Speaking at Thursday’s post cabinet press conference, the minister said, “We are concerned, but we must address them on the table and do so in the context of the ability of our own country to move forward and not increase the risk we are likely to face…it is not simple idle talk.”
Dookeran also pointed out that it was ironic that the debate of a compensation package had turned into a five percent debate. He said it was “rather strange” that the five percent which is one component of the package was being used “as a rallying call to shut down the country”.
He said while the Moody’s Report has said Trinidad and Tobago’s economy was stable and expressed confidence with the financial and economic management of the country, it didn’t mean “we put it at risk and take steps to undo the gains made over the last year”.
The minister said the risks might emerge as a result of fiscal excesses and increasing the debt ratios. He said the government was concerned about keeping the levels of interest rate down.
The minister said choices between entitlement and taxation and borrowing was always a decision countries had to make and in the present context, “we are searching for the right equilibrium to maintain stability of finances and redirect expenditure to reignite growth”.
He pointed to the current issue in the United States of America with the prospect of a debt default. Dookeran said the world was looking anxiously at the situation to see if the decisions taken would have a ripple effect.
He said certainly if the US economy goes into “default mode…then that is likely to have ripple effects globally on two counts. It would facilitate a return of recessionary times as the world tries to adjust and second, it could lead eventually to a rising interest rate environment”.
He said the effects may not be immediate but Trinidad and Tobago will be affected, as the cost of borrowing both for the private and public sector will rise.
He said currently this country was benefiting from low interest rates.
He reminded the country of the major hurdles the government had to overcome to get to a stable economy — payments to contractors; payments to depositors claim for equity; the bankers claims to honour commitments of the past and taxpayers claims to pay on time tax returns.