Finance Minister Colm Imbert said Monday that the Trinidad and Tobago government was being urged to adopt a structural adjustment programme more than two decades after the oil-rich twin island republic ended a similar programme with the Washington-based International Monetary Fund (IMF).
“Indeed, 25 years after we got ourselves out of an IMF programme, we were advised to embrace the same old sterile measures from 1990, focused on contraction without due consideration of the short- and long-term adverse effects on our citizens,” Imbert told a Development Bank of Latin America (CAF) seminar here.
Imbert, speaking on the theme, “Restructuring a Commodity Dependent Economy for Growth Without External Intervention” said that the adverse effects of the IMF’s structural adjustment programme created the necessity for a wide-ranging programme of economic and financial reform in Trinidad and Tobago.
“For the most part, monetary policy was conducted within the framework of a stabilization programme, whose main focus was on restricting domestic demand and restoring external balance. However, the decline in government expenditure and in real wages, created considerable social and economic pressure especially among the most vulnerable income groups in the society.”
Imbert said that this period of economic austerity also had a profound impact on the fortunes of some non-bank financial institutions and the Central Bank suspended the operations of three such institutions which ran into financial difficulties.
The finance minister said that by 1991, the economy began to respond to the stabilization measures and to show signs of a recovery.