A cursory examination of the industrial development of this country has shown that for the last 60 years, there have been major structural shifts in this country's revenue generators that occur in approximately 25-year cycles. In the late 1950s and early 1960s this country moved from being predominantly agricultural-based to one of oil and energy with the coming of the United States energy giant Texaco.
Then, fuelled by an influx of revenue from high energy prices in the 1970s, the Point Lisas Industrial Complex, under the direction of Prof Ken Julien, took shape in the early 1980s. Then, in the late 1990s, we had the development of Atlantic LNG, a world class leader in LNG production.
As can be seen, these are all major revenue earners that resulted in the unlocking the economic potential of our country. Also of note is the cyclic nature of these 25-year cycles. The developments usually rode in on a wave of high energy prices, came to fruition and went through periods of low energy prices which the industry withstood within the 25-year cycles. This is just a characteristic of the energy industry.
Prices go up, prices come down, but the industry, once the margins are sufficient, could survive over the long term.Also of note is that the industry benchmark for the useful life cycle analysis of large energy projects is 25 years.
But why make mention of this 25-year cycle? If this is true, the next 25-year cycle for development is due in the next couple of years (late 2020s). Sod should have been broken already or if not, the corporate event to do so should be in the planning stages.
But, from all indications, have we even identified this industry that would cause a step increase in our revenue-earning potential? It appears not.
In hindsight, the Manning administration may have been on the right track with the Point Fortin development, however it was badly executed, articulated and planned. They probably understood the need for major industrial development every 25 years or so, but didn't evaluate cleaner and more environmentally friendly options.
In the end it was shut down for not ticking all the right boxes while planning. We are at the crossroads of a major economic period of our country's history. Could we diversify sufficiently fast enough to be in sync with our 25-year cycle? Probably not, but we need to immediately start the process.
Can we develop another energy industry to carry us another 25 years sufficiently fast enough? These are the hard questions that need answers now. We are at crucial juncture indeed.
Steve Seetahal,
Fulbright Scholar in Economics