Economist, Dr. Indera Sagewan says Finance Minister, Davendranath Tancoo was left with very little option, as she defended Government’s move to increase some taxes in the past year.
Speaking on Trinidad and Tobago Today, she reflected on some of the harsh fiscal measures taken by the UNC administration in their first year in office, adding that it was a direct result of what the Government inherited.
“The Prime Minister, the Minister of Finance, do not have a money tree. And if you inherit a situation where the pattern of expenditure over income has been one that the former exceeds the latter over a 10-year period, then you have to make some very hard decisions.”
Economist, Dr. Indera Sagewan says certain tax measures taken over the past year must be understood in the context of an economy already in crisis when the administration took office.
“The previous administration would have run a budget with a deficit of close to $10 billion, 5.5% of GDP. Our debt-to-GDP ratio was in the vicinity of about 84%. We had a foreign exchange crisis. You know, employment generation was at an all-time low. And the very Prime Minister himself at the time told us with our dragon, our cuckoo cook.”
Due to this, she said Government spent much of its first year keeping the economy afloat.
“And to a large extent, I would say that this administration has spent at least the first six months in crisis management, trying to get a handle on where things are financially, and then trying to see how best they could put the country on a footing of stability, even before we could talk about growth.”
She said early moves in the energy sector were encouraging, but warned against repeating past dependence.
“That the energy sector, even in its heyday, only employed 3% of the country’s labour force—about 30,000 individuals out of 600,000. Governments, successive Governments over time, have used that money in order to generate employment through a very large public service. The entire state enterprises network, through works or programmes such as OJT, CEPEP, URP. That money has allowed that to happen, but it’s not a sustainable model.”
Ultimately, she said the Government’s performance will be judged on whether stability becomes growth.
“The Prime Minister was very clear that her association with the United States when she came into office has been primarily about securing the country, securing our borders, securing us against the criminal element. But I feel that a lot more needs to be done because crime impacts everything. It impacts whether foreign investors will come in and put their money into the revitalisation plan. It affects whether tourism will see the kind of growth that we want.”
She said 2026 will remain a tight year, with no quick fixes available, warning that rebuilding Trinidad and Tobago will require patience from the entire country.