Bilateral talks with World Bank: Govt seeks US$5b to boost economy | News Extra

Minister of Planning, Economic Affairs and Development Kennedy Swaratsingh has announced plans to secure up to US$5 billion in funding over the next three to five years to support private sector-led diversification initiatives under the Government’s economic revitalisation agenda.

According to a release yesterday from the Planning Ministry, Swaratsingh’s statement came during bilateral discussions which he hosted with the World Bank Group to further identify initiatives and areas where the World Bank Group, through all its financing windows, can support the Government of Trinidad and Tobago’s Economic Reset Agenda.

The World Bank Group made a four-day visit to Trinidad from Monday to Thursday.

The ministry stated that the agenda of the meeting was to reposition the Government as a facilitator and regulator, to energise private sector-led growth, expand non-energy revenue generation, and achieve fiscal resilience for the country.

According to the minister, the strategy undertaken by the Government involves the World Bank, the Inter-American Development Bank (IDB) and its International Financial Centres (IFCs) in tandem with Trinidad and Tobago’s private sector.

He explained that this initiative aims to change the traditional process of funding through international agencies being geared towards government programmes, budget support and government projects.

He added that IFC funds probably approximately US$60 billion globally in private projects, and said that the focus of these resources can be placed towards the private sector, to support deeper access to international agency-level funding.

The minister also highlighted new options becoming available, such as credit support through the Multilateral Investment Guarantee Agency (MIGA), adding that “instead of relying on a sovereign guarantee, assurances can be made to the private sector for projects.”

In addition to that, he said that support can also be provided to a private sector actor where guarantees can be made to alleviate hesitancy due to currency risks, and in a case such as this, MIGA can provide guarantees and support to investors, making opportunities and risks more attractive.

Commenting on the minister’s announcement, economist Dr Indera Sagewan said, “The fact that the minister has already put these things in train within a month of being in office, I think augurs very well for the signals that are being sent by this new Government and where it is intended to take the country.”

However, she emphasised, “I have long been on record saying that, you know, as far as it’s possible, we should be borrowing money in order to make money. What that means is we should be borrowing money to engage in activities that can lead to increased exports of goods and services, expanding the different sectors that we have outside of oil and gas, and the whole issue of economic diversification, which obviously is an imperative in this moment.

“Of course, all we have at this moment in time is the bare bones of what he is intending and I trust that in some near future, we will get more details in terms of where exactly this money is to be allocated and how and what are the intended objectives that he hopes to gain from it.

“And that we will see all of this plotted out on a timeline with their deliverables, so we as taxpayers can then assess as Government borrows money and uses it for this purpose in order to see whether we are in fact getting value for that money; because at the end of the day, money that is borrowed must be repaid.”

Sagewan opined that what is even more striking is the need to generate US dollars in order to repay debt borrowed in US currency, as the country currently faces a serious foreign exchange challenge.

“So, therefore, it means even more important—this money must be used in a diversification effort that is geared towards increasing our export capability and therefore our foreign exchange earnings, which will then be required in order to service these loans,” she added.

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