My favourite economist, mi bredren Prof Vanus James, had me in school the other day. I was asking him by Skype for his views on Budget 2013 as I had not been able to watch his TV interview on the budget with Andy Johnson or hear his radio interview on the same topic with Ken Lewis.
He put me to sit down and explained, among many things, that i) the budget was not evidence-based but that the government had the relevant data it could have used, and ii) from the evidence available, Tobago can mind itself. He used mostly data that was in the public domain (sourced from the CSO) and therefore in the government's possession.
I had looked at the budget and made a number of comments on it, including a written commentary (see last week's column "Is this finance minister serious?") claiming that Finance Minister Howai could not be serious for giving us a budget that saw a need to improve the non-energy share of GDP to 66 per cent but without quantifying the estimated contribution of the relevant subsectors.
But I had not remotely approached the perspective that Vanus revealed. (I suppose that's why he is the economist and I the educator and linguist!)
So Vanus called me to school and presented on the two theses above. I can only deal with one of them in this column—the second.
Vanus sent me an Excel table, which I opened and we referred to in the discussion. The table was about the GDP of Tobago in respect of the years 2010 and 2011 at market, that is, current prices. It was compiled from CSO data and three of its columns were titled "Industry", "2010", and "2011", respectively.
Now, Vanus is a fella who believes in discovery learning and problem solving, but time was at a premium so he settled for demonstration, which is not a bad technique in itself.
"Go to D11. You see that the contribution of the petroleum industry (or the energy sector) in 2011 is 31.5 per cent and the 2010 slot is empty?"
I saw that he was right.
"Now, look at the categories under petroleum industry. What you notice?" I studied the categories for a while and then observed that i) there were six of them, including "distribution" and "exploration and production", ii) that distribution alone accounted for the 31.5 per cent, and iii) the other five, notably exploration and production were labelled "NA" (not applicable, right?).
"So what you think about that?" he prodded. I paused a moment, and he jumped in with his own thoughts: "How is it that exploration and production going on apace in clearly Tobago waters (except we willing to say that Trinidad surrounding Tobago!) and no share for it in the estimates?"
And I chimed in, "What a ting! Of all the categories, there is only data for distribution, which has a 31.5 per cent share of Tobago GDP, which amounts to $2.580.1 billion in 2011. For distribution alone! Suppose we had the figures for the other categories?!"
Vanus asked me to take a look at the figures for the non-petroleum industry. Agriculture contributed 28 per cent in 2010 and 32.6 in 2011 ($$ not given). Manufacturing contributed 31.5 and 44.1, respectively. Services contributed $2.162.9 billion and $2.503.4 billion, respectively (no % given), and, critically, the contribution for "electricity and water" is not given (How can that be when these services are mostly government-owned?).
When you add up what we have (remember, there are absent figures!), the GDP for 2011 is $2.611.6 billion.
"What does that mean?" Vanus asked. I hesitated, uncertain about what he was getting at. "Compare the given GDP to this year's allocation for Tobago of $2.356 billion," he suggested. What a teacher!
Gosh! The Finance Minister was saying that it would take $2.356 billion to mind Tobago in 2013 but the island was underanalysed as contributing $2.611.6 billion in 2011! $255.6 million in excess, two years ago, of the budgeted upkeep for 2013!
"And we en factor in the contribution of taxes, which, nationally, is about 30 per cent of GDP… . So, we cyar mind weself?"
If you want evidence-based argument, read the column again.
—Winford James is a UWI
lecturer and political analyst