Trevor Sudama
In my column of 16/11/18 I stated that, given the country’s current recessionary situation and substantial job losses, it was the Government’s responsibility for the moment to do all in its power to preserve jobs and not add to the mounting level of unemployment with its deleterious social consequences.
I did not advocate that Government’s use of energy sector revenues for the purposes of job preservation should be a permanent feature of the socio-economic landscape. I emphasised that a pointed failing of governments was their inability to take measures to place jobs on a more sustainable footing and the unwillingness to embark upon and facilitate a meaningful programme of diversification for job creation, among other things.
One prolific commentator has construed my remarks to mean the retention of transfers and subsidies in perpetuity to maintain jobs which reflects little concern for economic efficiency or profitability. Another has recommended that all those employed in the inefficient state sector should be sent home immediately with some retrenchment funds so that they can create real jobs. If implemented, tens of thousands would have to join the legions of the unemployed with only a very few able to become self-employed entrepreneurs. One must question whether such a recommendation is either realistic or feasible.
Given the precarious employment situation, my suggestion was at that all avenues should be explored to utilise current resources instead of allowing them to go idle by abrupt cessation of activities. Consequently, it was my view that restructuring of the operations of the Petrotrin Refinery aimed at viability in the short to medium term was a preferred option. However, such a course would have been the more difficult alternative for the Government. The much easier decision was immediate closure, the full costs of which are yet to be assessed.
History should serve as a warning. In the case of Caroni (1975) Ltd, Patrick Manning, having won the general election in late 2002, proceeded post-haste in the following year (2003) to abruptly shut down the company and retrench all 6,000 employees. According to Minister of Agriculture Clarence Rambharat, the closure cost “the taxpayers of this country…$18 billion” (Express 22/2/17). This figure is incidentally more than one-third of the current national Budget.
The vast majority of retrenched workers were unable to find jobs with even minimum wages. Many found no jobs at all. Families and communities faced enormous financial difficulties. The overwhelming number of two-acre plots distributed to ex-sugar workers remained uncultivated with some being transferred for non-agricultural purposes. Thus, there was a huge wastage of agricultural resources of land. Workers accustomed to being employees could not be transformed into agricultural entrepreneurs. The decline of the agricultural sector continued apace and today constitutes a mere 0.4 per cent of GDP. The food import bill remains in excess of $5 billion and the fiscal deficit has not improved.
It is obvious that hardly anything positive was achieved by the closure. The question must be asked whether the country could have had a more productive and diversified agricultural sector today if much of the $18 billion was invested in non-sugar agricultural infrastructure, appropriate technology for agro-industry, innovation, research and development, commercialisation of new products and re-training and re-deployment of the majority of workers of Caroni (1975) Ltd.
We now come to the question of how does a Government proceed from a precarious present to a viable future. In other words, how does it move from action necessitated by the urgency of the moment to a desirable state of affairs in the medium to long-term in which profitable enterprises and efficient organisations are the norm. This outcome will neither be realised with the wave of a magic wand nor achieved overnight. The adoption of appropriate strategies, policy measures, and programmes to be pursued in the interim will, of course, be required. They will provide the framework for the physical and social infrastructure projects to be implemented and the incentive and support facilities to be established. There is also the requirement to focus on what is to be done in the present to prevent in colloquial terms “the horse from starving while the grass is growing”.
If there are things that can be done immediately they should be identified. One of the first initiatives should be to ascertain whether there are existing businesses with the potential to expand preferably into foreign markets and what support measures are required. Similarly, it would be necessary to know those businesses with the capacity to produce for the local market to displace foreign items.
Then there was the advice of the former chairman of the Economic Development Advisory Board that Government should immediately re-order its priorities for investment by focusing on infrastructural projects for the areas identified in the diversification thrust ie, manufacturing, tourism, maritime, creative industries, ICT, financial services etc.