Business groups, politicians give thumbs down to PM's economic update

Business people and politicians, including Opposition Leader Basdeo Panday, are not satisfied that Prime Minister Patrick Manning dealt with the real issues that affect the Trinidad and Tobago economy in his address to the nation Sunday night. Manning announced a $5.3-billion reduction in anticipated revenue, saying that would force a reduction in spending and cutbacks on some government projects.

Manning was forced to adjust his 2008-09 spending because of the global economic crisis and the declining price of oil.

The budget was based on a price of US$70 a barrel but since September the price has been falling constantly with industry experts now saying it would be well below US$50 a barrel at least until the middle of 2009. The price for oil Tuesday is around US$50 a barrel.

Click her for minute-by-minute update on the price of oil

Manning told the nation based on the best economic advice he would have to scale back some projects because of a revenue shortfall of $5.3 billion. He promised to review the situation periodically but warned that despite the government's best efforts he expects a deficit of about $741 million for the fiscal year.

But Panday is not convinced that Manning has a handle on the matter, suggesting that it's the government's mismanagement, corruption and wastage that has put the nation in a financial bind.

"Manning has grown into one of the finest political con men this country has ever seen. He has addressed everything except that which is most important, and I am referring to the fact that he spoke nothing about corruption, bad administration and wastage", Panday told the Trinidad Express.

One project that Manning put on hold is a hospital in Couva, which is Panday's political heartland.

Panday said if Manning had dealt with the corruption at the Scarborough Hospital, he would not have had hold off on the Couva hospital. Panday also said Manning's priorities are wrong, noting that cutting back on buildings schools is short-sighted.

"Human resource is your most valuable resource and therefore you do not cut back on education if you intend to rebuild the nation later on", the former prime minister told the paper. He also wondered how Manning arrived at his revised shortfall of $5.3 billion.

The Congress of the People (COP) is also not impressed with Manning's economic statement. In a news release, the party slammed the prime minister's judgment.

"Despite the severity of the situation, Mr Manning continues to hoodwink the population with glib assurances that we will not experience a recession even though most of our major trading partners are already in fact in a recession" the party stated.

COP said there is a lack of transparency on how was the government calculated the shortfall shortfall calculated so it is not clear how much it would save from each project and on what basis it determined where to make cutbacks.

The business community is also puzzled about why the government chose to make the cuts where it did and why Manning did not say what projected oil price he used to make his calculations for the budget revision.

The Trinidad and Tobago Chamber of Industry and Commerce is urging the government to provide specific details. And Energy experts are also calling on the government to declare the new price for oil and natural gas on which it has based its $5.3 billion shortfall, noting that good governance demands transparency and transparency demands the disclosure of the budgeted price.

Finance Minister Karen Nunez-Tesheira dodged the question, saying only ""we do not know what may happen. But what we do know, at the current Budget that we set, adjustments must be made and that is the outcome of that exercise."

She rejected the assertion that Manning deliberately avoided mention of the projected price of oil but insisted that "we have been very transparent in the exercise."