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Raffique Shah


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Cutbacks must start at the top

By Raffique Shah
November 23, 2008

So we have come full circle-responding only when the White "massa", or "missus" in this case, wields the whip. Government has belatedly decided to review its expenditure in light of the global financial and economic crises. The announcement to that effect came immediately after the IMF's Christina Daseking warned government about its spending spree, saying it must rein in unnecessary expenditure if the country is to weather the global storm.

What is the perception, given that numerous local economists, even ordinary people with common sense, have expressed similar sentiments long before Daseking spoke out? Not that Prime Minister Manning is dismissive of advice from locals, but submissive to whatever comes from foreign officials? It may well be that Mr Manning was mulling over the move for some time, in which case his timing was all wrong.

I should hate to think that he deliberately ignored Central Bank Governor Ewart Williams' repeated injunctions about containing inflation and reining in public spending. Or that he has no time for the freely-shared wisdom of eminent economists like Eric St Cyr, Gregory McGuire, Dennis Pantin and Ronald Ramkissoon, to name a few local luminaries?

I agree that the country is not yet in crisis, nor are we about to enter the hellhole some politicians and politically motivated pundits visualise through their tainted glasses. In relative terms, the local economy is far better off than most countries' globally-although when one looks at our infrastructural underbelly, one might think we are grossly undeveloped. The daily floods in Port of Spain and elsewhere in the country, the ridiculously high crime rate, the nastiness that pervades the country, are hardly signs of progress.

Government is not to blame for the entire mess-that much sensible people recognise. When it comes to managing the economy, though, the ordinary citizen has no say, hence no responsibility. That rests on the shoulders of those who offered themselves for office, who willingly accepted the mandate to govern, to manage our resources, to preserve our patrimony. Ever since the oil and gas dollars started flowing, Mr. Manning started spending. Not prudently, I need add, but wildly.

As Joe Private, I had no problem with Cabinet spending money on a new mansion for the PM. I have repeatedly said whoever holds that office is CEO of the country. If CEOs of certain corporations live like kings and queens in palaces, why should our PM live in a sty? I don't see anything wrong with paying ministers adequately for their services, once they perform. I have also come out strongly in favour of government's housing programme: it has not only helped poor-to-middle-income put roofs over their heads, but it has dampened prices in a real estate market gone crazy.

For all the good things the Manning Government has done, though, it has tainted them with an expensive coat of irresponsibility. If cutbacks must come to stabilise the ship of state, let's start chopping some of those grandiose but ill-conceived projects. That offshore island the PM has touted, forget it: it's an ultra-expensive dream that would turn into a colossal nightmare. We do not need it. Then throw the rapid rail idea where it rightly belongs-in Colm Imbert's waste receptacle.

And don't you dare ask me if that lies upstairs or downstairs the minister's chamber. The alternatives are there and they are infinitely cheaper. Note I have not condemned the water-taxis, although I suspect their impact on traffic congestion would be minimal.

Forget, too, the LNG "Train X". Sure, we make much money off LNG. But with questionable natural gas reserves, and given that our downstream energy plants are already yielding more revenue than we can spend, we don't need "X". Besides, the number of countries that are getting into the LNG business, among them Qatar and Russia with unimaginable gas reserves, let's stay with what we already have. I imagine by now the PM has given up on his promised "three smelters". Good for him, good for us.

The PM has hinted at cuts in workers' wages and salaries, at citizens having to tighten our belts. Start that exercise at the top-no better place to set examples. The PM should announce a 10-to-20 per cent cutback in salaries among ministers, MPs and senators.

Surely, if ministers cannot live comfortably on, say, $30,000 per month, how in hell do they expect middle-income workers to survive on $5,000 a month? Worse, what of the mass of under-employed who must make ends meet on $3,000 a month or less? Ask the tens of thousands who are employed in manufacturing, the service sector, retail stores, agriculture, even CEPEP.

This economic crisis offers us an opportunity to demand productivity and performance, not just from shopfloors, but from executive suites as well. With increased productivity, there will be no need to cut back on wages: demand performance, pay bonuses to those who deserve them. Both the public and private sectors should seize the dark cloud of recession to correct this anomaly that has haunted workplaces for far too long. This economic downturn could be a blessing if we battle it with brain and brawn.

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