There are many as­pects of our com­plex econ­o­my; among these is the ma­jor role that eco­nom­ic chal­lenges and crises play in gen­er­at­ing eco­nom­ic adap­ta­tion ; in na­ture this takes place con­tin­u­ous­ly in the fight to sur­vive; to eat or be eat­en and to pro­cre­ate. Our econ­o­my has been sta­ble with en­er­gy sec­tor boom bust cy­cles in which we earn most of our ex­port earn­ings from for­eign in­vest­ment dri­ven com­mod­i­ty ex­ports. To­day, our on­shore ex­port in­dus­try-our "as­sem­bly" in­dus­try-earns around four per cent of our for­eign ex­change. Our on­shore en­tre­pre­neurs con­cen­trate on sup­ply­ing the lo­cal needs of the pop­u­la­tion, and de­pend on the for­eign earn­ings of the en­er­gy sec­tor to fund their im­ports.

They earn a good liv­ing, a good re­turn on their in­vest­ments, in a rea­son­ably sta­ble eco­nom­ic en­vi­ron­ment. Our gov­ern­ments get the re­sources/rents/tax­es to pro­vide so­cial sup­port to the peo­ple. Our en­tre­pre­neurs see lit­tle point in un­der­tak­ing the high risk that is as­so­ci­at­ed with in­no­va­tion that is geared to pro­duc­ing prod­ucts for the glob­al mar­ket when life in their patch of the econ­o­my is se­cure, ben­e­fi­cial and safe. There are no eco­nom­ic chal­lenges or crises that to date have had the po­ten­tial to force us to change the plan­ta­tion mod­el; no re­al threat to our sur­vival, to feed, clothe and house our­selves and fam­i­lies. The prob­lem or the dis­ad­van­tage of a sta­ble econ­o­my is that we do not get the non-as­so­cia­tive ex­pe­ri­ences, de­vel­op the ad­vanced skills that Prof Haus­mann talks about; those that can make us adap­tive, en­able us to mon­i­tor the var­i­ous sig­nals from the glob­al econ­o­my and even pre­dict its eco­nom­ic fu­ture. We did not need to, since to us the fu­ture is like the past and we look for­ward to such a fu­ture.

For ex­am­ple, when there was an in­di­ca­tion that our pe­tro­le­um was run­ning out, our eco­nom­ic sta­bil­i­ty was threat­ened, then Prime Min­is­ter Man­ning told us not to wor­ry, they knew what they were do­ing and that there is gas in the ground, all we have to do is find it. When the signs of this de­ple­tion again raised their heads, our cur­rent Min­is­ter of En­er­gy adopt­ed the same ap­proach: there is pe­tro­le­um in the deep and in­vestors are lin­ing up on our doorstep. The present main­te­nance of the up­stream sec­tor that is in­hibit­ing the sup­ply of gas to the in­dus­try since 2010 is ex­pect­ed to come to an end in ear­ly 2014 which will, ac­cord­ing to the min­is­ter, en­sure the long-term sus­tain­abil­i­ty and re­li­a­bil­i­ty of the gas sup­ply! But Prof Ken Julien has con­firmed now that in­deed there are crises ahead: the de­ple­tion of our nat­ur­al re­sources and, in par­tic­u­lar, the ad­vent of cheap and plen­ti­ful shale gas in our tra­di­tion­al LNG mar­ket and the world.

Fur­ther, this cheap gas threat­ens the petro­chem­i­cal in­dus­try at Pt Lisas since gas is cheap in the US Gulf Coast and the mar­ket is over the fence. Methanex has al­ready re­lo­cat­ed its Chilean plant there. Our eco­nom­ic cri­sis will be our present in­abil­i­ty to adapt quick­ly enough to these glob­al chal­lenges that threat­en the sta­bil­i­ty of our econ­o­my. We would not have de­vel­oped the abil­i­ty to com­pete glob­al­ly and this to­day is about in­no­va­tion. We are near the bot­tom of the world ta­ble of coun­tries in in­no­va­tion. In oth­er words, we have a ma­jor eco­nom­ic se­cu­ri­ty prob­lem on our hands and we have no de­fences.

Our ma­jor con­cern must be to pro­duce goods and ser­vices for ex­port and to suc­ceed, we have to com­pete with the glob­al com­pe­ti­tion. We can­not ex­port a high­way to Pe­nal. These com­peti­tors learn and they adapt and are ag­ile. Re­call that South Ko­rea af­ter the Ko­re­an War was an eco­nom­ic bas­ket case; the US fed them. To­day, they have pro­duced Sam­sung from an agri­cul­ture agent to Chi­na in­to an able eco­nom­ic op­po­nent of Ap­ple.

We can at­tempt to grow cane again or cof­fee or co­coa or co­conuts. We can pro­duce well-known prod­ucts from these us­ing well-known tech­nolo­gies and process­es. But, and even on our own minis­cule mar­ket, we will face glob­al com­pe­ti­tion and our lo­cal com­par­a­tive ad­van­tage will be eas­i­ly de­stroyed by the in­no­va­tion of oth­ers. Our cur­rent en­tre­pre­neurs, in stay­ing in their patch of the econ­o­my, may not fund these ven­tures giv­en the named risk but more­so it is eas­i­er, less risky and as lu­cra­tive to im­port and sell lo­cal­ly. We are even im­port­ing sweet pep­pers from Cana­da! Pe­tro­le­um was a break­wa­ter that pro­tect­ed us from the eco­nom­ic in­se­cu­ri­ty with which oth­ers have learnt to live, to adapt.

Mary K King

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