Trade, Industry, Investments and Communication Minister Vasant Bharath says the three red flags raised by the International Monetary Fund (IMF) in its latest report on T&T were already being addressed by the Government. Bharath said the issue of diversifying the economy was “not something that was not known to the Government,” adding that the diversification process, which the IMF raised, had already begun.
“We have already started the diversification process into the areas of financial services, ICT, tourism, the creative industries sector, agro-processing, downstream industry and the maritime sector,” he said. “We are well on our way to the diversification of the economy and utilisation of revenue streams from those services.” In its report, dated July 9, the IMF said a “greater degree of flexibility is needed in the foreign exchange system to avoid further shortages.”
The minister, however, said he did not see any problem there as the Central bank will do what is required to ensure the matter was addressed. The other area of concern raised by the IMF was public service reform. Bharath said the Public Administration Ministry was already looking at that matter. But admitting that there was still a lot of work to be done, Bharath said, “The Government ought to be congratulated for managing the economy in the manner in which it has over the last four years.”
Asked to respond to the IMF’s suggestion that “time is drawing near for policy tightening,” Bharath said that related to the situation where there was almost full employment and a significant amount of credit available. According to Bharath, this can cause runaway inflation if it was not managed properly. “So they are looking at monetary policy to look at tightening cash flows and flows of cash into the economy,” he added.
Bharath said in the past the Central Bank had stepped in to mop up excess liquidity in the system. He said the issue of the IMF imposing structural adjustment measures on T&T does not arise, as the country remained “extremely cash-rich at this point in time.” The IMF had also pointed to increased growth for the economy, Bharath said, noting that such reports were a normal process. He said the fact that the IMF was commenting on the economy “is actually a good thing.”