Finance Minister Colm Imbert wanted to make it “crystal clear” yesterday the Government intended to access a US$300 million loan from the Andean Development Corporation “at some appropriate time within this fiscal year”.
The fiscal year ends on September 30, 2017.
Speaking on the bill to provide for the membership of Trinidad and Tobago in the corporation, Imbert said in the 2017 budget, the Government had indicated “very clearly that its expenditure was budgeted at $52 billion but its revenue, including one-off sources of revenue, was projected at $46 billion, less a projected deficit of $6 billion, part of which was being financed by the withdrawal of (US$251 million) TT$1.7 billion from the Heritage and Stabilisation Fund.
He said that leaves another $3 billion of financing for the budget which has to be realised by way of borrowings.
Imbert said one of the benefits of accessing funding in foreign currency was that the loan would immediately assist with the country’s foreign reserves position.
He said the US$251 million from the HSF plus the US$300 million which the Government intends to borrow from the corporation would boost the country’s foreign reserves by US$551 million at a time when there are heavy demands on the country’s foreign exchange.
“Of course you have to pay it back, but you pay it back over a long period of time, over ten years or so on and as your sources of foreign exchange improve, it makes it much easier to manage these foreign borrowings,” he said.
Imbert said the corporation provides support for infrastructural works, including technical assistance and financial advice to governments for project execution, giving priority to areas of roads, energy, telecommunications and river management. It also supports private sector development.
He said Trinidad and Tobago had contributed greatly to the resources of the Andean Development Corporation, having put in $2 billion, but it was unable to receive any benefits from those contributions. He said the passage of the bill would be the final step in attaining full membership and access to all the benefits that accompany full membership.
However, Opposition Senator Wade Mark slammed the Government, saying it was on a “borrowing spree”. “Their lips are watering. They want to get their hands on that US$300 million,” he said.
“The minister said he is hungry (for this money). Like Max Senhouse, he needs the money,” Mark said.
Mark recalled when Imbert delivered his first budget, the debt-to-GDP ratio was 46 per cent and Imbert promised not to have a debt-to-GDP ratio of over 65 per cent. Mark said, according to the Central Bank’s last report, the total public debt was now $120 billion. He said the debt-to-GDP ratio was approaching 77 per cent.
He said while Imbert chastised the People’s Partnership for a large overdraft with the Central Bank, the Central Bank report showed this Government had borrowed on the overdraft facility with the bank to the tune of $1 billion.
“This Government will crash the economy and will take us into the hands of the (IMF) dragon,” Mark said. He said this was a NATO government — “No action, talk only.”
Mark said the economy contracted nine per cent in the first three quarters of 2016, which was the worst contraction in 33 years.