Budget 2013 has as its theme 'Stimulating Growth, Generating Prosperity', and it sets out on pages 25-30 'Initiatives for Diversifying the Economy' to 'increase the non-energy share of GDP to 66.0 per cent over the next five years', and so achieve this prosperity. The priority non-energy sectors identified are financial services, tourism, information and communication technology, downstream energy industries, agriculture, creative arts, and 'the maritime sectors' — seven of them. So how does the government plan to make these areas prosperous?
Let's choose one area, say financial services, and see what they have to say; it's on page 27.
They are going to develop this sector in two ways. First, they are going to create a subsector — the financial institution support services industry — within the financial services sector, and this industry will launch the International Financial Centre (IFC), which will offer 'shared service centres' to national, regional, and international financial institutions. And secondly, they are going to introduce supportive legislation with tax incentives 'early in the new year', with their activities 'encapsulated in a strong legislative framework' that will be laid during 2013. The latter will include 'a new Securities Act, a new Insurance Act, and the Credit Union Act as well as legislation to effect electronic payments in the Government Services'.
With these two 'initiatives', they expect the sector to 'generate substantial benefits': i) absorption of graduates from tertiary educational institutions; ii) provision over the next five years of '3,000 good quality jobs for knowledge workers; iii) on a multiplier effect basis, 6,000-12,000 total jobs'. The impact on GDP will be 'immediate and positive'.
Finance Minister Howai tells us that the non-energy share of GDP stands at $30.6 billion, but that it needs to be increased to 66 per cent of GDP. I expected him, therefore, to quantify the result in dollars and cents — to tell us how much of that sum he estimates the financial sector services will bring in. But he doesn't; he's content to speak in terms of 'substantial benefits', expressed in job creation terms.
How serious can he be? I ask.
What about the other six priority areas? Does he quantify their expected contribution to GDP?
Tourism: nope. We hear about the Ministry of Tourism and the THA 'increasing' their marketing and promotion programmes. We hear about the establishment of Trinidad and Tobago Business Development Ltd to administer the Tobago Development Fund, which will have an initial capital of $100 million and annual allocations of $50 million in 2013 and 2014. But no, no quantification of the contribution of tourism to GDP in dollars and cents.
How serious can he be?
Information and Communication Technology: Yes? Howai promises the building of a competitive ICT industry based on 'our strong tertiary education network, our sophisticated and competitive telecommunications infrastructure, our cheap and reliable electricity supply and our well-educated and capable work force'. But guess what? He provides an estimate of the contribution of this initiative to GDP — 6.7 per cent — over the next five years, but he tells us that it is the World Bank, not he, who did the estimating.
Shaking my head.
Downstream energy industries (or 'Gasoline Vehicles Conversion to CNG): A big nope. Howai announces that the Government has developed 'a comprehensive business plan which will invest $1.5 billion in converting gasoline vehicles to compressed natural gas — Really? How's that scientifically possible? — over a five-year period initially, but there's nary a word on how the investment will translate into a contribution to GDP and in what amounts.
Instead, he increases the price of premium gasoline from $4 to $5.75 per litre and hints at other increases — of the price of super unleaded? — in 2013.
Is he really serious about increasing the prosperity of the non-energy sector?
You get the picture? It's more of the same for agriculture, creative arts, and the maritime sectors. Announcement of plans that are opaque as to their contribution to GDP, and yet the minister sets out to show us how these subsectors will be managed to grow the non-energy share of GDP.
The offering of the Minister of Finance on this matter seems to be quite lazy and insincere. But I may be wrong: the estimates could very well come in the contributions of other ministers… .