By Dr Marlene Attzs,
There was the usual hype in the media in anticipation of the budget—interviews and perspectives being shared about what to expect in the budget package for fiscal 2020.
Some interviews with the average Trinbagonian and carried by one daily paper, saw people talking about wanting a budget that led to “betterment”. Finally, the population was getting it!
The numbers in the budget are of little use if they do not lead to “betterment” or “development” for the average Trinbagonian.
In case you missed it, we are in election season—Local, General and the THA elections—all due within one year.
Some of the economic measures presented in Budget 2020 included an increase in the minimum wage from $15 to $17.50; an increase in the number of OJTs and also in their stipends; an increase in the wages for CEPEP and URP workers.
As I’ve said for the past five years or so, CEPEP without reform is unsustainable and simply reinforces a dependency syndrome that “the government will provide”, as opposed to transition work programmes.
Transition work programmes initially cater for the more vulnerable in our society and eventually allow such persons to ‘transition’ out of government-provided programmes into independent, sustainable forms of employment. That continues to be a missing element of the CEPEP and URP programmes.
It’s no surprise that less foreign exchange is being earned from the traditional oil and gas sectors. That translates into less US dollars available on the market since no other sector is earning enough foreign currency to fill that gap.
From the demand side, the national appetite for things foreign has not slowed—we are unabatedly consuming what we do not produce.
This high demand for foreign exchange will be heightened during the upcoming Christmas and Carnival periods.
The exchange rate, which should be depreciating given the excess demand, has been “managed” to maintain some appearance of “stability”. The cost of this management is that our foreign exchange reserves are being depleted.
What is needed from the policy perspective are short-, medium- and long-term solutions to this single source of foreign exchange earnings coupled with a curbing of the national appetite for things foreign—a better alignment between our demand for foreign exchange and the supply of same.
Budget 2020 mentioned “…ban(ning) the importation of Styrofoam for use in the food service industry and to require manufacturers of food containers to introduce additives to make their products biodegradable…”.
Some welcome this renewed call since these products are highly polluting and can take several decades to degrade thus damaging the environment. That said, I empathise with my friends who sell corn soup and souse, some of whom may not adequately appreciate or understand the environmental concerns about the containers that they use daily.
I also wonder if the vendors at Breakfast Shed and their many customers will have adequate time or incentive to adjust to this change. The biodegradable food containers envisaged in Budget 2020 will come at an additional cost to the vendors who use Styrofoam. This additional cost will invariably affect the price of their product—souse, corn soup or home-cooked local food.
I would have liked to see a specific time frame and appropriate incentives to introduce the biodegradable food containers so that the small vendors—corn, souse and home-food—are not significantly impacted.
The Agriculture sector is now a “tax free industry” with the removal of “… ALL taxes and ALL duties on ALL inputs and resources for farmers registered for agricultural purposes …” as stated in Budget 2020.
A couple of dots to be connected here. First, who is a registered farmer? What is the vision for the Agriculture sector? Are there incentives to make agriculture more technology-driven, less land intensive and more attractive to youth?
I ask these questions since among other things, T&T has limited arable land and the conundrum often is land for agriculture vs land for houses. There also is the obvious linkage between a sustainable agriculture sector and food and nutrition security.
The migrants in our midst did not receive any mention in Budget 2020. In May 2019, the Central Bank estimated it could cost the state around $620 million dollars a year to support the Venezuelans who immigrated to T&T. This cost would include access to health care, education and housing. A missing element of Budget 2020 to my mind.
Many will breathe a sigh of relief that Budget 2020 was palatable for all intents and purposes, but there are many gaps—those dots to be connected—which will only become apparent over the coming year.
There is little doubt in my mind that the fiscal package for 2020 had more to do with the three imminent elections than “betterment” for Trinbagonians. Alas, I fear that once the elections dust has settled, Budget 2021 will look completely different. That’s just my point of view.