Home' Trinidad and Tobago Guardian : February 1st 2016 Contents A20
Guardian www.guardian.co.tt Monday, February 1, 2016
What is the morality of
Trinidad and Tobago
drilling deepwater oil and gas
wells? T&T starts drilling deep
sea wells in 2016.With every-
thing that we know about cli-
mate change today, it is impos-
sible to justify the extraction of
new oil and gas. Scientists tell
us that we have to keep it in the
As a small island developing
state, T&T is among the coun-
tries most at risk from climate
Pumping more heat-trapping
CO2 in to the atmosphere is like
a heart patient smoking one last
cigarette. It is a bad idea.
T&T was one of the signato-
ries of the ambitious COP21
agreement goal to limit climate
change to 1.5C. That goal is
incompatible with continued and
increased fossil fuel extraction.
Deepwater drilling is risky.
Working at thousands of feet
depth is like working in space. It
is an alien and dangerous envi-
Accidents happen. There is
nothing to prevent another Gulf
of Mexico disaster. T&T was
unable to cope with the small
breach of a transmission line, on
a jetty, during the 2013 Petrotrin
oil spill. Imagine what will hap-
pen when there is a spill at
thousands of feet depth.
I have no doubt that some
hydrocarbons will be found in
the deep-sea blocks. Many citi-
zens will breath a sigh of relief
One fossil fuel analyst says
that there could be enough to
increase T&T s production five-
fold. He called it "transforma-
tional". Transformational means
something new. It means an
evolution. He cannot have much
grasp of T&T s history because
another oil boom is nothing
new. We have known nothing
else. It is a sign of our failure to
develop as a nation that we still
think of time as "before the 1st
oil boom" "when the 2nd oil
boom ended" and now, possibly
"after the 3rd oil boom starts".
T&T is trapped in the resource
curse, and we don t know how
to get out. If the deepwater
wells are successful it will be a
curse manifested as a blessing.
It will be a third chance to do
what we did not do the first
two times: build a sustainable
There is nothing in our histo-
ry, or present philosophy, to
suggest that we will put this
wealth to good use.
We will fritter away a third oil
boom in exactly the same way
that we did the first and the
Our cross-party leadership has
never shown that it has the guts
or the brains to rise above pop-
ulist politics, except when faced
with the direst economic straits.
We let economic circumstances
dictate decisions for us. It is in
our political DNA.
Based on per-capita GDP, T&T
was declared a developed state
by the Organization for Eco-
nomic Co-operation and Devel-
opment in 2010.
That did nothing to solve the
crime hotspots, persistent pover-
ty, and dysfunctional institutions
that plague our nation. What
kind of developed state sees its
university graduates make emi-
gration their first career move?
Oil royalties assure the gov-
ernment easy money, independ-
ent of economic policy. Eco-
nomic results are unimportant.
It doesn t matter what your tax
base is once the oil companies
pay your fees. A bloated govern-
ment, absolved of having to cre-
ate results, has only to keep the
royalties flowing and hold
enough voters in blissful
bondage through make-work
programs. Productivity is unim-
portant so it doesn t matter that
the state outcompetes the pri-
vate sector for labour.
Oil and gas has created a
political-economic caste system
that consolidates power in the
hands of the political class and
the party financiers. The result
is the country that we see today.
It is a fearful country that lacks
confidence, wracked by crime
and corruption and characterised
by an inflationary and con-
There is nothing about this
system that deserves continua-
tion. It is the enemy of the peo-
Diversification is the only way
forward. It will require con-
straint and vision on the part of
the political class, but what
hope do we have that they will
voluntarily cease to feed the
system on which they depend?
The government has been a
true reflection of the electorate,
which has always had small
hands that are easily filled. The
people will not hold them to
Our best hope is that the oil
and gas wells run dry and that
the exploratory wells fail. It is
the only way that our people
can move forward.
We are ruled by circum-
stances, not by facts or vision,
so fossil fuel depletion will force
upon us the societal and eco-
nomic change we need to thrive.
MARC DE VERTEUIL
On January 21, the Minister of Finance presented a colourful
and snazzy response to growing criticism and complaints on
his fiscal policies.
Upon inspection and analysis of the document and his state-
ment, however, one would realise that it is without substance
and devoid of any explanations regarding how this plan stands
to solve any of our economic issues.
Beyond pandering to both the gullible and the uneducated in
our society, this presentation neither addressed the amount of
revenue these initiatives would create for the Government, nor
the impact it would have on our cost of living.
But what is truly insulting is the fact that the Minister can
prepare a "proposed shopping list" based on consultations with
the Central Statistical Office, that claims to be the "average
monthly household consumption" of a family size that is not
explicitly stated, but bases its findings on the cost price of one
of every item.
This was most likely necessary, however, to undercut the true
extent of the inflationary burden these VAT additions will have
on the purchasing power of the citizens, especially since it was
being compared at the time to the "savings" that will be
incurred from the increase in the exemption cap for income
Based on the decision to increase the cap on people qualified
for exemption from income tax, from $60,000 to $72,000 per
annum, the people who were not previously exonerated, an
estimated 59,000 people, will now enjoy an additional $210 per
month, due to their new status.
If you were to immediately subtract the increased VAT on the
"proposed shopping list," which was calculated to be $50.86,
then that person is now left with $159.14. What you will realise
however, when examining that list, is that a family of four
would have to extremely ration themselves if they are to sur-
vive, on one of everything that they are suggesting.
Granted, I am sure that not every family will consume every
item listed, thereby allowing for the purchase of additional
items on the same budget, however, the vast majority of items
are staples of our diet, whereas the distinctive items are fewer
and don t impact the budget in any significant way.
The really baffling thing about this entire plan, however, is
that it seems to directly conflict with the government s overall
objective to accumulate more revenue in the face of an
impending recession. While indeed, an increase in tax revenue
can occur as a result of soaring inflation, without an increase
to foreign revenue streams, however, what will eventually hap-
pen is either we will have to devalue our currency on account
of our money eventually becoming worthless, or the Govern-
ment will have to continuously reduce VAT and other taxes,
something that is already being discussed by Mr Imbert.
Because if a finite amount of money is being circulated con-
stantly, but is losing its value on a regular basis, it will only
diminish in the hands of the citizens and find itself locked
away in the Treasury. But what is the point of a government
having a fat public purse, if the pockets of its citizens are
Economic plan devoid of substance
MAY THE OIL AND GAS WELLS RUN DRY
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