By all indications it's a perilous situation and today Cabinet met to decide how to manage it. Informed observers say it's a meeting that should have been held a year ago, when this situation could have been foretold, but a year late and a few million dollars short, Cabinet is getting serious about finance. First, a public finance committee has been established to monitor and manage all government's money matters.
The committee is led by the Prime Minister and Minister of Finance who is accompanied by his two Ministers of State John Briceno and Joe Coye along with the man the G7 singled out as the architect of the present crisis, Minister of Investment Ralph Fonseca. The group is filled out by Development Minister Assad Shoman, Enterprise Minister Mark Espat, Foreign Trade Minister Eamon Courtenay and Attorney General Francis Fonseca which fills it out at a solid deadlock: four G7 members and three allies of the Prime Minister, plus the PM himself.
Assisted by a technical team, this group will develop a plan for short-term debt management to get through this fiscal year. In two weeks, the Financial Secretary will provide Cabinet with a listing of all public sector loans, loan guarantees and other credit facilities of the government, DFC, Social Security, Central Bank and all statutory boards. On that day the Governor of the Central Bank will also present a paper disclosing the terms for the proposed refinancing of loans with the Royal Bank of Trinidad and Tobago and the International Bank of Miami. According to documents obtained by 7NEWS, government borrowed a total of US$36 million from the International Bank of Miami on a one-year term within the last year.
And while the Fin. Sec. and the Central Bank's Governor will be busy unearthing documents that rarely see the light of day, Cabinet has also instructed the Attorney General to revise the finance and audit act, the social security act, the DFC act and the central bank act, to provide greater accountability and transparency in these bodies. A fair gesture, but critics would point out that in the past sufficiently cautious rules have been ignored by government-controlled boards.
As for public hearings...government called on the Opposition chair of the public accounts committee Erwin Contreras to hold public hearings on the operation of the Social Security Board. And the proposed Senate hearing? Well, government concluded that the Senate itself should decide on that one. It's a major undertaking by Cabinet and the kind that the Prime Minister promised when the G7 broke away. The question now is even with all this disclosure will government be able to navigate the ship of state out of a clearly imperiled course? That should be answered over the next few weeks.
Read the full Cabinet Release by Clicking Here