There are many situations in which the outcome may be favourable or unfavourable due to technicality issues. There are court cases that get dismissed due to technicality. There are definitions of words that some economists and politicians get away. For example all signs of recession are evident but we are waiting for a drop in GDP for two consecutive quarters to declare the country in a recession state.
Recession is measured when there is a drop in GDP for two consecutive quarters. In the Turks and Caicos Islands and most countries, the GDP started to fall in the second quarter of 2020 (April to June). It was during this time that country was also closed for international flights and as result the tourism market was flat during that period. The country reopened in July and as result there was an increase in the tourist market. Now here is the thing, because there was no GDP growth in April to June and there was activity in July to September, some are arguing that there is no recession since there was positive movement in the third quarter compared to the second quarter.
I disagree and will continue to say we are in recession. While it is true that there was an increased in activity in the third quarter because the country opened up, however, the activity that is taking place in the third quarter is still inadequate to cover the expenditure and so we continue to experience losses in the third quarter. The GDP is not positive. It may have improved in the third quarter compared to the second quarter but there is still a drop and loss.
The United Sates and the United Kingdom have declared recession. Didn’t we say that once the US declared a recession then TCI can also say there is a recession?
With a high unemployment and a significant decline in tourism market which is our main GDP driver, then what do you call this economic cycle?
The unemployment rate is higher than it really is. However, because the majority of our workers are expatriates, when there is no unemployment, they must leave the country. However, those jobs that were available a year ago are no longer available but if those jobs were occupied by Turks and Caicos Islanders then our unemployment rate would have been higher. However, there were not enough TC Islanders to occupy the jobs and so we had to import workers but when the economy dropped, these individuals had to and so the true measurement of employment is not really accurate. Again this is due to technicality.
The National Wealth Fund
It was announced that The National Wealth Fund fund is restricted by legislation. Isn’t this just a technicality? If it is restricted by legislation, then can we use legislation to change it from restricted to unrestricted?
In a previous article I wrote, I recommended that the Government needs to intervene by borrowing money to finance capital projects and the recurring expenditure. We know that the government was not keen on borrowing but the fact that we are in a recession, they are forced to borrow. This alone is a sign that we are in a recession. Of course there are other reasons why Governments borrow but this time they are borrowing because there is significant drop in our GDP and the cash flow is limited.
Crime continues to be a global issue. However, some criminals get away with murders due to technicalities and a result justice did not take place as these criminals are roaming the streets free of jail time and perhaps committing more crimes. We must never leave any doors open so that technicality can be used as a means to prevent criminals from serving their time.
We continue to get off with technicality and when we get off with technicality we believe the outcome is accurate. Because a murderer gets off due to technicality, it does not mean the murderer is innocent. Likewise we do not have to wait for the end of the second quarter to say we are in a recession mode. If we are not experiencing recession then what are we experiencing. Even if we do not want to call this recession, I know that people are experiencing a significant decline in their income. I know companies are experiencing significant losses even with the few tourists that are coming. I know that unemployment is at an all-time high. If we are not experiencing recession then what are we experiencing.