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Thursday, July 24, 2025

The anatomy of underachievement

by

20140410

A Re­view of Ter­rence Far­rell's

The Un­der­achiev­ing So­ci­ety: De­vel­op­ment Strat­e­gy and Pol­i­cy in Trinidad & To­ba­go, 1958-2008.

The mem­o­ries of the last few decades of Trinida­di­an eco­nom­ic his­to­ry live on in the pop­u­lar imag­i­na­tion, in the words "oil boom," "squan­der­ma­nia," "all ah we tief," "white ele­phant," "state en­ter­prise," "de­pen­den­cy syn­drome" and so on.

And for many peo­ple more than 45, much of Ter­rence Far­rell's book, The Un­der­achiev­ing So­ci­ety: De­vel­op­ment Strat­e­gy and Pol­i­cy in Trinidad & To­ba­go, 1958-2008, has giv­en those hazy out­lines so­lid­i­ty. He has pro­vid­ed a sub­stan­tial, well-doc­u­ment­ed, eco­nom­ic his­to­ry from the pre-in­de­pen­dence pe­ri­od to the present, if not the mo­ment.

If this sounds like faint praise, it's not. The achieve­ment is con­sid­er­able. Dr Far­rell brings a clin­i­cal eye from his years as a tech­no­crat in the Cen­tral Bank to pro­vide an in­sid­er's knowl­edge of the phe­nom­e­na (eco­nom­ic pol­i­cy and plan­ning). His pri­vate-sec­tor knowl­edge pro­vides a plat­form to as­sess the ef­fec­tive­ness of the pol­i­cy. And it's all backed up by da­ta to lay out a co­her­ent ac­count of the pe­ri­od, which, to put it mild­ly, was chaot­ic.

(It's worth not­ing, in pass­ing, that an­oth­er ac­count of these events ex­ists in for­mer PNM min­is­ter Wen­dell Mot­t­ley's 2008 book Trinidad & To­ba­go In­dus­tri­al Pol­i­cy: 1959-2008.)

The half-cen­tu­ry of Far­rell's book is di­vid­ed in­to four pe­ri­ods, not in­clud­ing the colo­nial era: the pre- and post-in­de­pen­dence strat­e­gy of im­port sub­sti­tu­tion; the post-oil boom "re­source-based" in­dus­tri­al­i­sa­tion; the "lost decade" post-oil-boom; and the present phase, which be­gan in 1993–the "ne­olib­er­al phase," where lo­cal eco­nom­ic im­per­a­tives are sub­or­di­nate to the "Wash­ing­ton con­sen­sus" ar­tic­u­lat­ed through var­i­ous multi­na­tion­al agen­cies, like the World Bank, IMF, and IDB.

The over­all re­sult is what every Trinida­di­an knows, and what Dr Far­rell states diplo­mat­i­cal­ly: we've un­der­per­formed, com­pared to com­para­tor coun­tries Bar­ba­dos, Sin­ga­pore and Nor­way.

The route to the un­der­per­for­mance is sur­pris­ing­ly inane. From the start of the in­de­pen­dence pe­ri­od, eco­nom­ic plan­ning seemed to be unin­spired. De­spite Er­ic Williams' much-vaunt­ed na­tion­al­ist re­jec­tion of colo­nial era ideas and poli­cies, "the PNM's eco­nom­ic pro­gramme dif­fered from those of its pre­de­ces­sors on­ly in the ex­tent and vigour of its in­tend­ed in­dus­tri­al­i­sa­tion pro­gramme."

Far­rell traces the post-in­de­pen­dence con­cep­tion and con­fig­u­ra­tion of the econ­o­my through the plans for­mu­lat­ed and ar­tic­u­lat­ed through the gov­ern­ment plan­ning ap­pa­ra­tus. Though the plans did change their con­cep­tions of the econ­o­my at the end of each five-year pe­ri­od, plan­ning was con­sis­tent­ly in­ef­fec­tu­al, and by 1973, "the econ­o­my was on the brink of col­lapse."

It was from the oil price shock of 1973 that a new par­a­digm emerged: "re­source-based in­dus­tri­al­i­sa­tion," and plan­ning was ef­fec­tive­ly aban­doned. An­oth­er way of say­ing this is that eco­nom­ics was de­sert­ed for po­lit­i­cal eco­nom­ics–re­sources were de­ployed not for their eco­nom­ic ben­e­fit, but their po­lit­i­cal val­ue.

This meant, post-1970, in re­sponse to Black Pow­er and the wide­spread so­cial un­rest, that the gov­ern­ment be­gan ac­quir­ing for­eign as­sets, like oil com­pa­nies, banks, and oth­er en­ter­pris­es to take the "com­mand­ing heights of the econ­o­my."

It was a com­plete re­ver­sal of its pre­vi­ous pol­i­cy; in­stead of en­cour­ag­ing for­eign in­vestors, the gov­ern­ment de­cid­ed to en­ter in­to busi­ness in the na­tion­al in­ter­est.

Be­tween 1973 and 1983, writes Far­rell: "Gov­ern­ment in­ject­ed $1.6 bil­lion in­to eq­ui­ty par­tic­i­pa­tion in var­i­ous en­ter­pris­es...an­oth­er $2.2 bil­lion was in­ject­ed as loans...a fur­ther $2.6 bil­lion was in­ject­ed as 'ad­vances' and $858 mil­lion as sub­ven­tions."

Re­sults of 'wealth re­dis­tri­b­u­tion' still haunt us

The main ben­e­fi­cia­ries were Ca­roni Ltd, Is­cott and BWIA. It is in this pe­ri­od as well that the na­tion­al habit of "trans­fers and sub­si­dies," po­lite lan­guage for "wel­fare," be­came en­trenched in­to the na­tion­al eco­nom­ic cul­ture.

This in­clud­ed ex­trav­a­gant pay ad­just­ments for the var­i­ous arms of gov­ern­ment thanks to union mil­i­tan­cy.

The re­sults were pre­dictable, and live with us still. The "re­dis­tri­b­u­tion" of the wealth en­cour­aged prof­li­gate con­sump­tion, dis­cour­aged pro­duc­tiv­i­ty, and bred cor­rup­tion in a be­wil­der­ing va­ri­ety of ways.

This led di­rect­ly, in the mid-1980s, in­to the arms of the IMF, aus­ter­i­ty, and much pain.

The NAR gov­ern­ment was the main ve­hi­cle of this aus­ter­i­ty, and was be­set by ex­tra­or­di­nar­i­ly bad luck, capped off by the 1990 coup at­tempt, from which it nev­er re­al­ly re­cov­ered.

From this "lost decade" (1982-1993) of eco­nom­ic stag­na­tion came the emer­gence of a "gold­en age" when the coun­try ex­pe­ri­enced 15 years of un­in­ter­rupt­ed eco­nom­ic growth.

This was not so much re­sult of plan­ning as of fol­low­ing the dik­tat of the Wash­ing­ton con­sen­sus, which was true of all gov­ern­ments af­ter the NAR. The on­ly evo­lu­tion in eco­nom­ic plan­ning be­tween 1995 and the present, writes Far­rell, was the PNM's Vi­sion 2020, in which he was in­volved.

Vi­sion 2020 was, in Far­rell's es­ti­ma­tion, an ad­mirable ini­tia­tive.

But it was ham­strung from the start by a lack of re­li­able da­ta, es­pe­cial­ly from the gov­ern­ment sources like the CSO, the gen­er­al lack of ca­pa­ble per­son­nel, in the with­draw­al of the par­tic­i­pa­tion of key gov­ern­ment plan­ning fig­ures (like Calder Hart and Ken Julien), and sab­o­tage by the pub­lic ser­vice.

He writes: "The pub­lic ser­vice was nev­er quite com­fort­able with the in­ti­mate in­volve­ment of pri­vate-sec­tor and uni­ver­si­ty per­son­nel...and worked to re­cap­ture con­trol."

And this in­tan­gi­ble causative fac­tor–the cul­ture of the pub­lic ser­vice and its role in stymy­ing na­tion­al de­vel­op­ment–leads to an in­trigu­ing mo­tif in the work: in­tan­gi­ble cap­i­tal's re­la­tion to con­ven­tion­al eco­nom­ics.

From the out­set the ori­en­ta­tion of the work is or­tho­dox–re­ly­ing on the­o­ry, da­ta, and aca­d­e­m­ic analy­sis. Yet in­tan­gi­bles ob­trude reg­u­lar­ly.

It seems clear that be­hind the da­ta lie sig­nif­i­cant cul­tur­al and so­cial con­nec­tions to eco­nom­ics–Far­rell clos­es the book ac­knowl­edg­ing eth­nic strife, the Car­ni­val men­tal­i­ty, and oth­er cul­tur­al fac­tors as im­por­tant.

He men­tions the so­cial chaos of the 60s and 70s, the mil­i­tan­cy of trade unions, and the na­tion­al at­ti­tudes and cul­ture which seemed to be de­vel­op­ing as di­rect foils to the de­vel­op­ment agen­da.

These (so­cial and cul­tur­al) is­sues have a place in con­tem­po­rary or­tho­dox eco­nom­ics, which has con­ced­ed that Gary Beck­er's con­cep­tion of "ho­mo eco­nom­i­cus" is in­ad­e­quate to de­scribe and analyse eco­nom­ic phe­nom­e­na.

The sci­ence has drift­ed to ac­com­mo­date econ­o­mists like Amartya Sen and George Ak­erloff's con­cep­tion of "iden­ti­ty eco­nom­ics," which fac­tors in the in­tan­gi­ble el­e­ment in the equa­tions.

The World Bank, the bas­tion of or­tho­doxy, has ac­knowl­edged the for­mu­la­tions of so­cial cap­i­tal and in­tan­gi­ble wealth. In­deed, Arthur Lewis, an­oth­er ghost haunt­ing the book, ex­plic­it­ly stat­ed this in 1961–the ne­ces­si­ty of de­vel­op­ing an ap­pro­pri­ate at­ti­tude to en­able eco­nom­ic trans­for­ma­tion.

In his own rec­om­men­da­tions for en­abling de­vel­op­ment, Far­rell vir­tu­al­ly echoes Lewis as he writes: "De­vel­op­ment and trans­for­ma­tion re­quire hard work from a dis­ci­plined and fo­cused peo­ple." This is from his fi­nal chap­ter, which bears the ti­tle of the book, where these is­sues are ad­dressed di­rect­ly.

By any mea­sure, The Un­der­achiev­ing So­ci­ety is a valu­able work. It sur­veys a half-cen­tu­ry, and achieves its aim of pro­vid­ing a sub­stan­tial, ac­ces­si­ble out­line.

It al­so pro­vides much po­ten­tial for trib­u­tary works, which ex­pli­cate the un­lit cor­ners of the past, the opac­i­ty of which is per­haps the great­est block to na­tion­al de­vel­op­ment.


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