With the third quarter of the fiscal calendar already underway, newly installed Finance Minister Larry Howai is already in budget-planning mode.
Howai, who assumed office after the second People's Partnership Cabinet reshuffle last month, may be new to the world of politics, but he is no stranger to the world of finance.
As the former long-standing chief executive officer of State-owned banking group First Citizens, Howai is accustomed to working in dynamic environments.
He said while he was offered government positions in the past, he decided to take up the mantle now because he was seeing where his finance and investment background could help turn the economy around.
In an interview with the Sunday Express last week, he noted that from his previous positions on the sidelines of the government, he observed what he would have done differently.
"What I would say is that I would have structured things a little bit differently. For example, construction and infrastructure development is something that is badly required in the country," he said.
He said he has already spoken to his colleague Tourism Minister Stephen Cadiz to push tourism development.
"Could we partner with the private sector in developing some of the hotel stock in the country? That causes construction to happen, which will affect my deficit position because now, I have to find money to put into these projects, but down the road, these projects will generate income," he said.
"Okay, so I'm running a deficit this year, but based on revenue projections, in three years' time, I will get back money," he added.
Coming out of the banking sector, Howai is expected to produce a portfolio of investments that will ensure a quicker return in order to buffer the country's revenue dependence on oil and gas.
"From announcement of a bid round to commercialisation, it takes about seven years. In this case, we can have a hotel up and running in three years," he said.
Howai also spent time as the National Gas Company chairman and during his tenure, spent his days learning about the energy sector.
"Yes, I will have a deficit now, but I know how the deficit will be funded in the future," he said.
Howai entered one of the far-reaching ministries of Government at a time when revenue streams were clogged, the world itself is facing financial contraction and the country's financial future is balanced on two consecutive deficit budgets.
But while Howai has admitted to the two former concerns, he accepted the latter as par for the course.
"Clearly, a deficit is not sustainable in the long run, but countries do have deficits and countries are allowed to run deficits for a period of time before they get back into surplus," he said.
Howai said the general sentiment is that the world economic growth is still slowed after the 2008 global economic crisis and individual governments have been running deficits to engender some industrial momentum and stimulate growth.
"But it can't be like that indefinitely, and you have to have a plan for how you are going to reverse that position at some time in the future," he said.
He warned that while he was working on achieving a balanced budget within the next three to four years, he expected to run another deficit budget at the end of this fiscal year.
"I would like to aim for a balanced budget within the next three or four years; it is a gradual process, and I expect that a lot of the investments that we do will hopefully generate some revenue themselves," he said.
Among his plans for immediate revenue is the First Citizens initial public offer (IPO) of shares.
The indigenous bank is expected to make its stock available on the local stock exchange, moving from a State enterprise to a publicly traded one.
Word of that move recently created some friction between Howai and the trade union movement in his previous post at the helm of the bank.
Howai said the transition from private to publicly trading the bank's shares has "hit a snag".
"I need to get a brief on what is happening with that. In addition to the bank, there were eight or nine other companies identified, and I don't know what has happened with any of those. I know for sure that they haven't come on the market," he said.
"So I need to understand where the snag is and how to un-snag it. So that part of it, I am still working on it. It is definitely something I would pay attention to, with a view to making it happen."
Despite that snag, Howai has already earmarked other areas of focus that will ensure a quicker return on investment. Howai already has some plans for boosting the economy and pushing past the current stagnation, including manufacturing and more investment in the downstream energy sector, utilising increased methanol sales to input into the plastics industry.
"I haven't formulated all my plans, but with regard to our local debt-to-GDP (gross domestic product) ratio, we are in a much better place than other countries in the world," he said, adding the country had fiscal space to run another deficit if it had no choice.
"But I would prefer if we do it in a way that would lay the groundwork for us to recover that in the future," he said.
"What is happening is that we have seen a slowdown in spending by both the Government and the private sector, if both are down, the economy would be down. The idea is that we, the Government, could pick up some of the expenditure now in a structured way that would generate returns, and then in the future, the private sector spending would take over once confidence returns," he projected.
That lack of private sector spending has contributed to a higher level of liquidity in the banking sector.
Howai confirmed the higher liquidity will also be addressed by infusing Government investment into sectors of the economy.
"Investment is down, and that's good in a sense because interest rates are low," he said.
Howai said the lower interest rates meant the net present value of infrastructure spending was at the "best it is likely to be for a while".
"So, therefore, I can afford to spend also in infrastructure development because low interest rates increase the net present value of the investment. In looking at it from that perspective, it changes the view on how you are going to spend," he said.
He said the lower interest rate will also help the population understand why he would be spending where he would be spending.
"Communication is vital. I think the people in the country need to understand what is happening at this level. That is one of the key things that I would like to do. I need to engage the entire population on what I want to do," he said.
"To engender confidence in the private sector, they need to know what I am doing."