Chairman of the Economic Development Advisory Board (EDAB) Terrence Farrell believes the private sector must lead efforts to diversify the T&T economy.
Farrell was the keynote speaker at an event at the UWI St Augustine campus entitled How to Diversify Trinidad and Tobago. The event, the fourth in an ongoing series of public discourses is a collaborative effort between the UWI Trade and Economic Development Unit (TEDU), the Sir Arthur Lewis Institute of Social and Economic Studies (SALISES) and Guardian Media Limited.
In his presentation, Farrell said: "I am advocating strongly that it is our local private sector businessmen and women who must lead the diversification effort across a broad front. My argument for the private sector is pragmatic. The local private sector has better management capability, stronger marketing skills, superior discernment of business opportunities, and have access to some amount of capital."
He said the Government should stay out of the business of "picking winners" but had a role to play in creating an environment conducive to supporting the efforts of the private sector.
"Government must get the macroeconomic balance right. It has to apply the right incentives and disincentives in order to shape private sector behaviour. It has to regulate markets efficiently and fairly and in limited areas of strategic significance it should be investor or co-investor in certain business opportunities," he said.
Farrell highlighted that past attempts at diversification had failed because of a lack of committed effort based on the notion that declines in hydrocarbon revenues were temporary.
"The current level of oil and gas prices is certainly not propitious for us. But to some extent, however, in many Trinidadian hearts, there is the hope that oil and gas prices will rebound, that oil and gas revenues will flow again and the fete will resume. This hope has diluted commitment to the diversification agenda. Our efforts are half-hearted, indecisive and slow."
According to Farrell, part of the problem with achieving any measure of sustained effort at economic diversification is that the concept of what a diversified economy was had never been clearly defined.
"The definition of diversification adopted by the EDAB is an increase in activities which are capable of generating foreign exchange earnings or saving foreign exchange. We have adopted this approach for several reasons. We believe that the generation of foreign exchange earnings is the right focus in the circumstances of our excessive dependence on exports of oil, gas and petrochemicals and the presumption that global demand for all these products will be declining in the long term."
Farrell's presentation was followed by an interactive panel discussion on diversification and an open forum where members of the audience were allowed to ask questions and receive responses from panel members.
The other members of the panel were Dr Roger Hosein, senior lecturer in the UWI Department of Economics and co-ordinator of TEDU; Professor Patrick Watson, director of SALISES, and Anthony Wilson, chief editor � Business at the T&T Guardian. The event was chaired by Martin Franklin, this year's honoree at the just concluded Conference on the Economy.