Ever­ard Med­i­na

In the years af­ter the end of World War II, in the hey­day of new­ly-won in­de­pen­dence, it was the ac­cept­ed wis­dom in new­ly emer­gent coun­tries that en­trance in­to the so­ci­ety of na­tions need­ed a na­tion­al flag, a na­tion­al an­them, a na­tion­al air­line and a sports sta­di­um. These were the trap­pings of in­de­pen­dence.

T&T did much bet­ter than that. In the oil boom years of the ear­ly 1970s to the ear­ly 1980s, the coun­try built up a large pub­lic sec­tor fund­ed by petrodol­lars. It bought out some for­eign oil com­pa­nies and set up large petro­chem­i­cal and steel plants. The col­lapse of oil prices brought in the IMF. Back in 1983 Prime Min­is­ter George Cham­bers an­nounced that "the fete is over."An ar­ti­cle in the Chica­go Tri­bune of De­cem­ber 13, 1992, records what hap­pened next:

"Trinidad and To­ba­go is aim­ing to go pri­vate. Faced with a se­vere fis­cal crunch, the Gov­ern­ment plans to sell some or all of its shares in the prized fer­tilis­er, oil, petro­chem­i­cal, and steel com­pa­nies. It is al­so seek­ing a part­ner for its debt-strapped air­line and is un­load­ing a bunch of mon­ey-los­ing op­er­a­tions, in­clud­ing pack­ag­ing, fish­eries and tourism ven­tures, among oth­ers.

Pri­vati­sa­tion is not new to the oil-ex­port­ing coun­try of 1.2 mil­lion peo­ple off the coast of Venezuela. The out­go­ing ad­min­is­tra­tion sold some shares in the State phone and ce­ment com­pa­nies, and al­so a com­mer­cial bank start­ing in the late 1980s."By the late 90s that benev­o­lent de­ity with a T&T pass­port once again an­swered the prayers of his fel­low cit­i­zens, and the gas boom was on.

En­thu­si­asm for pri­vati­sa­tion had waned; how­ev­er the "State En­ter­pris­es and In­vest­ment Pro­gramme 2014" now in­forms us that the Gov­ern­ment has some 60 state com­pa­nies, of which 48 are whol­ly-owned, sev­en ma­jor­i­ty-owned and five have mi­nor­i­ty share­hold­ing.

Some of these com­pa­nies such as Tuck­er Val­ley Agri­cul­tur­al En­ter­pris­es Ltd (March 2006) and Trinidad and To­ba­go En­ter­tain­ment Com­pa­ny Ltd (May 2005) are re­cent­ly formed and seem to be de­vot­ed to ac­tiv­i­ties that the Gov­ern­ment deems ben­e­fi­cial to the coun­try, and which they be­lieve would be bet­ter per­formed with­in the frame­work of the lim­it­ed li­a­bil­i­ty com­pa­ny.

There are oth­er com­pa­nies which would have been di­vest­ed long ago if the gas boom had not pro­vid­ed the dol­lars to con­tin­ue fund­ing all in­ef­fi­cien­cies. It might be time to re­vis­it the old de­bate. Can Gov­ern­ment run busi­ness? Is state own­er­ship a good thing? Can Gov­ern­ment do it bet­ter?

Thomas Sow­ell, Amer­i­can econ­o­mist, so­cial the­o­rist and po­lit­i­cal philoso­pher, cur­rent­ly the Rose and Mil­ton Fried­man se­nior fel­low on Pub­lic Pol­i­cy at the Hoover In­sti­tu­tion, ad­mits to hav­ing been a Marx­ist "dur­ing the decade of my 20s" when he worked as a fed­er­al (USA) gov­ern­ment in­tern dur­ing the sum­mer of 1960. This ex­pe­ri­ence caused him to aban­don his sup­port of state own­er­ship, state cap­i­tal­ism, call it what you will, in favour of the free mar­ket. He com­plet­ed his in­tern­ship con­vinced that "the Gov­ern­ment can't run any­thing."

Is Thomas Sow­ell cor­rect? Is the col­lec­tive view of the peo­ple of T&T over the years cor­rect? Cer­tain­ly, when the short­com­ings of some gov­ern­ment com­pa­nies be­come pub­lic knowl­edge as they should, as pub­lic funds are in­volved, the head­lines do not as­sist the Gov­ern­ment of the day in any way.For ex­am­ple, "NP los­es $190m;" "Lar­ry Howai fires the chair­man of Na­tion­al Quar­ries;" "The Min­is­ter has fired the en­tire Caribbean Air­lines board." Not nice read­ing with our morn­ing cof­fee.

These head­lines pro­voke em­bar­rass­ing ques­tions for the Gov­ern­ment of the day, whichev­er gov­ern­ment it is, for these is­sues have been around through sev­er­al changes of ad­min­is­tra­tion.

The ques­tions asked are, is it re­al­ly the Gov­ern­ment's busi­ness to re­tail gaso­line, run quick shops and lose $190m of the peo­ple's mon­ey do­ing so? Has it not been State pol­i­cy to di­vest the NP ser­vice sta­tions for years? Why is that tak­ing so long? Mr Ken­neth Mo­hammed, CEO of NP mar­ket­ing, has been re­port­ed in the Ex­press of Oc­to­ber 30, 2013, as hav­ing said that "new re­tail­ers are es­sen­tial to NP's prof­itabil­i­ty be­cause the com­pa­ny was in the busi­ness of fu­el dis­tri­b­u­tion and not in run­ning sta­tions." I could not agree more.

Was not Bee Wee los­ing mil­lions a year when the plug was pulled decades ago? Will Caribbean Air­lines avoid the same fate? Boards of di­rec­tors play­ing mu­si­cal chairs are not re­as­sur­ing. What on earth is the Gov­ern­ment do­ing in the quar­ry busi­ness?

The much-trum­pet­ed pub­lic of­fer of First Cit­i­zen's bank shares was a hes­i­tant sale of 20 per cent of the share­hold­ing. One won­ders what the Gov­ern­ment is afraid of. There are oth­er larg­er banks in the coun­try ef­fi­cient­ly go­ing about the busi­ness of na­tion­al bank­ing in the na­tion­al in­ter­est as laid down by suc­ces­sive ad­min­is­tra­tions.

I am cer­tain that First Cit­i­zens will con­tin­ue to do well in that en­vi­ron­ment. To put a prop­er per­spec­tive on this is­sue, let us bear in mind that there are 111 com­mer­cial banks, 49 mer­chant banks, and 45 rep­re­sen­ta­tive banks with of­fices in Sin­ga­pore.

–Ever­ard Med­i­na is for­mer pres­i­dent of the Trinidad and To­ba­go Cham­ber of In­dus­try and Com­merce