Covid has Shrunk Economy by 10 Percent

Exclusive Interview with PM Rowley Part 2 of 2

Today, we conclude a two-part Guardian Media exclusive interview by Ira Mathur with Prime Minister Dr Keith Rowley. In it, he addresses Venezuelan migrants, the impact of COVID-19, the Petrotrin deal and other issues.

Q: The United Nations claims there are between 40-60,000 Venezuelan refugees here. Are Venezuelan migrants a burden or an asset?

A: Those who call out the inflated numbers of 40-60,000 are purveyors of propaganda. We acknowledge just over 16,000 registered Venezuelans. The others are illegal immigrants. We conducted the registration of Venezuelan refugees in full public view, and there were no lines when the registration ended.

To those who didn’t register, I want to send a strong message: ‘You don’t want the authorities to know who you are and that you are here, and we don’t want you here. When you come illegally, you are opening the country to the criminal element firearms, flesh trade every manner of criminal activity.’

If you come in illegally, we are going to stop you on the ocean, stop you on the border, find you in the country, apprehend you, and we are going to repatriate you.’

Those who are here legally are not a burden as the State does not support them. Many are employed and quite productive.

Q: Are you worried about what could happen to us if Venezuelan President Nicolas Maduro is toppled?

A: Nothing. Maduro doesn’t run Trinidad and Tobago, he is Venezuela’s president.

We are a sovereign state and required to make our way in the world regardless of whatever happens in any other country.

We are a neighbour of Venezuela. And it doesn’t matter who is running Venezuela. It is our nearest neighbour; seven miles from here with 33 million people. It doesn’t matter who is in charge down there when it comes to the interest of T&T citizens, I pick up the phone, and I talk to that person.

The Government of T&T is elected to protect the interests of T&T first, and that is what we will continue to do.

Q: How has COVID-19 affected our economy? Many gas-based industries in Pt Lisas appear to have mothballed their plants.

A: COVID has hit us hard, shrinking our economy by 10 per cent, even as we continue to support our hardest-hit citizens at a big cost. As an oil and gas producer, our production and sale of oil has dropped globally. COVID-19 came at a time when our oil and gas prices were already softening and had the effect of further reducing consumption of methanol, urea ammonia, LNG, oil and gas. It was a perfect storm. Some plants in Point Lisas have shut down. Just today I was advised by BP Trinidad they are reducing their staff by 25%. All gas and oil markets are experiencing the same thing due to reduced demand. Thousands of planes are on the ground, fewer cars are moving about.

Q: With falling energy prices now, will you raise revenue for the national budget?

A: The national budget must be presented in the serious scenario of managing an economy downwards without collapsing it.

Our people must pay attention to the realities of our reduced circumstances.

We are staving off economic collapse since the country had become accustomed to spending and living off a budget of 63 billion dollars. Recently, government revenues dropped to 43 billion.

We don’t have a strong enough revenue stream to sustain the servicing of the country. We’ve used a lot of debt and short term borrowings to keep it on an even keel.

Still, the energy sector remains our best bet. We have been strengthening our revenue stream against the odds, including revising contracts which will boost revenue, improving production volumes and providing quality business in the energy sector.

Q: Are you on track with the property tax?

A: Yes. The court has given us parameters to meet; we will meet those, collect tax that will not be onerous given the large number of people paying it, and, as part of local government reform, make the funds available to local government bodies to service their communities and the environs of peoples property will be looked after. We will also vigorously minimise tax evasion in general.

Q: Are we going to dip into the Heritage & Stabilisation Fund?

A: That’s what savings are for, a rainy day, and this is a storm. We have not touched the capital yet, which remains the same as five years back.

Q: The private sector is complaining about the shortage of foreign exchange.

A: To battle COVID economic contraction, the US government printed two trillion dollars and gave it to its people. They don’t have to make the money. They just print it. But for us, every US dollars we spend, we must earn it. So the demand for more FX is just that, a demand.

Take medicine. We must pay for all the drugs in FX. We can’t buy them in TT dollars. We pay for the food in FX. The question is how much of what we import in a free market do we really need?

WASA’s water is as good or better as any in the world, but we buy water. It’s an issue of priorities.

Our ability to earn significant FX through agriculture and other means is limited. What we can do is reduce our FX expenditure by producing and consuming as much local food as we can. We have been brought up eating other people’s food. We need to prioritise our a) use of FX and b) earn more.

Q: You speak of earning FX but our business community has long complained of red tape. We rank exceptionally low in doing business with the world.

A: We are 105 in 190. I agree it is not a good ranking. We can and will do better. We are moving to digitise the country’s systems in all areas of governance and that will allow us to do better business. This requires changing mindsets and dealing with significant pushback.

Also, island developing states like us must fight daily for our existence, given that we are subject to the vagaries of large countries.

Take Cuba. If Cuba prospers, we prosper. We opened an office there. One American president opens to Cuba and we do well, and another closes it, and we don’t. In the market place we operate, nobody is doing us any favours.

Q: Will you use agriculture to create food security, diversify and spend less FX?

A: We are short of farmers in the country and there’s a lot of fertile unfarmed agricultural land. In our five-year Road Map to Recovery, we plan to invest heavily in agricultural expansion with incentives for new farmers.

I have mandated the Minister of Youth Development and National Services Fitzgerald Hinds to develop a pool of farmers genuinely interested in a career in farming who will be supported and sustained to increase agricultural production, even as we continue to support our current farmers.

Q: What incentives are you giving people in agriculture?

A: We have six pages of incentives for farmers. Agriculture is tax-free. What greater incentive you want? The question is, are our young people willing to go from whiling away the day to sweating in the fields?

Q: Will you have to devalue?

A: Not yet. But if there is further deterioration we may. You alluded to poverty, and the human condition and a devaluation poses a threat to this.

Q: What is the status of the sale of Petrotrin? How soon will it be sold and is the sale still on track to the Patriotic Technologies company (OWTU)?

A: Patriotic made us the best offer and was selected. We are currently working out contractual arrangements on which the outcome will depend. They are close, but it’s not finalised.

Last August, a thorough review of Petrotrin revealed an 850 million US dollar debt. We had to either pay the debt or refinance it and couldn’t do so without severe financial consequences to the Treasury. Restructuring allowed us to create the Heritage Petroleum Company Ltd., which is servicing that debt without a government guarantee, paying the taxes to the country and making a profit of over a billion dollars. The downside was we had to close the refinery. The upside to that was we saved the national financial economy.

Q: A union traditionally focusses on employees’ interests rather than profitability. Are you confident a trade union can run Petrotrin?

A: That is a question for the trade union. Are they prepared to make business decisions, because what they put to government is not a trade union proposal but a billion-dollar business proposal with serious financial and other implications.

It’s a massive undertaking, and the government is not going to take it lightly – the same way we didn’t close the refinery lightly. Settling on the buyer is a serious decision.

Q: Any possibility you may pull back from the Petrotrin/OWTU deal?

A: If we are not happy and if it turns out to be something we can’t accept then we won’t. There are no two ways about it.

We are hoping we can come to a decision all parties can agree on and conclude the contractual arrangement. I’m not directly involved but know that it’s a vast legal undertaking on behalf of the State. Once you sign that document, it’s a transfer of a significant asset, a serious legal undertaking and must be to the satisfaction of all parties.

Q: Let’s discuss WASA. (a) The Regulated Industries Commission (RIC) reported that 46.5 per cent of the population don’t get a 24/7 supply of pipe-borne water; (b) The Caribbean Development Bank has estimated that WASA is overstaffed by approximately 4,000 people and subsidised by $1.8 bn annually. Any plans to address this?

A: We are not satisfied with the availability of water to the population and secondly, cannot rely on the considerable subsidy that is becoming less available. The Cabinet is awaiting a comprehensive review of WASA from the Minister of Works, after which we will act to restructure WASA while aiming to minimise the loss of jobs, maximise productivity, reduce the subsidy and provide an adequate water supply to many more than 46 per cent of the population.

Q: The slow courts and number of young men languishing in remand in our jails have been a perennial issue in T&T. How do you restore faith in the justice system in T&T?

A: Legalising marijuana vastly reduced the numbers of those who formerly would have been incarcerated. Similarly, by removing motor vehicle cases from courts with our current point system, we have reduced court matters by over 100,000. We increased the number of courts from 32 to 64, hired more judges and have begun to use technology so that court hearings can be done virtually and from the prisons.

Regarding our chronic crime issue, we started by making our police the best possible responder to crime and to serve us.

We got the regulations changed in parliament, went to court, the UNC fought it in the court, we won it in the court, to appoint a CoP and today there is a COP in charge of the police. And whatever difficulties we have now it is far better than what it was.

Q: What’s slowing down the public service?

A: Post-independence systems like the service commissions that appoint civil servants are today behemoths entirely at variance with the country’s best interests. Not only is the Service Commission bad business with its obsolescence and antiquated systems but it feeds down to managers in public service creating a collective lethargy.

Service Commissions are enshrined in our Constitution so can’t adjust meaningfully without a certain amount of parliamentary seats.

Q: Can you not work with the Opposition with some of these issues in the public’s interest?

A: Tell me one thing they have supported for the benefit of the country? When we took Clico to court, they called it a Ponzi scheme. When we were doing our best to keep our citizens safe from a deadly virus, they called for open borders, and when we encouraged people to wear masks, they said it was bullying.

Dr Fuad Khan was a Minister of Health in the UNC government. He told people that we had no fixed mask code here, citing the UK when the UK was breaking records with the worst COVID management with almost 50,000 deaths and had stopped recording deaths in old people’s homes. So no, I don’t expect Opposition support for the benefit of the country.

Q: What are you doing for the poorest and most vulnerable in T&T.

A: I am sitting here behind this desk as Prime Minister because somebody gave me the opportunity to go to school, get an education and find meaningful work. If you don’t have a road to get to agricultural land, where is the opportunity to use the land to farm? If you don’t have teachers getting to school and teaching children, what is the opportunity for them to get educated and compete for the jobs?

It’s about providing opportunities to all. The statistics show some of the most impoverished people live around Sangre Grande, La Brea, Point Fortin, North-eastern corner. We are taking the opportunity to remote, and neglected communities through infrastructure, primarily roads, to connect and integrate them to the rest in the country and economy though agriculture, industry or tourism. Our new Minister of Education is mandated to link with all stakeholders for a transformation of our education system so we produce people who can fulfil their full potential as citizens? We can provide support with free health care, free education and financial aid but no social worker can replace the guiding hand of parents.

Q: What would you tell citizens going through this pandemic and economic difficulty?

A: Things are not falling apart. Bad times don’t last forever. Don’t listen to the negative voices. We are going through a difficult period but it should not get us down. Stop beating up on yourself and making as if you are living in a terrible environment. Compared to the rest of the world we are doing reasonably well.

Are we facing difficulties? Yes. Do we have difficult decisions to make, bitter medicine to swallow? Yes. We can survive the difficulties we face now because our parents survived and thrived through worse to allow us a better life than they had.

It’s a call for us to be even better because the mother of invention is necessity.

We will come through these days if we all decide each day to be our best selves for the benefit not just of ourselves, but others.

Q: Rate your performance as PM.

A: I must ask my wife. She thinks I am crazy (laughs). Seriously, I will leave that to the nation.