistently failed to communicate a clear strategy to manage the challenges. Already, we see that the Rowley Government is forcing the working population to pay for their (government’s) failure,” Persad-Bissessar said.
Persad-Bissessar further said:
“S&P in its statement appeared as unclear as we are about whether the Rowley Government even has a management strategy. This is why they warned that ‘failure to take timely and sufficient steps to address the deterioration of the country’s fiscal profile (arising from the fall in the price of oil and gas) and address the challenge of sustaining long-term GDP growth could result in a downgrade in the next two years’.”
“S&P has, however, shown a deeper understanding of the situation than both Dr. Rowley and his Minister of Finance. While the nation waits to hear of a plan, the Communication Minister, Mr. Maxie Cuffie is arrogantly deflecting media questions about Dr. Rowley’s third trip abroad in as many months by saying that he needs ‘downtime’.”
This is no time for “downtime”, this is no time for “resting because you’re exhausted”. Whether Dr. Rowley needs ‘downtime” or not, citizens are entitled to be told of the Rowley Government’s plan in the present economic circumstances and, to be given assurances that their jobs, incomes, homes, communities and future will be protected,” Persad-Bissessar said.
The Office of The Leader of the Opposition