Can Trinidad and Tobago’s new government turn things around for the Twin Island Republic?
Trinidad and Tobago recently held their general elections and the Opposition United National Congress won, which means Kamla Persad-Bissessar is back as PM.
Kamla was PM from 2010 to 2015, but her party lost the last two elections to the People's National Movement (PNM).
Now Trinidad and Tobago has some really big issues to deal with and Persad-Bissessar says she’s tackling them head on.
On top of the country’s forex crisis, which we’ve talked about before, the PM said that Trinidad's projected deficit for 2025 is some 11 billion TT dollars. That’s about 257 million US dollars! The deficit for May alone is almost four point five billion TT - over a hundred million US. That means they’re spending way more than they earn.
If you’re thinking well, doesn’t Trinidad have oil? Economist Marla Dukharan explained that to us on Taking Stock.
What's causing Trinidad's Forex crisis?
So the Government isn’t earning as much as it used to from oil. But they still have big bills to pay.
Well, the PM is starting by tightening the purse strings. She’s already paused all advertising on mainstream and social media for government ministries and State enterprises.
She’s also ordered a review of State enterprises and government rentals, and temporarily stopped the purchase of all vehicles across all ministries and State enterprises, except for emergency response vehicles.
According to the PM, over the past couple of years, ministries and State enterprises have been buying multi-million dollar vehicles, which are unnecessary. Trinidad’s exchange rate is about six to one US, so a million dollar vehicle is nearly 150-thousand USD.
She is also redirecting some state-funded security to the anti-crime fight and cutting off state-funded housing, even for her own team.
So lots of cost cutting measures to try and “plug” the deficit and in turn ease some pressure on the dollar. But will it be enough? Let me know in the comments.
And that’s the bottom line.
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