T&T has become a country where many are afraid to express a view for fear of being branded a political operative of either the ruling People’s National Movement or the Opposition United National Congress.
I see it all the time as people, often with influence in the society, call me or message me saying they like my BG View and that I am saying exactly what they want to, but they prefer to remain silent for fear of the public attack that will follow because of the PNM and UNC trolls on social media or directly from the Prime Minister or his other ministers.
I do not deny that it is a real concern for we have seen a playbook that says if you disagree with me or my government, then you are persona non gratis and the weight of the State must be trained on you.
It is a kind of self-censorship that works for some as they are able to benefit from government-promoted economic activity, while quietly abhorring the performance of the ruling party or the senselessness of the Opposition.
But the time is quickly coming, if it is not here already, where we will see the error of our ways, because it is only through strong, and more importantly, astute and collaborative leadership, that will we have a chance of first digging ourselves out of the economic morass and then looking to the future of an economy that recognises our main source of income will soon be gone.
I wish I could have said that the decisions of the Government have limited impact on the economy, as businesses and entrepreneurs will do what they have to in an effort to grow and expand their enterprises. But in a country where the Government and its state enterprises squeeze the life out of the private sector and do not see themselves as facilitators of growth, we have a real challenge.
Last week, the Central Bank released its latest monetary policy report in which it looks at the domestic and global economy.
As can be expected, the report is slightly dated because it focuses to a large measure on the performance of the economy in the fourth quarter of 2020. It does, however, provide some preliminary data for the first quarter in 2021 in terms of the energy sector.
The Central Bank told us that in the fourth quarter of 2020, real economic activity contracted by 9.0 per cent (year-on-year). The energy sector was hardest hit, falling by 20.9 per cent due to broad-based contractions, while activity in the non-energy sector slipped by 2.2 per cent.
During the fourth quarter of 2020, natural gas supply constraints and, to a lesser extent, the dampening effect of the pandemic on demand for energy products, led to double-digit declines in activity throughout the domestic value chain.
The Central Bank noted that the mining and quarrying sector registered a 19.3 per cent year-on-year decline, with natural gas and crude oil production contracting by 27.5 per cent and 5.0 per cent respectively.
The declines in the upstream energy sector, it said, impacted the May 2020 - May 2021 Refining sub-sector, where activity fell by 39.7 per cent due to a 42.4 per cent collapse in liquefied natural gas (LNG) production and a 29.9 per cent fall in production of natural gas liquids (NGLs).
Uncertainties surrounding the continued supply of natural gas to Atlantic LNG’s Train 1, given that its long-term contract (20-year) ended in 2019, exacerbated the decline in activity in the LNG industry during the fourth quarter.
It said: “Data for the first four months of 2021 pointed to a deterioration in energy output compared to the same period of 2020. Natural gas output between January to April 2021 declined by 20.6 per cent.
The decline in natural gas production filtered through to the midstream sector, with NGLs and LNG production falling by 22.3 per cent and 37.5 per cent, respectively. The large drop in LNG output came about as the limited availability of natural gas resulted in Atlantic Train 1 being taken down at the end of December 2020.”
To be clear, the continued lockdowns caused by the COVID-19 virus and the relatively low rates of vaccination in T&T are responsible for some of the pain that the economy has faced in the last year, but the fundamentals have been weak and therefore, it is those very fundamentals that make it so hard to see how we get out of this unscathed.
What are those fundamentals? Well firstly, the energy sector has been suffering from under-investment caused by the fact that this is a mature province and therefore the discoveries are not large, as can be seen in other provinces like Guyana.
Secondly, the underinvestment during the 2005-2012 period in natural gas exploration and development has resulted in major gas shortages, the likes of which we are experiencing today. This has had a knock-on effect on the LNG and petrochemical sectors, which have also suffered in recent years from low commodity prices and high domestic gas prices.
The success of the offshore sector has always driven the onshore sector and this has not changed for at least 30 years. In other words, we have not changed the fundamentals of our economy.
So, we have a situation where, in a relatively high-priced commodities environment, low oil and gas production means we are unable to fully benefit from the upswing in prices.
In the last 15 years, this country has failed to add any real source of new income streams and neither the Government nor the Opposition has come to the country to promote a way forward.
The Opposition Leader’s crude joke of having four jabs for the economy, inviting us to once again throw money behind the Petrotrin refinery, is almost as bad as the quarter billion dollars the NGC and Government have thrown down the drain behind Train 1.
The constant formation of committees to find solutions which you then ignore and do your own thing, is the playbook of the Government. The Prime Minister told a media conference that a lot of thought is going into building back better, but he is mum on the progress of the hard work done by the Recovery Committee.
We need the kind of leadership that will show us the way forward at a time when the world prepares to meet in the UK to be even more bold on the climate agenda. We must have leadership that allows our country to not just play its part in achieving the net zero carbon goals but helps us accept life beyond oil and gas.
Leadership that lets us know there are other industries that we can develop so that the CSEC and SEA students have a chance to live in a country that can give them a future and not one that leads to a fall in the present standard of living as is predicted in the Jupiter study.
We need leadership that is serious about pension reform, about allowing the private sector to lead the growth, about doing the hard work of economic transformation and one that does not see the be all and end all of politics as being elected to office.