The talk about diversifying the economy is about three decades old and ongoing. It is an accepted truism that the creation of new products and services, hence companies and jobs, is driven by R&D. Yet T&T's contribution to R&D is less than 0.04 per cent of GDP. A one per cent contribution is recommended if research and development is to meaningfully impact the economic fortunes of a state. One must be sorely tempted to ask whether we are really serious about diversifying the economy.
We are again faced with a drop in the prices of oil and gas and the resulting decreased revenues. If past history gives any clues then it would be realistic to assume that the abysmally paltry figure dedicated to R&D would become even paltrier. Prices would continue to fluctuate and dip in the future and therefore the way forward looks bleak if we continue down the same path. Action is needed and it is needed now.
The action being proposed is to use a small percentage of the sales/use of the country's forex to establish and sustain a national R&D fund. By way of example, if a deduction of five cents (TT currency) for every one dollar (US denomination) sold to businesses was made, then the $500 million US recently gobbled up would have netted some $25 million TT to the R&D fund.
The premise of this proposal is simple. Use part of forex sales to generate more forex, a self-sustaining approach. Presently, it would be safe to say that the majority of the foreign currency is used in providing goods and services for local consumption. This approach cannot and will not sustain the lifestyle to which citizens have grown accustomed.
The implementation of this measure requires that either a deduction is made of forex sales at the rate applicable at the time of the transaction, or a "tax" be added to the sale. This regime could have a sliding scale if the use of forex is prioritised.The purchase of essential medical equipment and supplies could be rated higher than luxury goods etc.
A significant percentage of the R&D fund must be denominated in US dollars to facilitate the purchase of equipment and supplies to facilitate the R&D work.
The establishment of the Fund requires legislation, the implementation of which should be treated as a matter of urgency. Further, proper mechanisms must be put in place to ensure that once funds are collected, they are actually utilised. Amazingly, for a country that is short on R&D funding, available funds are either not or fully utilised.
For this venture to be successful, an independent body should have the responsibility to oversee its operations. Eminent scientists and engineers, including those of the diaspora, must be utilised. Very strict monitoring and evaluation policies and procedures are to be adhered to if the outcome of the funding process is to be the commercialisation of research. To this end, the universities need to up their game and focus a lot more on R&D.
The time for the next wave of economic growth for T&T is upon us. Sugar is gone and oil and gas may no longer sustain us. A successful future requires us to use our experience, knowledge and creativity to develop innovative and new products and services that can generate the required economic output. The new national mantra must be "Discipline, Productivity and Creativity".
As I say goodbye, I sincerely thank the many people who commented verbally and by emails, positively and otherwise, to the column. It would be remiss of me to not extend my appreciation to the Guardian Media Ltd and in particular the former Editor-in-Chief, Ms Judy Raymond, for proposing this column.