Front page headline in the Sunday T&T Newsday? “Easter backpay for 16,000 health workers: $636M blessing.” Short version: 16,000 government employees are going to receive US$5,923 per person in unpaid salaries. This in a country where average annual government expenditure on wages and salaries per employee came to US$10,606 in 2015 and US$9,930 in 2016. The arrears are big.
Health workers were not the only ones to go without pay: when I was last here in April, the big news revolved around the way the previous government had randomly suspended salaries. You heard that right: in response to falling oil prices, the government stopped paying salaries.
At first glance, this does not seem unreasonable. Consider the below chart: total government revenues (in millions of U.S. dollars) fell 30% in 2016, from $8.8 billion to $6.1 billion. (Figures are only available through August 2016; data is annualized based on the first eight months of data.) That is one hell of a fiscal adjustment!
But at second glance, it’s crazy. First, in 2014 had Trinidad a debt-to-GDP ratio of only 51%; by 2016, that had risen to only 58%. There was plenty of scope for borrowing to ease the transition. Second, Trinidad could have let the exchange rate depreciate, spreading the pain. Third, the arrears started proliferating in 2015, before the big meltdown in revenue.
Finally, and here is the kicker: expense on wages and salaries barely went down. The government spent US$1.6 billion in 2015 and US$1.4 billion in 2016. Public employment slid from 150,600 to 144,100. Per worker expenditures barely budged.
So what the hell?? Tens of thousands of people without salaries in 2015? Where did the money go?
Obviously, people think corruption. It does not help that Jack Warner (of FIFA scandal fame) said that he witnessed PM Persad-Bissessar accept TT$8.3 million in checks from ... wait for it ... Ishwar Galbaransingh. Now, I would not trust Jack Warner at all about anything ... but the atmosphere here is febrile, considering the apparent mismanagement of the Persad government.
AFAICT, the new government is on track to meet its commitment of clearing the arrears by the end of this calendar year. But the whole episode is inexplicable. You cannot find much evidence of the arrears in the government accounts (which are putatively on a cash flow basis) and you cannot find much evidence in the audit accounts.
But you can find lots of evidence among the government workers who were not paid and the current politicians who seem to be moving heaven and Earth to make them whole!
The new government could do a lot more to make its accounts transparent. It is not doing so. So while employees are getting paid (that I can confirm, although contractors are still SOL) there still seems to be no good understanding of just what happened last year. No wonder cynicism is higher than I have ever seen it, and this is not exactly an idealistic trusting place to begin with.