Dear Editor,
On the evening of January 5th 1968, Prime Minister, and Minister of Finance, Dr. Eric Williams addressed the nation in a live television broadcast to explain some of the measures he had implemented in the then-recent budget. What’s amazing about it is that, with the exception of one or two talking points regarding specific details from that era, the speech could have been read in its entirety by the current Minister of Finance and absolutely no one would have known that it was being repeated again fifty-six years later. And truth be told, I would be shocked to find out that the current administration didn’t look back to this speech for inspiration on the current communication coming from the government on the issue of the economy and foreign exchange. But more than that, it is difficult to look back at this time and not think that the current measures being put in place by the current PNM administration are not just a continuation of the antiquated policies of a government that was still operating under the British Monarchy.
According to Dr. Williams in 1968, the economic hardship being faced by citizens at the time could be boiled down to two specific reasons:
“… first, we have been devoting too much of our income to personal consumption expenditures. Second, too much of this personal consumption is used on imported goods (such as motor-cars) and imported services (such as foreign travel). It has been truly said that we have North American standards of consumption without the vast productive capacity of Canada and the United States.”
For these reasons, earlier that very same day, Dr. Williams had introduced a new tax scheme that he labelled a “Pay as You Spend” system, which increased the 5% Preferential Tax and 15% General Tax, which existed at the time, to 15% and 25% respectively. There were also increases placed on the taxes for cigarettes as well as the import and excise duties of other luxury imports. What these measures hoped to achieve was two-fold, as it would either restrict the number of “luxury items with snob value” being purchased from foreign markets or increase the taxes being collected on the purchase of these items if there was no marked decrease in consumption. Of course, the overall goal was to reduce the amount of foreign exchange being used to import luxury items for personal use by ordinary citizens, something that the PNM is still waging a battle against to this day.
This being said the measures that were being implemented in 1968 did appear to be more earnest, as in his address, Dr. Williams seemed to honestly want to develop and promote local industries and manufacturers to the extent that they might rival their US counterparts in both quality and cost, thereby generating more revenue for the nation as a whole. In the current climate, however, the problem with the PNM using the same rhetoric as their predecessor overlooks the fact the issue at the heart of the matter is that foreign currency is being hoarded and accessed discriminately thereby creating an artificial inequity that simply did not exist prior. Of course, it cannot be overlooked that the same measures failed in 1968 and caused an economic collapse that almost ended the political career of Dr. Williams prematurely in the early 1970’s. It was only the ill-advised no-vote campaign of the DLP in 1971, and the oil boom started by the Arab-Israeli War in 1973, which allowed him to remain as Prime Minister for another decade.
In his address, Dr. Williams arrived at a question that was percolating amongst the general public :
“Cannot individuals have all their needs for imported luxuries satisfied by using the foreign exchange brought in by outsiders when they lend the Government money or invest in business here?”
His answer to this was that his administration simply was not able to attract enough foreign investment and financing to satisfy the growing demands of the nation. And the fact that five decades later the PNM is still repeating the same failures that have been haunting them from the dawn of our Independence demonstrates that not only have they not learned anything over the years, but that they simply do not care to find a solution that does not punish the citizens of this country in the process.
**Please find the transcript of Dr. Williams’ Broadcast to the Nation on 5th January 1968 at the following link: https://ericwilliams.gov.tt/wp-content/uploads/2024/08/EW198.pdf
Best regards,
Ravi Balgobin Maharaj
Mob: +1 868 476-6181