Time for Austerity

Last night (September 8th), the Trinidad and Tobago High Commission here in London hosted a Gala Dinner and Awards Ceremony as part of our celebrating 50 years of Independence.  Kudos to the High Commission team, who put together a varied and entertaining program in which our multicultural identity was acknowledged.  It was the perfect evening to reflect on the situation in Trinidad and Tobago.  I was also pleased that the keynote address included, among other things, a recognition of the role played by Dr. Eric Williams in the Independence movement.  Awards were given to persons and organizations that were deemed to have positively contributed to Trinidad and Tobago’s promotion and development.  It was truly a good evening.

In terms of those helping to promote Trinidad and Tobago internationally, Nicki Minaj is now a name on everyone’s lips.  Recently, however, my wife drew to my attention some online chatter about her political affiliations.  On Lil Wayne and DJ Drama’s new mixtape, she apparently endorses GOP candidate Mitt Romney.  I found that to be quite interesting because it is so counter to our Trini mentality.  In the US and the UK, their left vs. right-leaning, two main political parties are distinguished.  While in sweet Trinidad and Tobago, the two main political parties are both traditionally left-leaning.  It probably surprises some outsiders that both political parties actually campaign over who will give away more stuff once elected.

I may not necessarily agree with Minaj’s presumed political stance, but it is hard to argue against the need for austerity measures given the present global economic situation.  Most will agree that if President Obama loses November’s election, it would primarily be due to the economy’s state.  Governments are struggling on a month-to-month basis to pay public sector workers in neighboring Caribbean islands.  The international rating agencies are downgrading neighboring islands for their weakening economies.  This year, the specter of a neighboring island lost full control of their own airport.  For those who are unaware, earlier this year, the financial difficulties of the Government of Grenada made international news as the EXIM Bank of Taiwan obtained a judgment against the government of Grenada for outstanding loans in a law suit filed in the United States.  The bottom line was that airlines operating on the Grenada route were asked to pay monies owed to the Grenada Airports Authority directly to the Taiwanese.

So contrast this wider context with the rhetoric expressed by some in the local Labour movement.  Of course, it all makes sense in a society where the notion that salary increases should be in any way tied to actual productivity is considered absurd.  I will probably get my fair share of angry emails for even suggesting this apparently insane concept.  To be clear, I am not speaking about allegations that the negotiation process itself is being disrespected.  Rather, I am disappointed that the Unions’ rhetoric includes demands for increases without a clear connection with actual productivity.

This absence of a connection with productivity has the potential to worsen the already double-digit inflation rate.  Overall, inflation hovers around 10% or 11%, and food price inflation, particularly the primary driver, seems to be consistently over 21%.  In this climate, the government obviously needs to be careful about exacerbating the economic situation, which will definitely cost them the next election.
US Tax Singapore

Moving away from wage demands, it comes as no surprise that downsizing GATE is rumored to be among the coming cuts.  Here in England, I was quite disappointed when the new coalition government eliminated most tertiary education subsidies and actually raised the fees payable.  With 3 sons, should they decide to attend University here, it would not be a cheap process for us.  But given the worsening economic situation, I do not believe that the government here had much of choice, and for the most part, it is accepted that there must be sacrifices.
American Tax Singapore

My theory is that most reasonable people have no problems with any government cutting spending.  People have a problem with that they perceive that they carry an unfair share of the sacrifice.  No one wants to feel cheated.  So my suspicion is that like in the U.S., where the Occupy Movement promotes the idea of greater equality, in Trinidad, a large part of the frustration is the perception that there is a business and political elite that appears to be unaffected by austerity cuts and the double-digit inflation rate.

My name is Derren Joseph, and despite our current challenges, I continue to have the audacity of hope that we will all enjoy a brighter tomorrow.

Read more on derrenjoseph.blogspot.com.   

Note: The blog that used to be here is now at https://www.mooresrowland.tax/.

Table of Contents: Time for Austerity

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