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Conrad: Not enough being done to create new revenue streams

News day / He said the provision in the fund when it was set up was to allow for withdrawals if there was a shortfall in the budgeted oil price by more than 10% in any given period of up to 60% of the actual revenue shortfall.

Thus, he says the recent withdrawal is in keeping with the guidelines of the fund. He added that the guidelines did not dictate that the Government must specify what it was going to spend the money on, recalling that the 2017 budget has already been presented.

“So it would have been for items which would already have been identified in the budget but without any degree of specifics in terms of how much was going to each project that they were allocating this money to.”According to Dr Conrad, the withdrawal acknowledges that there is a significant shortfall to warrant a drawdown from the fund. However, he said his major concern is what has been done to create new revenue streams and he says he doesn’t see much being done in that regard.

He says, for instance, that while the Government has been talking about diversification to improve revenues from the non-energy sector, there was a ceremonial signing of an energy agreement to bring gas from Venezuela to feed the natural gas facilities in Trinidad.

“So it makes me wonder to what extent they are actually trying to diversify in terms of the revenue streams and if it would become the new normal to draw down from the fund going forward because in the last week I think we saw oil prices take another hit… we were seeing some rallying and an upswing, but it wasn’t sustained.” He said there are more immediate challenges that the country needs to deal with but he is not seeing those adjustments being made just yet. He said the issue of rising unemployment points to uncertainty within the business community “so we’ll probably see a falloff in investment,” which he said was a more immediate concern rather than the focusing on the drawdown from the HSF. He says he is more concerned with the extent of external borrowings and what that money will be used for.

He says the country is still too focused on the energy sector. While he willingly concedes that any contribution from the manufacturing sector to the diversification of the economy would not be able to rival that of the energy sector, he says that doesn’t mean that the manufacturing sector doesn’t have the potential if fully explored to generate substantial revenues. “By no means will it be able to rival the energy sector, but certainly it can move from where it is and we can see improvements in that.”

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