Home' Trinidad and Tobago Guardian : January 23rd 2014 Contents JANUARY 2014 • WEEK FOUR www.guardian.co.tt BUSINESS GUARDIAN
COMMENTARY | BG3
Chief editor-business: ANTHONY WILSON
Editing and design: NATASHA SAIDWAN
Fax: (868) 623-2050 (Editorial)
Fax: (868) 623-2050 (Advertising)
22-24 St Vincent Street,
PO Box 122.
Early this year, economist Mary
King uploaded a blog post head-
lined Disruptive Outliers, in which
she argued, in concurrence with
Mona-based UWI professor of
Caribbean sustainable development Anthony
Clayton, "that incremental innovation (eg
improving a drilling machine or making another
mobile phone application) is highly doubtful
as a route to diversification; we need to engage
in disruptive innovation."
Ms King argued that T&T needs to "engage
our bright youngsters in the production of
breakthrough products and services, much
like what we see that came from Bill Joy and
Bill Gates (in computer programming), Steve
Jobs of Apple and Eric Schmidt of Novell."
She further argued: "These disruptive out-
liers-to-be, started off as being bright, as
many others, but by good fortune and the
help of others, love for the emerging tech-
nologies, on which they spent a stupendous
number of hours training, prepared them for
the disruptive innovations that created Apple,
Microsoft and Sun Microsystems."
She opined, as well: "If we are really to
diversify our economy, we need to create these
disruptive outliers and to do so we have to
mimic innovation in the US; select the bright
ones and the promising technologies (chosen
by a foresighting exercise), provide the learning
opportunities and the resources in what I call
our centres of excellence."
It is clear to me that while Ms King is an
enthusiastic proponent of innovation, there
seems to be little connection between her
writings on this subject and the realities of
Her suggestion that we need to "select...the
bright ones" and the "promising technologies"
and provide them with the resources in what
she calls "centres of excellence," can be imme-
diately greeted with the following questions:
• Who exactly is going to do this selection
of the "bright ones"?
• On what basis will these "bright ones"
• Did anyone "select" Bill Gates or Steve
Jobs or Mark Zuckerberg?
• Did anyone "select" that one software that
went on to dominate the world or that online
social network that would ensnare 1.4 billion
people in less than ten years?
• Did a government agency "select" Mark
(or Steve or Bill) because they were bright,
young men and give them cheques to build
• Did Zuckerberg need a centre of excellence
to help him conceive of and build Facebook?
• Isn't the main lesson of Bill and Steve and
Mark is that they started off with an idea in
their parent's garage or in their college dorm
I would submit that what Bill and Steve and
Mark---who are all Americans---have is a culture
that rewards innovation but does not punish
Do we have a such culture?
Or do we have a culture in which innovation
is punished---as in the UWI professor of engi-
neering who was sued for attempting to inno-
vate in one of the few things that T&T is so
proud to boast was created here?
I am not making a political point, but doesn't
the fact that that UWI professor was "selected"
by the PNM, but sued by this administration
demonstrate the fragility of the proposal for
the selection of "bright, young people" who
would "devote all their waking hours" to inno-
vation in a "centre of excellence"?
Instead of attempting to impose innovation
in a culture that, it seems to me, is anti-inno-
vation, I would argue that any diversification
thrust should seek to exploit T&T's existing
resources and comparative advantages.
Natural gas and petrochemicals are among
the resources that this country has and it
seems logical to me that any diversification
thrust should begin with attempting to add
more value to our resources.
The November 2013 Energy Bulletin pro-
duced by the Ministry of Energy indicates that
T&T produced 4.2 million metric tonnes of
ammonia between January and November last
Of that amount, 3.8 million metric tonnes
was exported to markets throughout the world.
This means that 90.6 per cent of the ammonia
produced in T&T for the first 11 months of
2013 was exported.
The picture for the country's methanol
industry is this: 5.16 million metric tonnes
produced and 5.26 million metric tonnes
exported, which means that T&T exported
more methanol than it produced.
The 2012 Downstream Gas Industry Annual
Report indicates that the January to November
2013 numbers for the production and export
of ammonia and methanol are not an anom-
aly.In 2012, T&T exported 92.5 per cent of the
4.9 million tonnes of ammonia that was pro-
duced in the country and 101 per cent of 5.49
million tonnes of methanol.
The 2012 numbers for urea, UAN (urea
ammonium nitrate, which is a liquid fertilizer)
and melamine are just as revealing:
• Urea production: 569,804 metric tonnes;
urea exports: 544,512 metric tonnes, which
means that 95.5 per cent of the urea produced
here in 2012 was exported
• UAN production: 1,367,881 metric tonnes;
UAN exports: 1,338,441 metric tonnes, which
means 98 per cent of what was produced here
• Melamine production: 46,359 metric
tonnes; melamine exports: 45,772 metric
tonnes, which means that 98.73 per cent of
what was produced here was exported
T&T fails to add value to oil resources
The picture of T&T in 2014, then, is of a
country that exports a significant percentage
of its natural gas in the form of LNG and uses
much of the balance to produce methanol,
ammonia and urea, which are then exported.
As King, and those who advocate the plan-
tation economy school of thought would argue,
T&T has replicated the muscovado bias of
two centuries ago by failing to deepen the
added-value to our original petrochemicals.
Any time the production numbers for
methanol and ammonia are cited, government
officials boast about the fact that T&T is the
number-one exporter of these commodities
in the world.
That boast should actually be a source of
shame for this country because it means that
we are exporting products with a little added
value and then importing packaged and brand-
ed products---such as the fertilizer popularly
known here as blue corn---which can easily
be produced here.
It can be argued that the production of UAN
and melamine---both of which come out of
the MHTL empire once controlled by Lawrence
Duprey---was an attempt to add value to T&T's
methanol, ammonia and urea. This is true.
But UAN is a liquid fertilizer---most of which
is exported---and melamine is at best an inter-
mediate product, which is used to produce
scores of different products, including lam-
What T&T needs is a push by the private
sector to go further downstream of our existing
petrochemicals in a way that would replicate
the success of SM Jaleel in getting its branded
juices and drinks sold in 60 countries.
To get there, the Government needs a clear
policy aimed at deepening the synergies
between the existing local petrochemical pro-
ducers and the potential manufacturers of
branded, market-ready products for the global
In a sense, Neal & Massy's equity involve-
ment in the DME facility with the huge Japan-
ese conglomerate Mitsubishi is a step in the
right direction. But a small step.
Our diversification thrust needs to focus on
going further downstream of ammonia, urea,
methanol, UAN and melamine. Of course, this
process of going further downstream would
be greatly assisted if the lengthy MHTL arbi-
tration can be concluded in a manner that is
a favourable to the country.
The successful conclusion of the MHTL
arbitration would unlock methanol, ammonia,
UAN and melamine resources that can be used
to develop a whole, new manufacturing thrust.
How can T&T transform
its manufacturing sector?
Links Archive January 22nd 2014 January 24th 2014 Navigation Previous Page Next Page