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Sunday, July 27, 2025

It’s clear there is no economic strategy

by

Curtis Williams
1389 days ago
20211007

In a pa­per pub­lished by the Har­vard Busi­ness School the late Pro­fes­sor Emer­i­tus Bruce R Scott dealt with the idea of what is a na­tion­al eco­nom­ic strat­e­gy and why it is so im­por­tant.

Pro­fes­sor Scott sim­ply de­scribes it as a vi­sion of a de­sired fu­ture state of the econ­o­my, a time­frame with­in which that state is to be achieved, and a set of poli­cies and in­sti­tu­tions for in­flu­enc­ing the mo­bil­i­sa­tion and al­lo­ca­tion of re­sources and for pro­mot­ing their ef­fi­cient util­i­sa­tion.

For Pro­fes­sor Scott such a vi­sion must pro­vide the frame of ref­er­ence for es­tab­lish­ing pri­or­i­ties for the mo­bil­i­sa­tion of re­sources.

He said na­tion­al eco­nom­ic strate­gies are ar­tic­u­lat­ed and im­ple­ment­ed through in­sti­tu­tions. The struc­ture and cul­ture of these in­sti­tu­tions de­ter­mine in con­sid­er­able mea­sure how the strat­e­gy will be im­ple­ment­ed as well as its po­ten­tial ef­fec­tive­ness.

For Pro­fes­sor Scott a vi­sion helps es­tab­lish goals that in turn an­i­mate an eco­nom­ic strat­e­gy.

“Thus, eco­nom­ic strate­gies are based on dif­fer­ing roles and re­spon­si­bil­i­ties for the eco­nom­ic ac­tors as well as dif­fer­ing no­tions of re­source mo­bil­i­sa­tion and al­lo­ca­tion,” Pro­fes­sor Scott posit­ed.

If we dis­pas­sion­ate­ly look at the Fi­nance Min­is­ter Colm Im­bert’s 2021/22 bud­get, can we hon­est­ly say that he es­poused an eco­nom­ic strat­e­gy for the coun­try, or where it fell in a pre­vi­ous­ly ar­tic­u­lat­ed na­tion­al eco­nom­ic strat­e­gy?

If the Gov­ern­ment has a co­her­ent eco­nom­ic strat­e­gy then it is be­ing missed by many.

For sure there is a po­lit­i­cal strat­e­gy.

That strat­e­gy is to keep the pop­u­la­tion be­liev­ing that the eco­nom­ic chal­lenges that con­front us are not as grim as some of those “pseu­do in­tel­lec­tu­als and an­ti gov­ern­ment econ­o­mists” are sug­gest­ing and that it is on­ly the Row­ley ad­min­is­tra­tion that knows what is best or what is the true state of play. Af­ter all if the doc­tor say so is so.

The oth­er po­lit­i­cal strat­e­gy is to kick the can down the road for as long as pos­si­ble. So the is­sue of an over-val­ued, un­com­pet­i­tive ex­change rate should not be dealt with be­cause it will cause hard­ship on peo­ple, even though it makes the econ­o­my un­com­pet­i­tive, en­cour­ages cap­i­tal flight and hurts the very econ­o­my we are try­ing to trans­form.

We are not pre­pared to reign in our spend­ing be­cause that sig­nals the bo­gey man called the IMF that is seek­ing to cre­ate po­lit­i­cal dis­tur­bance and hard­ship for the most vul­ner­a­ble. We will do our own struc­tur­al ad­just­ment, which is no struc­tur­al ad­just­ment but rather debt fi­nanc­ing and gra­tu­itous re­duc­tions in some ar­eas.

So the po­lit­i­cal strat­e­gy is clear, but the hard work of eco­nom­ic trans­for­ma­tion, the need as pro­fes­sor Scott not­ed for in­sti­tu­tions to al­so be trans­formed to en­sure they can car­ry out the strat­e­gy is ab­sent.

I wrote last week that we should not be hope­ful that the Min­is­ter of Fi­nance would chart a course for­ward. I made the point that in some ways Min­is­ter Im­bert was be­ing asked to car­ry too much re­spon­si­bil­i­ty of what we need to do as a coun­try.

I called on the min­is­ter to pay close at­ten­tion to the is­sue of trans­fers and sub­si­dies. It is true that Gov­ern­ment in­tends to al­low peo­ple to pay the eco­nom­ic price for wa­ter and elec­tric­i­ty but if that is the case how do you im­ple­ment such a mea­sure with­out a guar­an­tee of an ad­e­quate and re­li­able sup­ply of wa­ter in par­tic­u­lar, and few­er dis­rup­tion of elec­tric­i­ty.

Min­is­ter, the rea­son I sug­gest­ed last week that at­ten­tion be paid to the ex­pen­di­ture side of the bud­get is be­cause if we have a strat­e­gy that says we must get val­ue for mon­ey, we must cut out the cor­rup­tion and cost over­runs in projects. We must do fea­si­bil­i­ty stud­ies be­fore we build a new air­port ter­mi­nal in To­ba­go, or port in To­co, this will help us get more things done with the same ex­pen­di­ture. It is not about gen­er­at­ing more rev­enue in this in­stance. It is about the more ef­fi­cient use of our re­sources. It is not im­pos­si­ble to do, it is not about rein­vent­ing the wheel. The gov­ern­ment did it al­ready with the Curepe in­ter­change and scored po­lit­i­cal points, why not do it across the board and score eco­nom­ic points?

You see Min­is­ter Im­bert pol­i­tics is nev­er good eco­nom­ic pol­i­cy.

The mea­sures an­nounced to en­cour­age digi­ti­sa­tion and grow the Fin­tech econ­o­my is a start but even in that the Gov­ern­ment seems to be hedg­ing its bets. Min­is­ter this is the fu­ture of our econ­o­my and we have to see it as a broad­er strat­e­gy of eco­nom­ic trans­for­ma­tion .

You have not ar­tic­u­lat­ed a strat­e­gy, but trans­for­ma­tion of the econ­o­my could look some­thing like this.

Let us say we want tourism to be part of our eco­nom­ic trans­for­ma­tion. We have se­lect­ed tourism be­cause it will earn for­eign ex­change and has the po­ten­tial to cre­ate sig­nif­i­cant em­ploy­ment. There are re­al for­ward and back­ward link­ages, agri­cul­ture, mar­ket­ing, per­for­mances, tour op­er­a­tors, taxi and trans­porta­tion gen­er­al­ly, me­dia you name it. Gov­ern­ment earns tax­es, it al­lows the na­tion­al air­line to make mon­ey, re­duces sub­si­dies on air­craft seats in To­ba­go and com­bined with do­mes­tic tourism could be sus­tain­able all year round. It is part of the strat­e­gy for earn­ing sig­nif­i­cant rev­enue and forex from mul­ti­ple sources and at­tract­ing both do­mes­tic and for­eign in­vest­ment.

But if we see tourism as mere­ly build­ing a ho­tel and not a strat­e­gy of en­cour­ag­ing those link­ages and max­imis­ing re­turns then we are do­ing our­selves a dis­ser­vice. We must ar­tic­u­late it and we must cre­ate the en­abling en­vi­ron­ment for the pri­vate sec­tor to in­vest in it, to have con­fi­dence it is a work­able plan and that we are com­mit­ted to it in the short, medi­um and long term.

What we have had from this gov­ern­ment is a strat­e­gy, which is no re­al strat­e­gy, of hop­ing oil and gas prices re­bound.

The Min­is­ter told the Par­lia­ment that “in 2020 and ear­ly 2021 a ma­jor lo­cal gas pro­duc­er en­coun­tered un­ex­pect­ed tech­ni­cal dif­fi­cul­ties re­sult­ing in a sub­stan­tial de­cline in gas pro­duc­tion. Such mat­ters are out­side of our con­trol.”

This is the same min­is­ter who tried to rub­bish the alarm raised by the Busi­ness Guardian when it broke the sto­ry two years ago, claim­ing it was on­ly one well. Well time is longer than twine and here we are call­ing it tech­ni­cal dif­fi­cul­ties rather than what it is, a re­al­i­sa­tion that the amount of gas ex­pect­ed was just not there.

The Fi­nance Min­is­ter al­so said he en­vis­ages a re­bound in oil and gas pro­duc­tion dri­ven by new dis­cov­er­ies with oil pro­duc­tion ris­ing from 64,859 bar­rels per day in 2021 to 86,163 bar­rels per day by 2022 and gas pro­duc­tion from 2,773 MM­scf per day in 2021 to 3,368 MM­scf per day in 2022, sta­bil­is­ing there­after at 3,600 MM­scf.

He added that amid the strength­en­ing glob­al re­cov­ery oil prices and ex­pect­ed to rise close to 60 per­cent above their low base in 2020. The av­er­age price of oil was US$41.29 per an­num in 2020 and is pro­ject­ed by in­ter­na­tion­al in­sti­tu­tions to rise to US$64.68 in 2021 and to US$66 in 2022-2024.

Min­is­ter, I can tell you to­day that your pro­duc­tion num­bers are wrong and T&T’s crude pro­duc­tion will not av­er­age more than 75,000 bar­rels of oil per day next year. Its gas pro­duc­tion will not av­er­age more than 3.1 bcf/d and even that is a stretch. You have been con­sis­tent­ly wrong on those num­bers and I have con­sis­tent­ly had to en­cour­age you to face the facts that those pro­jec­tions are not cor­rect. Per­haps if you look at the bpTT num­bers that I shared with the coun­try some weeks ago it may help in­form a more con­ser­v­a­tive ap­proach.

In clos­ing I think the Min­is­ter of Fi­nance and the Min­is­ter of Every­thing Stu­art Young should con­sid­er what the for­mer coun­try man­ag­er of BHP in T&T had to say about en­er­gy tran­si­tion and how bru­tal it is like­ly to be.

It is why I have con­sis­tent­ly ar­tic­u­lat­ed a dis­ap­point­ment in the fail­ure of the min­istry to have bid rounds. Per­haps they will lis­ten to Vin­cent Pereira be­cause to this Gov­ern­ment the mes­sen­ger is more im­por­tant than the mes­sage.


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