Waiting
on an oil shock
By
Luis
Araujo
Trinidad
Guardian
Port
Spain
Petroleumworld.com
08 14 06
On
Tuesday, Central Bank Governor Ewart Williams was
noting that Government does seem to be getting the
point that the level of public sector spending is
putting pressure on the economy.
At
the same time, virtually across the road, at Crowne
Plaza, Prime Minister Patrick Manning and some of
his Cabinet were outlining Government’s present
projects and future plans. Mr Manning even noted
that few in the audience at Crowne Plaza, made up
mostly of businesspeople, would have the kind of
job satisfaction he enjoys.
So,
is Government getting the point or not? From some
of the statements, it would seem so, but actions,
as they say...
Tuesday’s
Breakfast with the PM comes at a time when businessmen
in the non-energy sector are complaining about how
hard it is to get workers and to keep them. Minister
in the Ministry of Finance Conrad Enill countered
last week that labour was not short, but rather
that there is a disconnect between those who want
jobs and those who are offering them.
Some
who are searching for jobs simply don’t know
where to find them, was what Mr Enill was saying,
notwithstanding the fact that almost every shop
window these days has a “help wanted”
sign.
Who
are we fooling?
As
the Governor pointed out on Tuesday, the fact that
T&T is close to full capacity is also seen in
the traffic jams that simply eat away at productivity.
Does
T&T need improvements to its infrastructure?
Yes.
Should
we be taking advantage of high oil prices to do
that? Again, yes.
The
problem is that Government does not seem worried
about what the pace of that development is doing
to sectors like manufacturing. Mr Enill said that
the Government has set up industry teams but that
should have been done before it embarked this level
of expenditure. Didn’t anyone think of studying
what the effect of such a large public sector programme
would be before the fact?
To
now be studying those effects would mean that the
non-energy sector would have lost valuable ground.
No, it’s not at a crisis. Life goes on and
manufacturers are still doing their thing, but that
belies the fact that the sector is not expanding
as it should or could.
Do
we wait for another oil shock to look again at the
non-energy sector? Manufacturers could look further
afield, to Latin America, but where are they going
to get the labour from?
As
Mr Williams noted, it’s not simply the size
of Government spending that’s important, but
how well the money is spent. But the signs are there
that the money is not being put to the best use.
As a simple example of that, Mr Enill said that
he is expecting a surplus this year because some
of the money allocated could not be used. Some projects
that were planned just could not move ahead.
That
would suggest that the Government is having a problem
with implementation. That should mean that it could
then allocate less money next year and focus on
completing projects.
It
should, but I would bet that the upcoming budget
is going to be bigger than last year’s, just
as last year’s budget was bigger than the
previous budget. Even in the face of the obvious
strain on the economy, even as some say that slowing
down the pace of expenditure would be a good idea,
I would bet that, as I write this, next year’s
expenditure is already being increased.
I
hope that I’m wrong. What’s your bet?
Trinidad Guardian
Thursday
10th August 2006
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