Home' Trinidad and Tobago Guardian : October 10th 2013 Contents OCTOBER 2013 • WEEK TWO www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG11
David Small, one of the four new independent senators
appointed in August by President Anthony Carmona, said the
Government is putting caution to the side with its record $61
billion budget in the face of falling crude production.
"Given our energy sector reality, a record budget of $61
billion seems to be flying in the face of the just barely stable
natural gas production, and the rapidly declining crude oil
Small said given the overwhelming importance of energy
revenues to T&T s economic stability, "there seems to be some
putting to the side of caution. We can only stand here today
and smile and be comfortable, because some other force has
allowed us, in a situation where ammonia prices, ammonia
production, methanol production declined, oil production, oil
exports declined; while they declined, the prices increased.
So that we have been very fortunate that at a point in time
when our production declined, the prices increased. So that
as far as the Minister of Finance and the Economy is concerned,
there was a relatively stable flow of funds into the economy."
He said based on data from the Ministry of Energy and
Energy Affairs for 2011 and 2012, ammonia exports declined
by 11.6 per cent and 4.01 per cent, respectively; ammonia
prices increased by 33 per cent and 3.5 per cent, respectively;
methanol exports declined by 3 per cent and 4.2 per cent in
2011 and 2012, respectively; methanol prices increased by 11
per cent and then 4 per cent.
He said crude exports in 2011 and 2012 declined by 15 per
cent and 20 per cent, respectively; crude prices increased by
16 per cent and they just about held in the following year.
"So what I am saying is that T&T has been fortunate; God
really is a Trini. At a point in time when production of our
major exports declined, prices went up and made up the gap,
and anyone or any party or any group - not political party,
forgive me - anyone who wants to claim any credit for having
an impact in the prices, so be it," he said in Parliament last
"In a situation where we are very fortunate as a country
that at the point in time when production of our primary
products, major exports have declined, prices have helped us
out. It has nothing to do with any policy or strategy, in my
own humble view."
Small, who was appointed to the Senate in his capacity as
an "energy expert", said the "T&T energy sector faces a number
of important challenges in the medium- to long-term." He
said some of these were presented by the emergence of shale
"There are challenges that exist for the extension of gas
supply contracts for existing gas-based projects. Our current
gas reserve situation limits our current ability to do downstream
expansion. The downstream industry has not expanded with
no any new projects since 2009, and then new projects are
moving at a snail s pace."
Small mentioned the Constantine liquified natural gas (LNG)
project and the Eastern Caribbean Gas Pipeline project, saying
he "did not hear the Minister of Energy and Energy Affairs
make any comment about them. What I would like to find
out, eventually, is where they are."
On the other hand, he said, it is not all gloom and doom.
The ministry has been very aggressive regarding the sched-
uling of competitive bid rounds, "and they should be com-
mended for this, because this is something that has not been
given the appropriate attention, and the outlook is very good
for the additions to the gas reserve base. I am one who is very
optimistic about it."
More info needed on US$600m deal
Changing the topic, he said the Government should be
focusing on "moving the country from being a tax collector
to being an equity partner with a leadership role. I think that
in that vein, I support, in principle, the move to purchase the
39 per cent shareholding of ConocoPhillips in Phoenix Park
Gas Processors Ltd, and the plan to take those shares and put
them into a new quo and have them placed on the stock
Regarding that deal, he said: "I have heard concerns about
the price paid and whether or not the value proposition for
the country was being maximised. My concern is that there
has been precious little information in the public domain to
allow for what I consider to be a rigorous examination of the
merits of the transaction.
"However, given my own previous link with that excellent
company, I think it might actually turn out---with the turning
of time---to have been an excellent deal, but I still think that
more information should have been put out and made pub-
lic."He said the reason to do that is to allow a comparative
"So for instance, if you had that US$600 million and someone
said, Llisten, I can give you 10 or 15 per cent share in Atlantic
Train 1, or Train 2, or Train 3," would the returns have been
greater? Without understanding the merits of the deal and
the details of how this worked out, we will never know, and
the issue for me also is, what is the exact strategy guiding this
and other major energy decisions? For me, as far as I could
find, it is not publicly known in any depth."
He called for the country to "not only to invest in existing
areas, but be actively planning to invest in new projects. To
that end, in my professional humble opinion, the loss of the
Alutrint project deprived the country of a potentially eco-
nomically strong opportunity to enter a new industry, one in
which the state was a majority shareholder, and it is often
said that hindsight is 20/20, but I base my views on my pro-
fessional understanding of the details of which I was very
much involved in the details at the time, and from where I
sat, that was an opportunity that could have matured and
done very well. Things change."
He said in looking forward, he hopes to see the state "take
a significant shareholding, perhaps even a controlling share"
if it were to invest in any new LNG project.
Govt putting caution to the
side with $61bn budget
Global Entrepreneurship Week 2013 will be
celebrated in more than 130 countries from
November 18--24. In the countdown to that
event, the Youth Business of T&T s focus is
on entrepreneurship as a contributor to job
The recently-published Review of the Econ-
omy 2013 highlighted the fact that the world
economy has been grappling with "the impact
of the financial crisis and world recessionary
conditions since 2008."
A major fallout of this crisis has been the
sharp increase in global unemployment rates.
The search for a solution to unemployment
has led to a renewed focus on job creation,
especially sustainable jobs.
The reality, however, is that the traditional
employment opportunities are no longer avail-
able and economies are forced to become
more creative and innovative as they continue
to seek out non-traditional avenues to survive
While there are different views on the def-
inition of entrepreneurship, it is widely accept-
ed that it is more than just operating a small
business and that it involves the willingness
to venture into business opportunities asso-
ciated with innovation, wealth creation and
risk. Indeed, more and more nations are
actively promoting entrepreneurship as the
only medium-term solution to their unem-
For example, one of the countries that has
suffered from severe unemployment since
2008 to date is Spain. The country s current
unemployment rate is roughly 26.2 per cent.
However, over the first seven months of this
year, registrations of self-employed persons
(entrepreneurs) increased by 21,992; the num-
ber of companies created, increased by 6 8.2
per cent in the first half of 2013.
Spain has now evolved into a new paradigm
of "necessity entrepreneurship" where people
establish businesses to exit unemployment
rather than capitalise on a business oppor-
tunity. Start-up businesses have actually filled
the void left by Spain s huge unemployment
According to Pedro Nueno Iniesta, an entre-
preneurship professor at Madrid s IESE Busi-
ness School, "new companies will help foster
an economic recovery in Spain, if they can
generate jobs, business for other firms and
revenue for the state."
Closer to home, most of the economies in
the Caricom region are facing chronic unem-
ployment. In July this year, the secretary-
general of Caricom, ambassador Irwin
LaRocque stated at the Meeting of Caribbean
Ministers of Labour stated: "Of increasing
concern in our region, is the fact that even
among those who successfully complete sec-
ondary and tertiary education and among
those who have access to technology, many
are unable to secure a decent job."
Here in T&T, while the recent official reports
point to a surprisingly low unemployment
rate of 4.9 per cent in the third quarter of
fiscal 2012, a more detailed examination of
the statistics reveals an unemployment rate
of 49.8 per cent among the 15-29 age group.
This is a worrying trend.
Efforts are being made not only by the pub-
lic sector, but also by the private and NGO
sectors and academic institutions, to promote
entrepreneurship development, especially
among the youth.
In this regard, using the concept of entre-
preneurial education to assist in reducing
unemployment, in May 2013, the Ministry of
Labour and Small and Micro Enterprise Devel-
opment collaborated with the University of
the West Indies to develop a link between
entrepreneurship and education through the
introduction of a new foundation course at
the University of the West Indies (UWI), where
every student, regardless of discipline, could
be exposed to entrepreneurial skills training.
At the launch of this initiative, Carl Francis,
permanent secretary in the Ministry of Labour
and Small and Micro Enterprise Development,
"Cognisant of the fact that traditionally,
regional institutions of higher learning and
research, such as the University of the West
Indies, have played a key role in facilitating
the development of the Caribbean s intellectual
capital, today s nexus between entrepreneur-
ship and academia, augurs well for the future
of T&T, for the development of a new
approach to sustainable growth and devel-
opment, and for the quest to shift the economy
away from its over dependence on the energy
Creating jobs via entrepreneurship
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