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HERITAGE AND STABILIZATION FUND USAGE

Published: 
Sunday, June 12, 2016

Last week, the exposure of the fact that the Government had dipped into the Heritage and Stabilisation Fund (HSF) and no official announcement was made for the information of the general public opened a controversy. In the Senate last Tuesday, an urgent question from Senator Wade Mark to Finance Minister Colm Imbert was greeted with a stock answer that the withdrawal was required for “financing of the service of Trinidad and Tobago for 2016.” 

Reporter Clint Chan Tack writing in the Newsday for Wednesday, June 8, under the headline Imbert shows contempt for HSF reported as follows:

“Opposition Senator Wade Mark yesterday accused Finance Minister Colm Imbert of being disrespectful to the population, by giving a ‘non answer’ to an urgent question in the Senate about a withdrawal of $2.5 billion from the Heritage and Stabilisation Fund (HSF). During his contribution to debate in the Senate on the Public Procurement and Disposal of Public Property (Amendment) Bill, 2015, Mark digressed to condemn Imbert on his answer to that question earlier in the sitting.” 

The current HSF was established in March 2007 with the enactment of the Heritage and Stabilisation Fund Act (No 6 of 2007). Its predecessor was called the Interim Revenue Stabilisation Fund (IRSF) which was established in 2000. All of the proceeds in the IRSF were, in fact, transferred to the HSF in 2007.

What this history demonstrates is that the concern for the protection of the economy of this country has been shared on a bi-partisan basis seeing that the UNC administration of then prime minister Basdeo Panday had launched the IRSF in 2000 and the PNM administration of then prime minister Patrick Manning had established the HSF in 2007 as the replacement for the IRSF and transferred the proceeds from one account to the other. 

The manner in which the information about the withdrawal of $2.5 billion from the HSF was made public was most troubling. Express investigative reporter Asha Javeed was able to blow the cover on what would have been an otherwise secret withdrawal in last Sunday’s Express. From there the media followed it and it was ventilated widely.

Indeed, Opposition Leader Kamla Persad-Bissessar questioned why the withdrawal had taken place seeing that the prices of oil and gas had increased in recent times from their earlier collapse. Perhaps, the most troubling aspect of the whole scenario is that the amount withdrawn had far exceeded what Prime Minister Rowley told the nation last December 29 would have been withdrawn.

Back in December, Rowley was talking about a $1 billion withdrawal this year and a $500,000 withdrawal next year. Why was Minister Imbert so impatient with Senator Mark in the Senate last Tuesday when a legitimate urgent question was asked about the withdrawal?

Surely the Government must understand that for a first-time withdrawal from the fund there will be questions. The biggest problem here seems to be an attitude of contempt. The Government has to work on this issue as a communications matter because it is adversely affecting their image which comes across as condescending rather than respectful.

Putting that aside, the answer given by the minister was devoid of any details and would lead any reasonable observer to conclude that the Government was not prepared to submit itself to scrutiny or simply did not know exactly why it withdrew the funds.

Why was there no public announcement from the Ministry of Finance that the funds had been withdrawn? Why was the minister only prepared to give a stock answer to the Senate when asked a specific urgent question? Surely, that would have been the occasion for the minister to come to Parliament with a detailed breakdown of data that would have allowed the general public to get the kind of information that it is entitled to get on such a matter and in the process push back the Opposition.

After the story broke in the Express on Sunday, it was only natural for the minister to expect a question in the Senate on Tuesday. There would have been ample time to prepare a detailed response either from data compiled at the time of the withdrawal or subsequent to that.

According to the 2014 report of the HSF board of directors under the chairmanship of Dr Ralph Henry, there is an interesting sentence which reads as follows in the chairman’s foreword:

“After careful consideration, the board recommended that the fund should not be split formally into two funds at this time—ie, a Heritage Fund and a Stabilisation Fund.” (p 4).

That particular comment is at odds with the Prime Minister’s statement last December to separate the Heritage from the Stabilisation in order to create two funds. This is another issue in the current HSF debate. This begs the question of what was the thinking of the board in 2014 for not delinking Heritage from Stabilisation?

More transparent discussion and scrutiny of the HSF is now required seeing that the first withdrawal has been made and the separation of the fund is on the table.

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