PORT OF SPAIN – The party that forms the next government after this year’s general election will have a difficult task in managing the country’s financial crisis, according the Movement for Social Justice (MSJ) leader David Abdulah.
Responding to Trinidad &Tobago’s bond and issuer ratings demotion by Moody’s Investors Services (MIS) yesterday, Abdulah said this was a result of government’s useless spending on the Debe to Mon Desir segment of the Solomon Hochoy Highway Extension Project, the failed TT$400 million Life Sport Programme and $408 million on legal briefs.
At the party’s yesterday’s Press conference at St Joseph Village, San Fernando, Abdulah said Moody’s had noted Trinidad’s successive fiscal deficits, which he said was a result of falling revenues in oil and gas and the current and previous governments’ failure to diversify the economy.
He said while falling oil and gas prices significantly had affected Trinidad’s revenue, government continued to rake up future expenses by securing loans for the construction of the Couva Children’s Hospital, the University of the West Indies’ Faculty of Law, National Cycling Velodrome, National Tennis Complex and other
Moody’s rating has grave consequences for investors’ confidence in Trinidad, Abdulah said, pointing out if the next government had to approach an international lending agency, loans would be granted at high rates. This in turn, he added, would increase the countrys’ debt service ratio, making the People’s Partnership’s promises of a San Fernando to Mayaro highway and a causeway from Port-of-Spain to Chaguaramas unlikely.
“One could debate some of the analyses, but the fact is they have downgraded us in terms of our credit rating from stable to negative . . . ,” Abdulah said.
“The people who you are approaching to borrow from will say there is a negative credit rating against you and therefore there is higher risk/low arrangement that will have to be entered into. People who lend under higher risk will obviously put more stringent conditions in place in order to secure their loan, which will include higher interest rates.”
With initial public offerings expected for Phoenix Park Gas Processors shares and the sale of CL Financial assets, Abdulah said the MSJ was against that option as those companies could regain profitability in the coming years.
He said there seemed to be a recolonization of the country’s energy sector with Government seeking to sell out the Trinidad & Tobago’s revenue assets to multinational companies.