Last update: 08-Dec-2013 10:46 pm
Sunday, December 08, 2013
Trinidad & Tobago Guardian Online
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No diversification away from energy
Minister Carolyn Seepersad-Bachan in her budget presentation said that government revenues from the non-energy sector have exceeded those of the energy sector (62 per cent to 38 per cent) and this demonstrates that the Government has been able to stimulate the non-energy sector and we are on our way to making this sector sustainable; to diversifying the economy away from energy.
There are two problems with this view. The first as identified by her colleague, Minister Ramnarine, is that Government’s revenues from the energy sector do not include those from LNG and the petrochemical/downstream energy sector; in other words these revenues are counted as non-energy.
Further the energy sector provides 60 per cent of the foreign exchange used by the non-energy sector in import trading in its import-markup-sell commercial activity. Hence the non-energy sector depends for a large part of its lifeblood (foreign exchange) on the activities of the energy sector.
The non-energy sector is not self-sustaining and government revenues from this sector do not demonstrate economic diversification away from energy, nor does the higher growth rate projected for the non-energy sector as compared with that for the energy sector.
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