We have been forced to sell our shareholding in Methanol Holdings (Trinidad) Ltd (MHTL) and we have some US$1.175 billion sitting in the bank. I have suggested that instead of using this asset to repay loans we should invest it in building an on-shore asset that can diversify the economy.
However, there is still talk that with Mitsubishi, the local conglomerate Massy and NEC are planning to build a dimethyl ether (DME) plant for product export with the usual palliative that it will offer downstream opportunities to our private sector.
The economic development plan being a joint venture with the foreign company that has the intellectual property and human resources to build and upgrade the plants in question, while we simply invest our money and our people get involved in construction, operation and maintenance. The IMF has told us that this model that operates in our energy sector does not transfer technology to locals. We create jobs not wealth generating expertise/assets.
This was CL Financial's model in methanol and is the Massy/NEC model in DME. The startling fact is that CL Financial owned shares in MHTL for many years, collected dividends/profits but our people to date cannot design and build a methanol plant and improve on the technological processes in such plants.
In fact we neglected to build the most crucial resource in the industry, the highly-skilled engineering resource. Though we may have some US$1.175 billion which we may invest in such plants, we are no better off than the technological uninformed who invests on the stock market.
Indeed the building of Pt Lisas was a recommended approach to the development of our economy and economic specialised expertise. This model (Porter's Stages of Growth) encompasses the investment stage where plants may be turnkey. However, it is important to learn the technologies, learn to upgrade the plant using state of the art techniques, then modify the plant to increase productivity, then via R&D begin to innovate and indeed create our own technologies.
South Korea stands out as the classic example of this approach. Unfortunately we had to sell the Pt Lisas plants to pay debts–similar to the suggestion that we reserve the US$1.175 billion for debt servicing.
However, what CL Financial did not do, nor will Massy/NEC do, is to go downstream of their investment into the creation of the highly skilled human resource that can take the plant or spin-off plants into upgrade, modification and subsequently innovation.
oday we own Phoenix Park Processors outright; we have bought a plant that uses well known technology. But again little thought seems to have gone into the development path for such a plant, and if it did not have one larger than taking liquids out of a depleting and drier natural gas supply, then one can question the vision, if any, behind acquiring such an asset.
If we were to shift our view to the on-shore; the major skills we possess relate to import, distribution and sales for local consumption. The question we need to ask ourselves is: can we use this comparative advantage to build enterprises that can avoid the curse of the plantation–dependence on the small local clientele and hence the foreign exchange earned by our energy sector–and create/develop companies that enlarge on this advantage but earn foreign exchange by doing new things and eventually innovation?
Instead, we see Massy building a $45 million super store to continue to import and sell to the local population–food, appliances and motor vehicles from their franchise, subject again to the energy sector foreign income. Again, our vision is at best to repeat this model regionally, we fail to imitate what others have done in distribution globally, eg Ali Baba, and even take this into new dimensions.
In general we do not see that building the most valuable asset, our human resource, is key to sustainable economic development–not a super store nor joint venture plants per se.
Mary King