From the PMs speech. Adjustments to be made In moving forward there will be areas where we must moderate or redirect our spending in order to manage the present situation by keeping people and country first. Reviews of our PSIP and recurrent expenditure are on-going with the aim of identifying savings of approximately $4.5 billion. And you can be assured that these adjustments are aimed at preserving employment levels and job security. Amongst those areas identified for re-directional spending are: 1. Infrastructure projects for which funding has not yet been confirmed; 2. Lower expenditure on non-critical goods & services, and allocations in selected Ministries by 15 percent 3. Since there is an inverse relationship between price of gas and the subsidy a lower price of gas will result in savings of petroleum subsidy. This is estimated to be $1.4B in expenditure savings. 4. Any additional shortfall will be met from revenues generated as a result of our continued public offering programme. I think the speech should inspire confidence in the business sector with particular emphasis on foreign direct investors. My advice to PM Kamla Persad Bissessar or the Minister Howai would be to give greater detail on the specifics as to what projects will be cut and what Ministries will see a reduction in expenditure. My take on this issue is that this is all about the balance of payments. My suggestions to the PM: I think we need to remove the subsidies and implement limitations on things that drive consumption of imported goods. The fuel subsidy on regular gasoline should be reduced in tranches and local agriculture to be provided even greater support so that we can limit the importation of foreign foodstuffs such as rice, flour and sugar all of which can be produced locally. Incentives for private sector investments in these areas on these activities will not only reduce our budget deficits but also contribute to greater diversification of our economy.
Posted on: Fri, 09 Jan 2015 15:53:15 +0000
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