TRINIDAD Y TOBAGO: Drop fuel subsidies - EntornoInteligente / News day / In a statement issued in Port-of-Spain yesterday on the conclusion of the fund’s week-long regular staff visit to this country for its annual Article 1V consultation with the Government and other stakeholders, IMF mission leader, Elie Canetti, said “the fall in global energy prices provides a unique opportunity to do this.”

The IMF has given this advice to the Government a number of times before and been rebuffed. In June 2013, during another Article 1V Consultation, the IMF team advised the Government to drop “unsustainable” subsidies on the price of fuel. However, on that occasion the Government rejected the advice, bluntly telling the IMF to keep out of this country’s business.

Finance Minister Larry Howai, told journalists at a news conference on August 13, 2013, that while the IMF team had recommended the dropping of fuel subsidies in the consultations which were held in June that year, “we always also like to make sure that the IMF understands that they do not run the country.”

“ We run the country and so we are very careful about our relationship with the IMF,” Howai said. On that occasion, Howai commented, “Trinidad and Tobago is, thank God, one of those countries which is able to maintain a strong degree of independence as far as our discussions with the IMF and other multi-lateral organisations are concerned because we have a strong fiscal position.”

He said, “ Again, we have strong foreign currency reserves as well as our Heritage and Stabilisation Fund (HSF), which continues to grow.” Howai added that although the Government has projected a deficit for the next financial year (2014), he did not think that deficit would be unduly large. “We have been able to manage our overall deficit properly and we’ve been able to grow the economy at the same time. So we have had a couple of things in our favour that don’t put us in a position where we need to be driven by any external agency of any type,” he said.

The Article 1V Consultation, conducted each year, is an obligation for all member countries of the fund. The IMF mission team meets with the Finance Minister; officials in the ministry and other government officials; the Opposition Leader and Opposition officials; political parties; business organisations; trade unions and other civil society groups.

In yesterday’s statement, Canetti said “The recent changes in the energy markets represent a major economic challenge for Trinidad and Tobago, whose exports are heavily linked to these markets.”

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