Jun 2010 Financial News

Dookeran: Economy in a mess...knocks 'pathetic' fiscal management by PNM government

Jun 11, 2010

Finance Minister Winston Dookeran said yesterday ’pathetic’ fiscal management under the former People’s National Movement (PNM) government has left the economy in a mess.

Interviewed following yesterday’s post-Cabinet media conference on what prompted the bleeding of the treasury he had alluded to earlier, Dookeran said: ’Non-productive expenditure in many areas, and that led to no revenue coming into the country because the growth has fallen...so basically, it is bad priorities, apart from corruption and other issues like that, and wastage; we just kept spending money without having an income stream.’

Asked if there were hard times ahead, Dookeran said: ’At this point in time, yes. Because the figures have confirmed what I have been saying; the fiscal management was pathetic.’

Asked whether the economic boom days are over, he said: ’Oh, definitely. Now it’s about pulling ourselves back and seeking to get ourself working again.’

Dookeran said he had submitted to Cabinet a comprehensive report on the economy.

At the post-Cabinet news conference at the Office of the Prime Minister, St Clair, he said things did not look good at all, and there was an ’uphill task’ ahead.

He said squandermania, corruption and bad fiscal decisions, such as the multi-billion-dollar financial rescue of the CL Financial Group, all contributed to the current ’worrying’ state of the economy.

Dookeran has appointed several teams to submit reports, including one on the CL Financial restructuring, with a plan to stop the ’bleeding’ of the Treasury.

’I informed the Cabinet that there are many worrying directions that are ahead of us,’ said Dookeran.

He said the first concern was the fiscal deficit that will emerge this year.

’We have seen a dramatic decline in the cash balances of the country and at this point in time, we believe that can be an area of great risk for this nation,’ he said.

Dookeran said at present, the country’s recurrent expenditure was much higher that its recurrent revenue.

In other words, the country is borrowing to support its recurrent expenditure, and the amount this year totals $788 million.

Dookeran said the direction of the financial indicators for our foreign reserves, as well as the rising balance of our payment deficits, is cause for concern.

He said the public debt was ’extremely worrying’, explaining the national public debt is in the vicinity of 51 per cent of our gross domestic product, but this does not include the State enterprises debt which is yet to be assessed.

Dookeran said foreign reserves now stand in the vicinity of US$8 billion, with an import cover for 12 months, but ’the direction in which it is moving within the last few years is troubling; each year it is being reduced significantly from where it was the previous year’.

He said not even the country’s savings can help the situation.

Dookeran said the Revenue and Stabilisation Fund has US$3 billion, but no money was injected for 2009/2010, which is legal requirement, and which the People’s Partnership Government now has to ensure.

’In the scheme of our financial situation, it will help, but it will not be a significant help to restore our fiscal balances, even if we are to access it,’ he said.

He said another challenge was CL Financial, which will deserve the full attention of the Government.

He said the former government ’wrongfully got itself in this position and having done so, it is now left upon us to find a way out of that situation, at least from the point of view on the demands of the public Treasury’.

Asked if the People’s Partnership will be able to keep its manifesto promises and pledges for its 120-day plan, Dookeran said the Government remains committed to do so but some of these proposals will have to be done through phased introduction.


Source:
Anna Ramdass anna.ramdass@trinidadexpress.com
Trinidad Express
Friday June 11, 2010

http://www.trinidadexpress.com/index.pl/nart?id=161694618&weba=NWSNews