Home' Trinidad and Tobago Guardian : August 27th 2015 Contents AUGUST 27 • 2015 www.guardian.co.tt BUSINESS GUARDIAN
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When the current gov-
office in 2010 it was
clear that oil prices
were on a roller
coaster ride. They
had plummeted from a high of US$147/bbl to
some US$45 and those for gas from
US$14/mmBtu to US$3. As the global economy
stuttered back into recovery the price of oil
shot back up to US$100/bbl but with the
structural and political adjustments in the
global industry the oil prices were back down
to US$40 -US$45/bbl. The experts tell us that
such prices will remain for some significant
time to come.
Coupled with decreasing oil and gas pro-
duction, this is indeed bad news for our econ-
omy since this bust will last for some time.
The solution to our boom-bust economy is
its diversification into new export products
and services; a solution that has been mouthed
for the last 50 years but rises to a crescendo
during an economic bust. Today the biggest
crisis facing our economy, the country, is the
lack of such diversification.
When the PP Government took office there
was hope. Parliament approved the establish-
ment of a national innovation system which
was to consist of major classes of institutional
entities; centres of excellence, finance, mar-
keting and market development, intellectual
property protection and its exploitation.
Since the current private sector was set in
its ways of import-markup-sell the intention
was to create an embryonic knowledge based
SME sector to point the way; as being done
by the Tatweer organisation of Libya. This
proposal was put to the public and approved,
even by the IDB, though this development
bank wondered whether we could pull it off.
With this public approval the process of fore-
sighting was started to choose the technolo-
gies/industries we should consider. The tra-
ditional ICT, finance, marine and energy
services were much too vague to adopt without
such a study/advice.
But here, the PP Government dropped the
ball, initially because, as an IDB publication
warned, one of the most difficult tasks in such
diversification was getting the various min-
istries to co-operate in its scope and imple-
The PP Government as a body appeared to
see the diversification exercise as a project of
the Ministry of Planning as opposed to being
a government wide project to transform the
economy; protection of ministerial turf came
Then, with the change of leadership in the
Ministry of Planning and the failure of the
leadership of the COP to continue the support
for the approved diversification system then
in train, the term diversification stayed in
vogue but the substance was discarded.
The term now included the development
of a board walk and zip line in Chaguaramas
that were supposed to encourage small busi-
nesses to cater for visitors, talk about growth
poles and the building of a highway to Pt
Fortin to both ease the traffic situation and
again encourage small restaurants and shops
and the insignificant "i2i" initiative.
The private sector, on the other hand,
expanded its distribution infrastructure (malls,
warehouses) and facilitated the import based
consumerism on-shore in a pseudo boom
driven by the systematically increasing deficit
spending of the government, year after year,
even though its life blood revenue from the
energy sector had dropped, particularly a 30
per cent decline in LNG exports.
Election manifesto time is here again and
there is a grudging admission from government
that hard times may be ahead.
Both manifestos admit that the economy
has to be diversified. Both also revert to the
hackneyed choices of past PNM and UNC
governments; maritime, financial, ICT and
energy services, tourism, agriculture, fishing
and now the resurrection of the energy sector,
hoping also to attract foreign investment.
China is seen as a candidate to set up shop
in our financial centre.
The Kamla manifesto pledges to double
both the exports of the highly subsidised low
productive on-shore manufacturing sector
and of the services sector. This pledge appar-
ently rests on the claim that the PP Govern-
ment was able to increase the non-energy
sector revenue by TT$13billion and grow its
contribution to GDP (consumer spending).
Yet the economy in the last five years strug-
gled to grow at 0.1 per cent per year. Both
manifestos mention that to diversify it is
important to build a knowledge based economy,
innovation, and to do so education, R&D, will
be that cornerstone of this achievement.
UWI (and UTT) is expected to produce
entrepreneurs and the innovation together
with the required leadership skills. However
UWI is not designed to promote innovation
and cannot do so given its structural con-
Both manifestos talk about engaging the
present private sector in this drive to produce
new and high quality exports in a process that
is risky and needs long term funding- a private
sector that is risk averse and operates in a
production system that cannot adapt because
of its history, exemplified by its failure to do
so over the last fifty years.
Both manifestos are loud on the generalities
of what have to be done. But they lack the
system s approach as to; where are the exoge-
nous inputs to come from (eg foreign invest-
ment, local finance), how will the endogenous
inputs be created (eg highly specialised skills),
what form will the innovation system take
that utilises these skills ( i2i is no innovation
system), what is the process to choose the
technologies /industries to be exploited, how
will the new global market opportunities be
selected/developed (eg those pertaining to
global warming, climate change, renewable
energy, water and food shortages).
In this most critical area of our economic
and social development the two contenders
for our governance seem unprepared.
Mary K King
Manifestos of economic fluff
DESIGNATE. DON'T DRINK AND DRIVE.
Both manifestos are
loud on the generalities
of what have to be
done. But they lack the
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