The continuous fall in this country’s credit rating from Standard and Poors’ (SP) signals the recognition by international agencies that investors have lost confidence in the Minister of Finance Colm Imbert and his government’s ability to manage the economy.
In a recent interview with the Youth Arm of the United National Congress, MP Davendranath Tancoo poured scorn on the Minister’s claim that the rating was positive.
The Finance Minister claimed that SP’s decision to rank this country as BBB- / A-3, “validates our (his) strategy to support the economy in the short term while having a clear plan to put our public finances back under control.”
That is absolute rubbish.
According to MP Tancoo, “we have to look at the history of this Government’s performance under the current Minister of Finance.”
“Minister Imbert has been Finance Minister since 2015 to now. In 2014 Trinidad and Tobago was ranked A/ A-1 with a stable outlook. By December 2015, SP reported that the outlook was negative. And every year since, this country has fallen in the ratings and outlook. Today I believe that the combined rating and outlook is the worse rating than we have ever been at since 1996, proving that Colm Imbert is the worse-performing Minister of Finance in our nation’s history.” Decades of progress has been lost under this Minister.
Tancoo said this BBB- / A-3 rating is the same as last year and had resulted in perhaps the worse negative flow of FDI in our history. According to the World Investment Report, individual investors had so little confidence in Government that Trinidad and Tobago had net outflow of FDI of US $439 or TT$3 billion in 2020.
He surmised that it is likely that this collapsing confidence in the Government’s handling of the economy, is what caused SP to downgrade the country’s outlook, from stable to negative this year.
Investors’ loss of confidence in the government also prompted the collapse of the Ease of Doing Business index. Investors were being told that it is easier to invest and conduct business in 104 countries other than in Trinidad and Tobago.
Tancoo warned that to the average citizen, this means that things are going to get even worse. It means more job losses, a drop in the standard of living, increased poverty and higher prices of goods and services.
In comparison, Tancoo said during the 2010-2015 period under the Kamla Persad Bissessar-led government, the Standard and Poors’ credit rating for every year was A grade, which meant that investors had confidence in the economy, there was substantial foreign direct investment and local investment, growth in the economy and improvement in the quality of life throughout the country.
According to Tancoo the SP report recognised the last 5 years have been five years of negative real GDP per capita growth. In fact, the statistics show us that the economy has contracted under Imbert by $25 billion between 2015 and 2020, with the current year expected to contract even further.
SP reported that Real GDP in this country remains below that of other countries with similar income levels and predicted even further contraction in real GDP into 2024.
Tancoo said SP’s expectation of a potential improvement in economy was based on improved energy production, particularly natural gas in the immediate and near future. But given recent announcements by major gas producers, he cautioned that this is unlikely to occur.
Even so, SP is also predicting continued contraction in the NET FDI to GDP over the next three years despite its hope of a rebound in energy revenues.
Tancoo said that none of these are good indicators. These are a continuation of the collapse we have seen as a country under the Minister and his Government.
The MP expressed concern that the the fact that the Minister of Finance refuses to accept his consistent failure in the face of irrefutable evidence does not bode well for our country.
The failure of the government in the past 6 years to stimulate the small and medium sized business sector, or to create an environment conducive to investment has resulted in the collapse of the economy and our growth potential.
As a result, citizens will see further contraction of the economy, more job losses, falling GDP, increased costs of Electricity and water, higher food prices and increased tax burdens imposed by the government.
Tancoo stated ” The Minister of Finance has done a horrendous job of managing this economy and what he needs to do now is face the population with the truth that under his hand, under his watch and under his policies, our country and economy has suffered drastically!”
Unless Imbert faces the truth, Tancoo believes that Trinidad and Tobago will continue to suffer from a crisis of confidence and businesses and citizens are in for an even worse time.