IMF

2023, 03/16

An International Monetary Fund (IMF) staff mission again “encourages” the Ministry of Finance (of T&T) and the Central Bank to remove all restrictions on current international transactions as a means of creating a more investment-friendly business environment that would drive diversification of the economy.

The advice of the IMF team to remove foreign exchange restrictions while providing enough foreign exchange to meet the demand for all current international transactions was in its concluding statement following the Article IV consultations with authorities (Ministry of Finance and the Central Bank) from March 1-14.

In the report, IMF staff said a more efficient foreign exchange infrastructure would help eliminate foreign exchange shortfalls.

“It would also help create a more conducive business environment for the private sector to invest and diversify the economy. Over the medium term, greater exchange rate flexibility would reduce the need for fiscal policy adjustments to restore external balance and create room for more counter-cyclical monetary policy (which would stimulate a slowing economy and slow an expanding one). IMF staff encourages the authorities to remove all restrictions on current international transactions, while providing sufficient foreign exchange to meet demand for all current international transactions.”

Current restrictions of T&T’s foreign exchange regime include the limitation in the movement of T&T’s main exchange rate, the US to TT, to a narrow band in which the selling rate is not allowed to go beyond the ceiling of US$1 to TT$6.7997.

The authorities also limit the amount of foreign exchange sold to authorised dealers. That has led local commercial banks, who are among T&T’s authorised foreign exchange dealers, to restrict the amount of foreign exchange they are able to sell to customers, both companies and individuals. This has resulted in a very active black-market trade in US dollars and long delays in the completion of payments for imports and foreign services.

The IMF team also recommended that the Central Bank should increase its repo rate from 3.5 per cent, which it has maintained since March 2020, as a means of heading off inflationary pressure and mitigating capital flight.

“Increasing the policy rate should be seriously considered to contain inflationary pressures and narrow the negative interest rate differentials with the US monetary policy rate. This would also help mitigate potential risks of capital outflows and reduce incentives for excessive risk-taking that could threaten financial stability.”

The Central Bank’s next monetary policy announcement is March 31, 2023.

A chronic shortage of foreign exchange since 2014, was flagged as an issue by former Central Bank governor Jwala Rambarran, whose appointment was unlawfully revoked by the then Acting President, now controversially appointed President, with reservations from the majority, about her political affiliation to the ruling regime.

Finance Minister Colm Imbert told the Jamaica trade mission T&T was experiencing a foreign exchange shortage, not a crisis. Establishment by the EXIM Bank of a window in 2018 facilitates access to foreign exchange by non-energy manufacturers.

“From what I have been told by the business community, it has been a very successful programme. So far, we have put almost US$1 billion into that entity for distribution,”

The statement by the IMF team was not the first time the institution urged the Government to address foreign exchange issues.

In November 2021, at the end of an Article IV consultation, the IMF team also “underscored the need for an appropriate policy mix to support the exchange rate regime and called for the removal of restrictions on current international transactions.”

In a February 9, 2022, statement, the IMF said: “A proliferation of special-purpose facilities at the EximBank to prioritise foreign exchange access to manufacturers, importers of necessities—including State-owned Enterprises—have produced a hybrid exchange rate system that is prone to inefficiencies …
“Staff also encourages the authorities to eliminate exchange restrictions and multiple currency practices in a planned manner while providing sufficient FX to meet demand for all current international transactions.”

Imbert thanked the IMF team, “for the thorough work and high-quality exchanges that have taken place during the two-week mission. The IMF’s acknowledgement of the prudence, resilience and medium-term orientation of our fiscal policy is indeed gratifying, coming as it does after the multiple shocks faced by Trinidad and Tobago and the world economy over the last three years.”

On the issue of T&T’s exchange rate regime, Imbert said: “The IMF has encouraged us to continue ‘maintaining sound and consistent policies’ to support our current exchange rate arrangements, while acknowledging the need to balance growth and price stability objectives.”

Net official foreign reserves as at February 2023 amounted to US$6.75 billion, which provides the country with 8.5 months of import cover.

 

UWI money crunch

… Eyes new projects in fight for survival

Mar 14 2023

The University of the West Indies (UWI) Trinidad is fighting to stay afloat by focusing on strengthening the chances of self-sustainability and economic survival. as enrolment numbers dwindle and financial concerns continue to linger,

Campus Principal, Professor Rose-Marie Belle Antoine said despite offering the lowest degree costs out of all regional campuses, during the 2021/22 period, student enrolment numbers for undergraduate and postgraduate programmes decreased by 8.7 per cent and 28 per cent respectively. Total student enrolment declined a further five per cent from 15,931 in the previous year to 15,130 students.

In addition to undergraduate enrolment dropping by a further 4 per cent from the period 2020-2021, there was also a 38 per cent decrease in students pursuing undergraduate certificates/diplomas.

There has also been a steady decline in enrolment, most notably for postgraduate programmes that were affected by the August 2020 discontinuation of the Government Assistance for Tuition Expense (GATE) for tertiary students in that category and adjustments to other categories of the programme.

Previously, both undergraduate and post-graduate students had access to the GATE facility, which provided free tuition to candidates. Now, however, students must undergo a means test to qualify and are able to access varying levels of funding based on meeting certain criteria.

Belle Antoine told the Campus Council Meeting the university had also been severely affected by an 18.8 per cent reduction in Government subventions, which added to the university’s current financial strain.

She revealed a 16.8 per cent reduction in campus staff due to the lessening income.
“We were not able last year to increase tuition fees, as we had hoped, to make ourselves market ready and sustainable and self-sufficient.”

As part of the institution’s effort to become self-sustainable, Belle Antoine announced university plans to embark upon  the building and commercialisation of a cocoa factory, in collaboration with the Cocoa Research Centre and other entrepreneurial initiatives. She announced plans to utilise the vacant South Debe Campus, to house the Global School of Medicine to ensure continued growth.

“Our campus strategy is to build on the gains. Particularly in terms of revenue generation, innovation, entrepreneurship and so on. … In fact, investing in our future, tangibly, and intangibly,” Belle Antoine said.

UWI vice-chancellor, Professor Sir Hilary Beckles said the Faculty of the Medical Sciences was ‘extraordinary’ and contributed significantly to the country’s COVID-19 management and serving the public.

“I believe that the university in 2020/21, has had its finest hour. .. because the way in which the university has gone about working with the governments and the Ministry of Health, the public health infrastructure across the region in each jurisdiction, the way in which our medical science colleagues have gone about this matter of serving the public interest, has been extraordinary… It had a lot to do with the role of the UWI, working hand in glove with the Government.”

Beckles said they were hoping to piggyback on this success with the Global School of Medicine initiative. However, he admitted UWI would need the support of the Government for it to succeed.

“From Mount Hope, through to Couva, all the way to Penal/Debe, that spine will become the medical artery of the country. This is an innovative project but can only come to fruition as a developmental vehicle for the country if the Government works with the campus and the campus works with the Government.”

According to Belle-Antoine, the South Campus is currently under repair due to its lack of use since its completion in 2019. She said this is expected to change with the refurbishment as part of the campus’ strategic plan to create considerable revenue by boosting international student recruitment.

“We want to empower what is now a dead space at the South Campus, to bring that to life with the Global School of Medicine. In so doing, we can leverage the considerable advantages that we have already, the reputation of our medical faculty and accreditation status.”

No estimated date was given for the opening of the Global School of Medicine or the establishment of the university’s cocoa factory. Despite financial constraints, the university received a TT$6.7 million increase (TT$52.2 million) in externally-funded special research projects and scholarships for 2022, across all faculties, adding to the university’s aim to expand its global footprint

The University of the West Indies Development and Endowment Fund (UWIDEF) has partnered with MW Productions to stage a benefit concert for deserving students on April 2 at St Augustine Campus.

Under the theme, Ignite, the concert will feature Lydian Singers and Signal Hill Alumni Choir performing a wide, energising repertoire across several genres.

For more than 30 years the UWIDEF has represented the regional institution’s commitment to students and community. Launched in April 1989, its primary objective is to provide scholarships at the undergraduate and postgraduate levels promoting academic excellence, alleviating the financial hardship of deserving students, and facilitating student interchange among the UWI campuses. UWIDEF also funds research in selected areas, endowments for chairs and lectureship in key disciplines; and capital projects.

Ignite – A Benefit Concert, which also pays tribute to the regional institution’s 75th anniversary, has the support of Angostura Chill, Republic Bank Ltd, and Viva Sparkling Flavoured Water, in its aim to light the way for deserving students to achieve their goals, regardless of their circumstances.

Tickets cost $250 and are available at UWI’s Student Services – 730-6489, Adam’s Bagels – 622-2435, Solera Wines and Spirits, Port of Spain – 628-7258 and Marabella, 227-2282, or via MW’s 24/7 Virtual Box Office. Reservations can be made at https://bit.ly/IGNITEBenefit or at 742-2752 or 342-9388.

For more info: e-mail uwide@sta.uwi.edu, mwproductions.tt@gmail.com, 749-0669, 683-1927, or follow on UWI and MWProductions Facebook and Instagram pages.

 

 

UWI student enrolment

15 mar

Principal Prof Rose-Marie Belle Antoine said the University of the West Indies, St Augustine experienced an alarming 17.5 per cent drop in enrolment for the 2021/2022 academic year. This concern has become a front-burner issue for the campus administration, which also noted a reduction of government subventions in 2022.

Even with the successful introduction of a hybrid system, the lowest tuition fees, short courses and certificate courses, the university reported during its campus council meeting that enrolment in several faculties were low.

Aside from attracting more students, Antoine, in a presentation on the university’s status , said developing a self-sustainable module is crucial. Consolidated income fell from $529,611,000 in 2021, to $485,146,000 in 2022. Although the 2022 figure represents 52.07 per cent of the university’s income, it reflects an 18.8 per cent reduction. Antoine said the university is now working to make “concrete gains and success.”

“We appreciate they (faculties) were operating in a difficult economic environment and also the fact that there had been adjustments to Government Assistance for Tuition Expenses (GATE). We did see a slide in our enrolment, a further five per cent, compared to the previous (academic) year (2020/2021). So we are now down to 15,130 students.

“Undergraduate students dropped by four per cent to 10,847 although this was uneven because we saw some faculties, engineering, law, medical sciences and sport having an increase in enrolment. The others declined.”

In June, 2022, Finance Minister Colm Imbert announced a cut in funding to the UWI St Augustine campus after rejecting UWI’s proposal for an increase to tuition fees.

Imbert’s rationale was that government could not continue making yearly contributions and still cover the GATE allocation to the university.

Apart from the subvention reduction and a decline in enrolment, the university is now dealing with protests and threats by its staff over wage negotiations for daily and weekly-rated workers, monthly-paid administrative technical and service employees.

In a breakdown for the 2021/2022 academic year for undergraduate enrolment, Antoine said UWI saw an 18 per cent decline in humanities and education studies. There was also a seven and five per cent decline in social sciences and science and technology respectively.

There was a 38 per cent decrease in diplomas. However, engineering, law, medical sciences and sports faculties saw a five, eight, two and 15 per cent growth in undergraduate degrees.

The university’s greatest concern is the 26.5 per cent decline in postgraduate enrolment.
“This was a decline of eight per cent and as much as 31 per cent in law, which is a self-financed programme.” Under the postgraduate programme humanities and education declined by five per cent and medical sciences also experienced a drop by four per cent.”

The campus also recorded a six per cent decline in graduates – two per cent increase of undergraduates and 23 per cent decrease of postgraduates. Overall there was a 82 per cent increase in students present for their graduation ceremony.

Even with the downturn, the university had hit a few milestones toward providing a more efficient and accessible education product during covid19 and post-pandemic. The campus digitalised the Research and Ethics Committee, scholarship applications and approval as well as the campus research and publication fund. The campus introduced the grade-point average to undergraduate programmes. It managed to review 355 courses and automated a number of its processes to improve time delivery.

Antoine hailed the campus’ new four-part virtual student orientation process, online career exploration, planning and development workshops.

She spoke of new devices, renovated washrooms and CCTV system installation, a new pavilion at the northern pedestrian entrance and library renovations using money from the School Amenities Fund

 

 

 

UWI wages

Mar 03 2023

Concern, but not panic is the current situation at the University of the West Indies (UWI) after a threat of industrial action was issued by academic, senior administrative and professional staff.

UWI St Augustine principal Professor Rose-Marie Belle Antoine said she is just as anxious as her staff about the state of wage negotiations which have been in limbo for years, with no change in staff wages since 2014.

“We are well aware that if negotiations break down or they are not coming to fruition as is the case that industrial action is the usual response of a union. So from that point of view we take it very seriously,” she said at the launch of the UWI-Roytec and Coca-Cola Growing Together Programme.

Professor Belle Antoine said she, like the West Indies Group of University Teachers (WIGUT), is awaiting word from the Chief Personnel Officer on the next step in negotiations. She acknowledged the action by staff was taken during a period when no classes will be disrupted on campus.

However, UWI staff threatened to withhold grades and exams if negotiations remained stalled.

“At this point, I don’t think there is any panic on the part of anyone. What we are attempting to do and continue to do is to get that remit, to get that response from the CPO. As soon as we have definite word I have promised the union and the staff that I will communicate very clearly,” said Belle Antoine, who specialises in labour law and industrial relations.

She said industrial action is an option available to the union but she is hopeful a resolution can be reached. She is doing all she can to get negotiations going promptly.

“Of course, the campus will always be concerned from all aspects. We are concerned that we have not moved forward in negotiations and , we would always have to be concerned if there is industrial action, I mean industrial action is probably a way of life but it is always disruptive. Of course, it’s a last resort but nobody wants industrial action, including the union I’m sure.

If anyone can say to me what else I can do, I am willing to do it. I am just as anxious as my staff and the union to get a remit and begin negotiations and have successful negotiations. I can assure you, I can speak for myself, I can say to you we are doing everything in our power officially and unofficially to get an official response and to get a remit.”

(Energy revenue boosted state coffers which can fund Trinidad students. The VC can divert funds to Caricom students from the ideology project at Centre for Reparation Research and the Caricom Reparations Commission with its focus on one community. National Committees on Reparations in 12 Member States should divert funds from ideology to their students in Trinidad.)

 

 

 

President’s medals

4 mar

The Education Ministry announced that President’s Medallists 2022 are Saira Mohammed of St Augustine Girls’ High School and Makaya Huggins of Holy Faith Convent Couva.

Mohammed is the top performer in environmental studies, information and communication technology, mathematics and natural sciences. The 19-year-old earned all distinctions in Chemistry, Physics, Biology, Caribbean Studies Unit 1 and Communication Studies Unit 2. Mohammed, from Chaguanas, is now studying medicine at St George’s College in Grenada. She praised those closest to her for helping her achieve such success at the CAPE level.

“I am grateful for all of my teachers who built the foundation for my success, special mention to my science teachers at SAGHs. For Physics, Mrs Dowlath, for Chemistry, Mr Neemar and for Biology, Mr Ramlogan, who are really dedicated to the success of their students. I am proud to give my school this honour. It’s important I also acknowledge my lessons teachers Mr Jamwant and Ms Sangeeta.”

Huggins is the top performer in business , creative and performing studies, language,, modern studies/humanities and technical studies.

The news followed the award of 100 Caribbean Advanced Proficiency Examinations (CAPE) 2022 scholarships. Females won seventy-two scholarships.

20 schools. won 32 open and 68 additional scholarships, with ten in each cognate area.
Naparima Girls High School was awarded a total of 19, nine open and ten additional scholarships, in the areas of business studies, creative and performance studies, general studies, information and communication technology studies, language studies, mathematics, and natural sciences.

Next was Presentation College Chaguanas with 11, four open and seven additional, in business studies, environmental studies, natural science, mathematics and , information and communication technology.

Four Open scholarships were awarded to Kevin Liu (Business Studies), Darian Ramjitsingh (Environmental Studies), Andrew Mohammed (Natural Science) and Akshay Ramlogan (Natural Science).

St Augustine Girls’ High School won nine scholarships, five open and four additional. Four scholarships were for business studies, with the others in information and communication technology studies, language studies, mathematics, and natural science.

Open scholars are Jianna Thomas (Business Studies), Pooja Mangra (Information and Communication Technology Studies), Solange Joseph (Language Studies), Robyn Bhola (Mathematics) and Saira Mohammed (Natural Science).

Hillview College gained eight scholarships, two open and six additional, all in information and communication technology studies.

St Joseph’s Convent – San Fernando and St Joseph’s Convent – St Joseph each took seven scholarships. San Fernando had two open and five additional in environmental studies, mathematics, general studies, language studies, and modern studies. St Joseph had four open and three additional scholarships in information and communication technology, language studies, technical studies, and modern studies.

Holy Name Convent Port of Spain had five additional scholarships, four in creative and performance studies and one in general studies.

Holy Faith Convent Couva, Lakshmi Girls’ Hindu College St Augustine, St Joseph’s Convent Port of Spain won four scholarships each, all with one open and three additional.

Three scholarships were awarded to ASJA Girls’ College San Fernando (one open, two additional), Bishop Anstey and Trinity College East Sixth Form (three additional), Bishop Anstey High School (three additional), Holy Faith Convent Penal (three additional), Naparima College (one open, two additional), and Queen’s Royal College (one open, two additional). North Eastern College, St Stephen’s College, and Vishnu Boys Hindu College each gained one additional scholarship.

A grand celebration is planned at Naparima Girls’ High School’s for 19 scholars, as the school grabbed the lion’s share of national scholarships for 2023.

Nine in the Open category were awarded to Renessa Ramsingh (Business Studies), Isabella Mungal (Creative & Performance Studies), Christin Seecharan (General Studies), Farah Ali (Information and Communication Technology Studies), Angelina Stew (Language Studies), Kayla Dookie (Mathematics), Soriyah Rooplal (Mathematics), Taahirah Khan (Natural Science) and Sonja Maraj (Natural Science).

Principal Karen Bally said she was delighted that despite the odds, the school has continued to excel not only academically but also in co-curricular activities. The love and support that teachers showed to pupils during the pandemic bore fruit, evidenced in the number of scholarships they won. All pupils spent the past two years in online classes.

“Our staff members went above and beyond, answering emails, correcting work and sending back work all hours of the morning and night. They really embraced the technology and ensured that all attended the online classes.”

When pupils failed to attend online classes, Bally said the teachers reached out to parents to find out what was wrong. For those parents who lost their jobs, the school used funds from the Past Students Student Aid Fund to equip pupils with devices and connectivity. They also helped with groceries and teachers formed online clubs to maintain social interaction with children.

“We took care of their mental, social and emotional well-being. In cases where parents lost jobs and students were struggling, our past students counselled where necessary and ensured that all financial needs were provided for.”

The sisterhood which existed at NGHS was responsible for the continued success of all .

“We always want what is best for our students. When they come to us, they become ours and we do our best to make sure they succeed not only in academics but in every other way so they become their best self.”

She noted that the key to Naparima’s success was strong partnerships with all stakeholders.

The Presbyterian Church also congratulated the pupils.

“We are extremely grateful for the hard work and sacrifice of all our principals, teachers, students and parents of our five Secondary schools who have contributed to this success. Our schools received 39 scholarships out of the 100 awarded with Naparima Girls’ High School receiving nineteen, St. Augustine Girls’ High School receiving nine, Hillview College eight receiving eight and Naparima College receiving three,” the PCTT said .

Parvati Girls first scholarship

There were tears of joy at the Parvati Girls’ Hindu College after Karina Maharaj won the school’s first-ever national scholarship,. Starring in Performing and Creative Arts, she thanked art teacher Seema Pustam at the school at SS Erin Road, Debe.

“It was because you believed in me. A little faith went a long way,”

During a special assembly to mark her achievement, Maharaj revealed how she fell ill during her studies and had to force herself to take a break.

Maharaj had some advice to give her peers.

“Don’t give up. You can do it. Take breaks in between and find yourself a hobby.”

The budding attorney said she opted to do art because it was relaxing. Now that she is studying to become a lawyer, Maharaj said she hoped to use her talents to help people.
Her parents Mintree and Rajindranath Maharaj, who own a tent rental company, said they were totally surprised by their daughter’s achievement, although they knew she was a diligent and hard worker. Her father said, his daughter as very studious and hardworking.

“My wife and I work hard in our business to send our children to school, so we are very proud of her.”

Her mother also said she was surprised that Karina had won the school’s first scholarship.

For principal, Dr Sharda Maharaj-Ramjattan, Karina’s success was not unexpected.
Before 2019, Dr Maharaj-Ramjattan said the school could not get scholarships, as it was unable to offer a wide range of subjects because of a lack of facilities. Since the school started to retain its own students for CAPE Studies, she noticed the hard work of Maharaj.

“She was a determined and persistent student. We are so proud of her, very disciplined, very intelligent, resourceful and knowledgeable,” Dr Maharaj-Ramjattan said.

She noted that although they had constraints with space, her 36 members of staff have been rising above their challenges.

“They have been giving their best to their students. They take out their own personal resources to help students. Karina is our first scholarship winner but we have had many other students who have all grade ones who have done very well.”

 

 

National Trust

TT National Trust will host the Keeping History Above Water (KHAW) Conference and Workshop, both virtually and in person in Port of Spain, from March 20-23, free of charge. The activities are part of research into climate change and sea-level rise facilitated by the Trust.

The conference is part of continuing activities funded by the US Embassy Port of Spain under the US Ambassadors Fund for Cultural Preservation grant project, Resilient Heritage TT.

“Climate change and sea-level rise present an existential threat to the economic, social and cultural resilience of island states. The National Trust of Trinidad and Tobago is facilitating important research that will give administrators better data to understand the risks and devise effective mitigation strategies to face these threats.”

The conference and workshop would be the first KHAW event to be hosted outside of the United States.

“It will build on the successful series begun by the Newport Restoration Foundation in 2016. It is being jointly organised by the National Trust, alongside its project partners: the University of Florida Historic Preservation Program (UFHPP) and the Craig Group.

“The conference will feature presentations by international cultural heritage specialists, government officials, adaptation professionals, planners and international climate change experts who will examine the impacts and share best practices regarding climate change and sea level rise in the Caribbean and beyond.”

A workshop would be held on March 23 for select stakeholders and students to discuss the flood risk assessment and sea-level-rise visualisations of the project site, which are the products of research undertaken by the UFHPP since the launch of the project in April 2022.

The National Trust said Resilient Heritage TT is a two-phase initiative aimed at advancing the resilience and long-term preservation of historic sites and cultural resources as they are impacted by climate change.

“The project includes digital documentation of two highly visible and visited heritage areas: downtown Port of Spain (St. Vincent Jetty Lighthouse, Fort San Andres and the PTSC building/Old Railway Station) and Nelson Island Heritage Site, as well as a vulnerability assessment involving engagement with stakeholders for outreach, data sharing and knowledge transfer. The project hopes to serve as a model for documenting, assessing, and addressing the threats of climate change to other heritage sites across TT and in the wider Caribbean region.”

See more information on the website at https://resilientheritagett.com/.

 

No adjustment to fuel prices

At a virtual news conference on the concluding statement of the International Monetary Fund’s(IMF) 2023 Article IV mission to Trinidad and Tobago, released on March 16, Finance Minister Colm Imbert said Government has taken no decision to make any adjustments to domestic fuel prices while international oil prices continue to fluctuate.

While the IMF approved management of the economy to date, the Fund’s assessments are not necessarily a hint of statements in the Mid-Year Review of the 2022/2023 budget between the end of April and early May.

“It is not everything. The Mid-Year Review will be far more focused.”

Observing the volatility of international oil prices, Imbert said, “One has to look at them over a suitable period of time. You could be at US$100 (per barrel) today and next week, you could be at US$75 (per barrel).”

West Texas Intermediate and Brent crude oil were trading at U$72.82 and US$78 per barrel respectively.

He said, “We are monitoring the price of oil to see how it affects the fuel subsidy and we will make an appropriate decision at an appropriate time.”

The current fuel prices are $7.75, $6.97 and $4,41 per litre for premium gasoline, super gasoline and diesel respectively.

In its concluding statement, the IMF welcomed Government’s decision to “partially liberalize fuel prices as it will improve the efficiency and the sustainability of the public accounts.” It was important for Government “to continue providing targeted and temporary support to alleviate the rising living costs among the most vulnerable.”

Imbert will report on income and expenditure, economic trends, TT’s fiscal outlook and other matters such as the establishment of the TT Revenue Authority. He advised the population to wait for the review for information on these and other matters.

On ensuring there is an efficient public procurement system, Imbert said, “ The Prime Minister has given a commitment to proclaim the (public procurement) legislation.” This would happen soon.

17 of the 20 points raised by the IMF about Government’s management of the economy were “overwhelmingly positive.” The other three points were comments and advice from the IMF.

He said it was important for him to provide full details about the IMF’s Article IV concluding statement because there has been misinformation in the public domain about it since it was released on March 16.

Devaluation damage

2023, 03/27

Finance Minister, Colm Imbert, said that a devaluation or a de facto flotation of the TT currency would do “tremendous damage” to the local economy, throwing people into poverty and causing hyperinflation.

At a virtual news conference to discuss the concluding statement of the International Monetary Fund (IMF) team. Imbert explained 20 points made in the concluding statement, issued the day after the mission’s two-week Article IV consultation.

In point 12, the IMF mission said a more efficient foreign exchange infrastructure in T&T would help eliminate foreign exchange shortfalls that have been experienced here since 2013.

“IMF staff encourages the authorities to remove all restrictions on current international transactions, while providing sufficient foreign exchange to meet demand for all current international transactions,” said the mission from the world’s lender of last resort.

Imbert said T&T is not now in an IMF programme and has not been in one since 1991 “and it is unlikely that we will ever get into an IMF programme, at least not under this government.”

This, means “we don’t have to agree with anything that the IMF advises us to do, and we don’t agree with this,” (removing all restrictions on current international transactions). For seven years, this Government has resisted any calls from any sector to devalue or float the TT dollar, because we believe that is going to send hundreds of thousands of people into poverty. We believe it would cause hyperinflation and we believe that it will do tremendous damage. So, when the IMF says that they encourage the authorities to remove all restrictions on current international transactions, we are not doing that.”

In rejecting out of hand the IMF’s advice on removing all restrictions on current international transactions, Imbert said: “We shall not be pumping US dollars into the system for people to buy townhouses in Miami, which is the end result of this. So, when the IMF says they encourage ‘the authorities to remove all restrictions on current international transactions,’ we are not doing that.

The Government’s resistance to the IMF’s encouragement on the foreign exchange issue explains why the current administration came up with its Exim Bank facilities. Through those facilities, the Exim Bank sells foreign exchange to importers of essential foods and pharmaceuticals as well as manufacturers who export a substantial percentage of their output.The Government will continue to expand the Exim Bank facilities to other categories of imports that are in the public interest.

“We will put more money into the Exim Bank, so that our foreign exchange is focused on creating jobs and on boosting exports, and also dealing with the import of essential items.”

Both Imbert and Prime Minister Keith Rowley were members of the 1991 to 1995 Cabinet headed by then Prime Minister Patrick Manning.

Asked whether the flotation of the TT dollar in April 1993 resulted in skyrocketing inflation and recession, Imbert said: “The simple answer to that is yes, but that is not the point. We are now in 2023. I can’t look at what went on 30 years ago and construct a hypothetical scenario. I am telling you, I am not asking you, that if we were to devalue the dollar to TT$10 to US$1, for example, which would be a 50 per cent or 40 devaluation, we would have an immediate increase in the cost of imported goods and we would have immediate demands from the labour unions, which would be very difficult to challenge, for increased wages. That would have a cyclical effect and a domino effect on inflation.”

Imbert did not think the question about the flotation of the TT dollar was a serious one.

“I don’t think you need to be a rocket scientist to figure out that if you devalue the dollar significantly–because we have such a high import bill and because so many manufactured goods and food comes from abroad–I don’t think we need to belabour this point.”

The concluding statement by the IMF mission also said the Central Bank should “seriously consider” increasing the repo rate to contain inflationary pressures and to narrow the interest rate differentials between T&T and US three-month treasury bills. Imbert said that unlike the US Federal Reserve (central bank) which has a legal mandate to use interest rates to contain inflation, the local central bank has no such mandate.

“Our Central Bank looks at all sorts of things– economic growth; credit to businesses, the rate of unemployment, among other things–and makes a very careful decision on the repo rate, in terms of maintaining it at 3.5 per cent. That’s because the Central Bank does not want to crash the economy. Look at what is happening in the United States…. “I want to commend the Central Bank and I agree with its policy. When you look at interest rates, it must not just be narrowly focused on inflation, but must also look at GDP, employment and economic activity.”

He said: “We are not doing this,” referring to increasing interest rates.

Climate

The Parliamenary Joint Select Committee (JSC) on Land and Physical Infrastructure will continue its inquiry on the effects of climate change in Trinidad and Tobago at the companion building, the former Cabildo Chamber. The committee last held an inquiry on this topic on March 15.

The JSC is chaired by Independent Senator Deoroop Teemal.

 

 

TTRA

Mar 02 2023

Lacking inspiration -this is how former finance Minister Prof Winston Dookeran described the T&T Revenue Authority Strategic Plan 2023 to 2025 unveiled by Finance Minister Colm Imbert in Parliament .

According to Imbert with an estimated domestic tax gap of up to $10 billion, the Government, through the TTRA, is “actively seeking” to address this fiscal vulnerability and close the tax gap by improving efficiency and efficacy of revenue collection.
However, Dookeran said the key question is, would these initiatives be translated into institutional change, given the “regular failure” of instruments for public sector reform in T&T over the years.

“It would have engendered confidence that it will happen, if examples of success – in the doing- and an innovative insight to public sector reform was captured. How will the government honour its financial commitments to those to whom it owes money? But a fundamental question is one of political economy, is the tax policy an inducement for growth in the economy?” the former Central Bank Governor explained.

If not, he said the beneficiaries of this would be “minuscule, on the margin,” and not impact on the level of economic activity- taxing consumption and not incentivizing production. This institutional measure should be fixed in a wider context of expanding, not squeezing out revenue in a flat and contracting trend.

He advised that revenue administration measures and tax policy reform, therefore, must work together in tandem.

Economist Dr Vaalmikki Arjoon who shared his insights noted that in the last decade, despite the State’s efforts to collect more tax revenue by not just increasing the taxation rates and the tax base, but also attempting to collect delinquent taxes owed, there is a possibility of an even higher incidence of tax evasion and avoidance.

This may be shown by the decline in the ratio of taxes collected to GDP, which fell from 25 per cent in 2013 to 20 per cent in both 2019 and 2021, reaching its lowest point of 17 per cent in 2017.

“Revenue leakages from weak tax compliance, where people do not pay their fair share of taxes, are likely in the vicinity of over $12 billion – these are revenues the State needs to more effectively provide improved road infrastructure, educational facilities, water, better healthcare etc,” Arjoon outlined.  Such weak compliance, he said, also accounts for the high levels of inequality locally.

Arjoon advised that a major hurdle the TTRA must overcome is the paucity of staff which has increased compliance risk, causing loss of revenue as numerous entities still are not registered in the tax system, do not file accurate declarations and pay on time. Understaffing, therefore, makes it more difficult to do unannounced field visits, detect those who have stopped filing and unregistered businesses and also limits more frequent checks and effective audits to better detect the high levels of tax avoidance.
Corruption in tax administration may also hinder the success of the TTRA.

Arjoon observed a “culture of corruption” among some Customs officers, such as paying a bribe to understate the total amount paid for imports. He said this lowers the total cost, insurance and freight (CIF) value used to calculate duties on imports and VAT, resulting in lower taxes paid by the importer.

“How will the TTRA address these practices, as it is the same officers that will be a part of the TTRA?”

Some officers exhibit poor work ethic, resulting in delays in clearing goods and having to pay customs overtime to get them cleared faster which also drives up business costs. In an e-customs platform, the single electronic window is integral for importers to pay all charges and duties online instead of the current system of lining up at the port to pay using cash or a manager’s cheque.

Data from the global financial integrity report indicates that total export and import misinvoicing since 2008 for T&T exceeds US$4.1 billion on average per year.
In outlining the plan the Finance Minister also suggested machine learning to improve tax compliance.

Noting this is an excellent idea, Arjoon said such systems can quickly detect entities that report unusually low income and pay lower taxes and should also draw data from third parties to ascertain if the correct income levels were reported as third party information can aid in detecting entities that are unregistered and not paying any taxes.

More importantly, the success of any tax administration also relies on public trust. Additionally, Arjoon said there ought to be better value for money once taxes are paid through higher quality of State services. Apart from making it simpler to file and pay taxes through an online platform, compliance can be improved once taxpayers are treated fairly and equitably. If, for instance, VAT refunds are paid on time, there may be less likelihood of firms engaging in tax avoidance practices.

 

 

 

TTMA hopeful for VAT refund payments

According to the T&T Manufacturers’ Association (TTMA) there has been a “long perception” of a need to address deficiencies in the existing system of revenue collection, stemming from limitations, real and/or perceived.

President Tricia Coosal said it is anticipated this institutional change can have a redounding benefit, noting the organisation looks forward to the impact the TTRA would have on the efficiencies of VAT returns.

Coosal said there are significant challenges with the present system for the repayment of VAT owed to the TTMA members, especially the SMEs, faced with cash flow challenges.

“Manufacturers continue to face this significant challenge of VAT returns being paid out, and importantly, payments should conform within three to six months, according to law. Unfortunately, we have moved away from this obligatory deliverable by those in charge of repayment of VAT,” Coosal said.

Hopefully, she said with the TTRA, issues like these would be resolved so businesses and traders can benefit from the greater efficiencies, consumers can benefit from enhanced efficiencies in the timely delivery of goods and possibly resulting in a decreased cost of production.

The TTMA President also echoed sentiments that while it is important to have a highly efficient and effective body to effect change, there must also be competent, skilled, knowledgeable and trained personnel to manage the TTRA.

Coosal advised that the retaining of institutional knowledge by some of the key personnel should be considered by the relevant decision-makers.   Relevant capacity building should take place among the existing and new staff members.

However, the TTMA has some concerns.
“The association is fearful if this transitioning is not done optimally, we would revert, in a short period of time, to an agency that is not as effective as it should be to the needs of all parties concerned,” Coosal said.

Thus, she reiterated human capacity building remains critical.

 

MINISTER YOUNG MEETS WITH JINDAL STEEL & POWER INDIA

Monday 27th March, 2023.