GEORGE ALLEYNE Wednesday, February 22 2012

The People’s Partnership Government should explain to the people of Trinidad and Tobago whether its insistence on a salary and/or wage increase ceiling for public sector employees of five percent is based on an independent assessment of the current state of the economy or what it views as the around the corner economic situation, or that it is acting on a position adopted by the International Monetary Fund (IMF).

I make no apology for returning to a situation I view as critical.

Government should explain as well how it arrived at the five-percent cap, that is if it acted on its own, or what arguments were advanced by the IMF. While, admittedly, it is difficult to determine how long the ongoing international financial crisis would last. Nonetheless, did the International Monetary Fund advance that there was the possibility of a lessening of demand for crude oil and natural gas in the international market place and that this would, or is it could, lead to a sudden drop in energy prices and, consequently, income?

What are the indicators, if any, of such a situation developing? The International Monetary Fund, one of the Bretton Woods institutions formed following on World War 11, the other is the International Bank for Reconstruction and Development (IBRD) commonly known as the World Bank, regularly sends teams to Trinidad and Tobago to hold discussions with representative Government officials.

It, in turn, dispatches similar missions to other countries. These missions examine various areas of expenditure and put forward recommendations on what they view as the need, for example, to trim proposed expenditure. The IMF missions may also make recommendations with respect to development of a country’s infrastructure. Is it possible that an IMF team may have recommended a five-percent ceiling on salary and wage increases for reasons advanced earlier.

Perhaps I should point out at this stage that this country is under no obligation to go along with any such recommendation, had it been made.

There is a catch there, however, in that should IMF recommendations be rejected and there is indeed an uncomfortable downturn in the country’s economy, that conditionalities, should Trinidad and Tobago approach the IMF for assistance, might be harsher than otherwise.

Meanwhile, the tacit “competitive advantage devaluation” put into effect by an earlier People’s National Movement (PNM) Administration, one of the most far reaching economic strategies this country has seen, has placed our non-energy exports on a more competitive basis than most other countries. In turn, it has provided Trinidad and Tobago with greater latitude when it came to energy exports. This country’s non-energy exports, for example, are more likely to carve out markets in, say, the United States, Trinidad and Tobago’s largest export market, than any other country in the region. This has better positioned us in the current global economic downturn. But I have strayed.

This country produces oil at a far lower cost than the United States, Canada and the United Kingdom and indeed many countries because of its currency’s relationship to that of the US dollar (to which it is tied). Yet in the US, the United Kingdom and Canada oil workers are paid far higher salaries and wages than do their counterparts in Trinidad and Tobago. If the arguments advanced by the People’s Partnership Government that the nation’s economy cannot support a more than five percent increase to oil workers, how come Exxon after paying out in salaries and wages in, say, the United States, at levels which this Government clearly frowns upon, how then is it able to declare profits running into the billions of dollars?

They must take the country’s salary and wage earners and their families for a bunch of fools. In the meantime, the Government may wish to tell the population how much income it derives from the sale of Atlantic LNG produced liquefied natural gas which is shipped direct to the United States and how much income it gets from, for example, a similar volume of liquefied natural gas shipped to Spain! It would be interesting. Of course, the Government can always claim that such information is confidential, although a Trinidad and Tobago State company has a not insubstantial shareholding in Atlantic LNG.

Meanwhile, why should Government have sought, in essence, when considering the granting of increases, to equate the contribution of an oil worker to the Trinidad and Tobago economy, whether or not his job is of a highly technical nature, with that of, for example, a public service clerk? Or perhaps I should have phrased that differently to avoid possible distortion.

Incidentally, the burden of the increases will be ploughed back into the economy. Still the question remains: Is the People’s Partnership Government acting on the advice of the International Monetary Fund on the five-percent issue?