Prime Minister Rowley Chairs First Road Map To Recovery Meeting – April 20, 2020

Prime Minister Dr the Hon. Keith Rowley Remarks
Conceptual Framework for the Formulation of the Road Map for Trinidad and Tobago Post COVID-19 Pandemic

April 20, 2020

I want, on behalf of all the citizens of Trinidad and Tobago, to sincerely thank each and every one of you for answering this call to national service in this our moment of great uncertainty and trepidation. While it is true that we would have liked to have all the views of all the citizens here like the Roman forum it is not logistically feasible but the consultative process where you are free to co-opt as you deem necessary will permit as much inputs as the circumstances require.

The world is facing an unprecedented human crisis that is unleashing dramatic economic and societal disruptions. In this crisis, no country has been spared the effects. Since the reported outbreak in Wuhan, China on December 30, 2019, the novel coronavirus has become a rampant and destructive force affecting approximately 2.3 million people and causing over 158,000 deaths across 185 countries.

The world that we have become accustomed to and life as we know it has changed and will quite possibly never return. The way people live, work, trade, recreate and learn and the way businesses and societies function have all experienced an upheaval of the norm in a relatively short space of time. The disruption which we are experiencing also brings with it the opportunity to create new and more resilient economies and societies that potentially have a better chance at achieving sustainable growth and development.

According to the World Bank, in its Semi-Annual Report on the Latin America and Caribbean Region, Trinidad and Tobago was more prepared for the crisis than a lot of its Caribbean counterparts when assessed against global benchmarks in four (4) areas – fiscal, monetary, financial and external preparedness.

Even so, Trinidad and Tobago must now plan for its post peak COVID-19 future within the confines of the ‘new normal’, at least until such time that a vaccine is developed and tested, which could take between 12-18 months. The new normal will feature, amongst other things, the continued need for physical distancing and stringent public health requirements and will set new protocols for how we conduct our lives, operate our businesses and deliver services to our customers, in both the public and private sectors. The new normal will, in part, be dictated by global and regional developments and scientific progress but it must also be prescribed by the country’s Chief Medical Officer and other public health experts.

An important first step in developing the Recovery Road Map must be to clearly identify and analyse the constraints that will continue to exist for some time. What are the constraints that will underpin any recovery effort, as a high level of uncertainty persists about the virus and what we should be doing next?

The Road Map must delineate objectives and targets to be achieved and actions to be taken over the immediate-short term and the medium-long term. These objectives and targets must be established in the context of a defined vision of the new economy and new society in the post COVID-19 period. The Road Map must also define the elements of an effective enabling environment necessary in the immediate-short term and the medium-long term.

A critical requirement of the planning for the recovery period is the development of a framework to guide the re-opening of the economy in order to reboot economic and social activities. A readiness assessment, guided by the CMO and other health experts, will be necessary to inform the opening of non-essential businesses and institutions.

Immediate-Short term: Recovery – Securing the Economy and the Populace

In the immediate-short term, the emphasis must be on recovery by first and foremost keeping the country afloat, pursuing quick wins for jumpstarting economic activity in key sectors, and stemming any further widening of income disparity through employment preservation, and income and social support to vulnerable groups. There is a continuing need to prioritize currently limited resources to protect economically vulnerable groups and support those sectors related to people’s livelihoods. Furthermore, there must be sufficient food and daily necessities available for the population. Alleviating the negative impact on livelihoods and the economy must be given as much attention as stopping the virus so as to prevent severe damage to economic and social systems over the medium term.

At the same time, the populace must be encouraged to think what they must do differently once the Stay at Home order is relaxed given that health and behavioural protocols will most likely be a continued requirement to prevent further transmission.

The period of recovery must be driven by actions of Government, the Private Sector, Civil Society even at the individual and personal level.

The Government sector must become a more agile partner, removing unnecessary bureaucracy and enhancing its execution capability to directly stimulate and enable development. What do we need to do to remove/minimise Government bureaucracy, enhance efficiencies in the execution of policies and projects and deliver better services? Government must continue to support social systems, provide the stimulus for economic rebooting and facilitate the recovery efforts of the private sector.

It would be important to analyse the impact of Government spending in response to the COVID-19 pandemic and to re-examine the efficacy of the current Development programme in meeting the objectives for the recovery period.

The work must be done against the Baseline Report prepared by Professor Theodore in which he anticipates the size and nature of Government’s support and stimulus. The adequacy of the intervention, together with where and how this money is to be sourced and spent, are critical questions.

In terms of the Private Sector, the emphasis must be on removing constraints to private investment and initiatives that are integral to the achievement of the objectives of the Road Map. The impact of the pandemic on specific sectors and mechanisms to facilitate the resurgence of economic activity in the energy, manufacturing, agriculture, services, banking and insurance, retail and distribution and construction and development sectors will need to be explored.

Conceptually, civil society can provide an effective conduit for the implementation of many Government-funded social programmes. Non-Governmental organisations can enhance the Government’s execution capability and support the objective of keeping the country afloat in the recovery period. The readiness and health of this sector to be deployed must be evaluated.

Medium-Long Term: Remodelling, Retooling and Transforming
In view of the lessons learnt from COVID-19, the deficiencies and structural rigidities in the economy must be examined as the basis for remodelling and creating a new economy. At this juncture, we also have the opportunity to explore new sectors/industries that hitherto have not been explored but which we may want to venture into. How do we build resilience to deal with future threats? How relevant is the National Development Strategy (Vision 2030) now, with the advent of COVID-19? How should Vision 2030 be tweaked? What are the enhancements necessary to make Vision 2030 more actionable?

As a small island economy facing external vulnerabilities, can we continue having such high dependence on food imports? What are the new industries that we should be promoting? What is the role of technology in the new economy and society? How should we remodel our processes for prioritising and executing development projects?

In light of the prevailing oil shocks and the industry’s uncertain future, where, how and with what should we diversify our economy?

Developing an Effective Enabling Environment
It is said that culture eats strategy for lunch in the same way any economic road map developed without the creation of an enabling environment to facilitate the execution of that road map will have challenges. As such, the Road Map must place considerable focus on the requirements for establishing an effective enabling environment that supports the achievement of the established objectives and targets. The role of labour and tripartite cooperation must be fully explored. What are the fundamental elements of this enabling environment that are critical success factors for the recovery and the medium-long term transformation? Furthermore, are we comfortable with the value system that exists in the country? What are our core values and are they consistent with the new economy and society that we want to create? What type of behaviours do we want to promote? How do we create a more progressive value system that will advance our short-long term objectives? What institutions do we need to put in place to strengthen and support our objectives? What are the legislative requirements? How do we create the environment for public-private partnerships (PPPs) and utilise that mechanism in the development of the country? How do we more confidently move from commission agents living off attractive mark-ups to producers of our own products for our consumption and export. What policies and structures do we need to put in place now to deal with future epidemics/pandemics and economic market shocks?

Inclusiveness, Collaboration and Partnerships
COVID-19 has unmasked the inequalities that exist in the economy and at the wider societal level. But, it has also demonstrated that all segments of the society are at risk. The Road Map must, therefore, be based on collective action and strong collaboration among all sectors of the economy and all segments of the society.

Programming of Resources
The Road Map will require a programming exercise to be undertaken to ensure that execution is feasible and takes place within the context of resource availability and execution capability. It is not sufficient or desired to hear eloquent presentations on how bad the problem is without solutions. It is because we know how seriously affected or threatened we are which is why we are here. Not to try and get us back to what we had or where we were in December 2019 but to chart a new course maybe from December 2020.

Current State Analysis, Modelling and Projections
The current state of the economy and the projections for the near and medium terms will provide the benchmarks for monitoring and evaluating implementation progress.

Temptation to a permanent welfare state leading to bankruptcy and persistent poverty.
There are cautions to be observed in this not so easy task.
Throwing borrowed billions of dollars into unproductive subsidies, increased social welfare, increased pensions and massive grants is an unsustainable approach which will further wreck the economy and damage any chance we have of balancing the national budget in the foreseeable future. This will destroy the progress we have made in expenditure restraint, domestic production and income generation over the last 4 years. In particular any suggestions that we should increase existing welfare which already cost us almost $4 billion a year, and that we increase contributory pensions, when the NIS is already in deficit and heading for insolvency seriously limit the use of these options if the goal is not only survival but sustainability as well. Will such experiment guarantee the stimulation of the economy or will it just perpetuate and entrench a huge unfunded, unproductive liability and lead us into the valley of unsustainable debt, create hyperinflation and send our credit rating to permanent junk status?
It is the view of some others that while such a policy approach may yield dividends in advanced economies with a broad-based diversified production structure, it is likely to have different, even disastrous results, if adopted in the Trinidad and Tobago economy. Our experience has shown, time and again, that efforts to spur growth through massive increases in government spending could result in wasted resources, domestic inflationary pressures and/or an unwanted expansion in imports without significant domestic output.
The solution to post-Covid-19 must lie in rebuilding our productive sector, creating employment, boosting productivity, manufacturing, trade and the services sector, improving revenue collection and reducing unsustainable expenditure. The solution cannot be an unsustainable welfare state.
These are the challenges that have brought us here to tackle and untangle these options so that our choices can be determined and recommended for the road ahead.
It is to be expected that we may not all agree on everything but we would be much better off if, together, we examine all our possibilities, our potential and pitfalls and in the end be guided by a strong sense of patriotism and faith in our ability to find the best options whatever they might be.