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Raffique Shah


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Confusing ‘Dookonomics’

By Raffique Shah
Aug 21, 2011

Minister Winston Dookeran confuses me. He insists that the Budget deficit for fiscal 2010-2011 remains at around $8 billion, as he projected last year. Yet, he admits that Government collected $2 billion in unanticipated revenue from delinquent taxpayers who responded to the tax amnesty. He also admits that oil prices have been higher than budgeted, and prices of other downstream commodities (methanol, ammonia) have been buoyant.

Based on the above, one would assume that revenues for the year will have improved by at least $2 billion, or maybe $4 billion or so. Logically, therefore, unless the expenditure side of his balance sheet also increased, wiping out the gains made, the deficit should be substantially lower than was anticipated.

But watching "sad-face-Dooks" spelling out the country's economic woes, it is easy to understand why so many people believe Trinidad and Tobago is on the brink of economic disaster. Targeting the unions that are demanding more than five per cent increase in wages and salaries for public sector workers, many people cry: "But dem greedy unionists ‘ent see wha happenin in de world? Dey want to bring down de govament…all ah dem is PNM stooges!"

Before I go further, let me offer a word of advice to my union comrades. If many of the very workers you are fighting for are prepared to accept Government's five per cent, what's the point in waging relentless war? Put the offer before your members, referendum style, and let them decide. If 60 per cent or more agree to accept it, bow to their decision.

The alternative is to soldier on, demanding what you see as decent increases (in keeping with the increase in the cost of living over the three-year period), taking industrial action — only to find the generals are on the frontline with no troops behind you! What happened when the Association representing police officers endorsed sickout action by its members was predictable. Few believed there would have been a shut down in law enforcement. And more believed it made little difference whether or not the police reported for duties. The crime rate, citizens are convinced, has little to do with policing.

By letting the membership decide, should they choose to accept Government's offer, no one can blame you when, two months down the road, the very workers cry out, "Boy, we ketchin' hell…we cyah even buy food to eat!" Or when they have no money to "top up" their many cell phones (very important items, these phones), or meet their rents or mortgage payments. You absolve yourselves by letting them decide. After all, you can lead a jackass to the market, but you cannot force it to bray. A word to the wise.

But back to Winston and his confusing "Dookonomics". In one breath, the minister says we are sitting on the edge of disaster, hence the main reason Government cannot afford to engage in a spending spree. In another, he sees "blue skies" on the horizon. If ever there were mixed signals, Dookeran invented them.

In response to my last two columns that called for trimming some subsidies and implementing other measures to curb expenditure and raise revenue, critics said I am not an economist (hence, I guess, I have no basis to advance such proposals). Indeed, I am no economist, but I have more than enough experience, and I have studied global economies to the extent that I can accurately assess certain developments, sometimes before the experts do.

Last week, for example, I said that oil prices will rebound. They already have, albeit marginally. I criticised Standard & Poors for very poor judgment in downgrading the US credit rating. Fitch, another rating agency, concurred with that view, as did many world-renowned economists. Now, every-man-Jack, even some of my unionist comrades, is calling on government to address the glaring waste of the fuels subsidies.

Robert Mayers went a step further. On television last week, the financial and investment analyst accused governments (note plural) of not being serious in collecting revenues they ought to be adding to the coffers. Whereas the last government went overboard with its proposed property tax, this government has not collected the $300-$500 million available annually under the old system, for two successive years. That's $1 billion in revenue shortfall. The business sector gets away with murder when it comes to collecting VAT payments, but not remitting huge sums to Inland Revenue.

In addition to these glaring examples of omission, there are thousands of motor vehicles on the roads without insurance or inspection certificates. Delinquency is rampant among people who fail to pay water rates (but are never disconnected), HDC rents and mortgages ($200 a month for decent apartments, yet some people have not paid for 20 years!), to name two that come to mind.

On the CL Financial "black hole", why the hell does the government not sell some of the company's valuable assets to recoup the $5 billion or whatever taxpayers forked out to keep that sinking ship afloat? Why does government dole out tens of millions of dollars for just about every cultural or religious affair, year after year? Why, "Dooks", why this wanton waste?

Look, I organised a major sporting event (the international marathon) for 25 years. I secured sponsorship, paid out hefty prizes, the event was highly successful—and I never asked government for a dollar! The one thing I requested of them—closure of the course to vehicular traffic—I never got.

Now, anyone wants to teach me self-reliance? Or economics? Ah gorne!

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