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BG East Africa president Derek Hudson: T&T facing energy cliff
T&T is on the edge of an “energy cliff”, acting President Timothy Hamel-Smith said Thursday evening at the University of the West Indies Arthur Lok Jack Graduate School of Business’ doctoral symposium at its Mt Hope campus. BG East Africa president Derek Hudson agreed with Hamel-Smith that T&T is facing an energy cliff.
“It (T&T) does face a cliff, but from my perspective, I’m not prepared to fall off that cliff,” Hudson said. The two men were talking about dwindling energy resources, volatile energy prices and declining oil production. Hudson said actions need to be taken to prevent the country from “falling off the cliff.”
Addressing diversification of the economy as one of the solutions, Hudson said T&T is “approaching diversification in a sort of a crisis mode,” and questioned why the country is so intensely bent on seeking “economic growth driven by foreign direct investment.” He said how we utilise revenue from oil and gas, though necessary, “is not a discussion going on right now.”
Hamel-Smith said he does not agree with some commentators that government needs to stay out of business. Instead, he said, “Governments should keep out of the operations of business,” and “let the businesspeople run it.” He said T&T could be grown into “a whole new stratosphere.”
He said that instead of competing with countries that could beat T&T on volume, “You have to find the niche market to produce something saleable and, at the same time, generate employment so that you reduce poverty.”
The acting President said, “We need to be export oriented.” He also advocated deeper Caribbean integration and called for joint diplomatic missions for Caribbean Community (Caricom) countries. Panelist, businessman Arthur Lok Jack, said T&T is fortunate to have some very good fundamentals, including “the fourth best credit rating in the region,” but, he said, “economic growth by itself is insufficient to bring about widespread prosperity.”
Lok Jack said: “Growth is equal to increased production,” but “you must have demand, economic return and social return.” He said Government should be investing more in infrastructure, such as building roads and pavements. Lok Jack said he believes “the private sector in T&T will have to transform itself.”
The private sector, he said, can be very efficient and should get into the construction of private homes. He said: “What is in great demand in T&T are homes within a certain price point,” and while governments have tried “they do it very inefficiently.”
There is “a tremendous amount of liquidity sitting down in banks” that should be mobilised, Lok Jack said, adding that there are creative ways to fast forward the economy that are being overlooked. Hudson said, “A successful businessman is someone who’s got a guaranteed government contract for 15 years.”
“When you’re driven by five-year political aspirations, it is difficult to progress,” Hudson said. He said: “How to have economic development and political aspirations at the same time” is what needs to be figured out. Prof Compton Bourne, former president of the Caribbean Development Bank, another of the panelists, said he doesn’t see the “five-year political cycle” as a problem.
He described it as “a necessary difficulty” because there are “many, many countries” with the political cycle who have still advanced. Bourne was more optimistic in his outlook for T&T. He said he sees “sustainable and equitable economic growth for T&T over the next five to ten years.”
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