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Sunday, July 6, 2025

Private sector is our only hope

by

Curtis Williams
1529 days ago
20210429

Jour­nal­ists are sto­ry­tellers and you of­ten find your­self sur­prised at the twists and turns that your sto­ry can take.

You may be­gin pur­su­ing a sto­ry and by the time you are fin­ished in­ves­ti­gat­ing it or writ­ing it, you re­alise it turned out com­plete­ly dif­fer­ent from what you had ini­tial­ly ex­pect­ed.

Last week when the Busi­ness Guardian spent con­sid­er­able space look­ing at the work and life of the late En­er­gy Min­is­ter Franklin Khan, my col­league Geisha Kow­lessar-Alon­zo pro­duced two ar­ti­cles, both of which sur­prised me.

The first was her de­tail of the his­to­ry of the En­er­gy Min­istry that made me re­alise many do not sur­vive an en­tire term in the cru­cial min­istry and that in the last 30 years on­ly the late Bar­ry Barnes and Fin­bar Gan­ga did.

The sec­ond ar­ti­cle was an in­ter­view with al­most every liv­ing for­mer Min­is­ter of En­er­gy. What sur­prised me was how all of them spoke about the tremen­dous weight they felt on their shoul­ders be­ing re­spon­si­ble for shep­herd­ing the coun­try’s pat­ri­mo­ny. For them, it was about en­sur­ing max­i­mum re­turns to the peo­ple of T&T, while man­ag­ing a sec­tor where the play­ers were a mix of multi­na­tion­al com­pa­nies, lo­cal play­ers, large state com­pa­nies and the min­istry as reg­u­la­tor.

What was even more sur­pris­ing to me was that all of the min­is­ters saw their roles in sim­i­lar ways but none talked about en­cour­ag­ing in­vest­ment and ex­pand­ing the share size of the en­er­gy pie.

Per­haps they all felt that this was a giv­en, but I want to sug­gest that it is far more a re­flec­tion of the T&T na­tion­al mind­set and re­al­ly shines a spot­light on what I feel is at the crux of at least one ma­jor chal­lenge we have in the coun­try, that of the role of gov­ern­ment and the pri­vate sec­tor.

Two of the coun­try’s great­est econ­o­mists, both Roy­alians, the late Lloyd Best and Dr Er­ic St Cyr in a pa­per ti­tled “Mod­el­ling the econ­o­my” ar­gued that the pur­pose of gov­ern­ment spend­ing is not sim­ply to dis­trib­ute wel­fare or to gen­er­ate out­put, em­ploy­ment and in­come.

It is, ac­cord­ing to Best and St Cyr, to ex­pand the pro­duc­tion fron­tier, to di­ver­si­fy pro­duc­tion pos­si­bil­i­ties and to lift the whole econ­o­my to high­er lev­els of vi­a­bil­i­ty.

“We have all along sug­gest­ed that the role for gov­ern­ment is dic­tat­ed more by the spend­ing op­tions avail­able and less by the ex­er­cise of any ide­o­log­i­cal pref­er­ence or choice.

“More­over, in the Caribbean case, house­holds must be freed from those his­tor­i­cal con­straints that have lim­it­ed con­struc­tive in­volve­ment in pro­duc­tive life and in busi­ness or­gan­i­sa­tion. We need to get be­hind such ag­gre­gates as spend­ing, sav­ing and in­vest­ment in or­der to weigh the fac­tors re­spon­si­ble for their lev­el, struc­ture and ori­en­ta­tion.

“Here again an enor­mous amount of work needs to be done to dis­cov­er rea­sons for the pre­vail­ing lop­sid­ed­ness in busi­ness in­volve­ment along lines of race, colour, class etc.”

They are ab­solute­ly right and a ma­jor er­ror of post-in­de­pen­dence T&T is the com­plete con­trol and huge hand of the state on the econ­o­my.

Whether the UNC and its sup­port­ers ac­cept it, the way in which the ma­jor­i­ty cit­i­zens view the role of the state is dic­tat­ed by our his­tor­i­cal an­tecedent, the im­pact of colo­nial­ism and yes slav­ery, but very much Dr Er­ic Williams and 30 years of un­bro­ken PNM po­lit­i­cal dom­i­nance.

You see since the 1960s and the call for the con­trol of the com­mand­ing heights of the econ­o­my, to the point where the PNM got the re­sources to sig­nif­i­cant­ly con­trol those heights of the econ­o­my the gov­ern­ment has sought to be the provider of sus­te­nance.

I do not feel it is a con­scious ide­o­log­i­cal po­si­tion, but it is one in which the state has to pro­vide and the pri­vate sec­tor is sec­ondary to the way in which the econ­o­my op­er­ates.

Yes, it is true that of­ten the coun­try’s pri­vate sec­tor has failed to raise its hands when it could have done so. How else do you ex­plain that Cli­co is the on­ly pri­vate en­ti­ty that was pre­pared to take the ma­jor risks of the en­er­gy sec­tor and al­though a lot of wa­ter has now flowed be­low that bridge, they were able, with their part­ners to build a glob­al busi­ness in methanol and am­mo­nia.

As it is with all things in life, if we are not fo­cused on some­thing it is un­like­ly that we will achieve the lev­el of suc­cess we could have, had we fo­cused on the is­sue.

The truth is if we don’t find it in our­selves to wean our­selves from the gov­ern­ment then T&T will find it­self in even deep­er trou­ble.

We have to em­brace the pri­vate sec­tor be­cause it is on­ly this sec­tor that can lead us to a bet­ter to­mor­row. We have to see that gov­ern­ment is there to fa­cil­i­tate the growth of the pri­vate sec­tor.

We must en­cour­age en­tre­pre­neur­ship, take mea­sures to make do­ing busi­ness easy. We must not see busi­ness, both lo­cal and for­eign as en­e­mies of the peo­ple.

No one is say­ing to give away the pat­ri­mo­ny, what I am ar­gu­ing for is a laser-like fo­cus on grow­ing the econ­o­my, through en­cour­ag­ing, fa­cil­i­tat­ing and pro­mot­ing in­vest­ment in the coun­try.

It is a call for a clear recog­ni­tion that this paral­y­sis of hop­ing and wait­ing for strong en­er­gy prices is doomed to fail­ure.

As a coun­try, we have to ac­cept that peo­ple are in busi­ness to make mon­ey. We have to ac­cept that com­pa­nies have a re­spon­si­bil­i­ty to their share­hold­ers to max­imise prof­its and that they must make an ad­e­quate re­turn on their in­vest­ment.

Whether a com­pa­ny is in the start-up, growth, or ma­ture phase of its life­cy­cle, it is not the gov­ern­ment’s role to say they have made enough mon­ey and there­fore seek­ing to max­imise its prof­its is some­how wrong or un­con­scionable.

It is this re­liance on the gov­ern­ment that makes peo­ple feel it is okay to nev­er pay tax­es on in­come, use all the pub­lic goods for free, and when you get to 65 col­lect a grant from the State.

How is it okay that cit­i­zens dread hav­ing to go to the pub­lic hos­pi­tals and it is com­mon that pa­tients will spend days in the A&E while wait­ing for a bed on the wards, hav­ing wait­ed hours to be seen in the first place?

It is be­cause we feel the gov­ern­ment should pay for health­care and will not em­brace re­al change in the sys­tem that leads to a na­tion­al health in­sur­ance sys­tem where we pay our fair share and not fool our­selves in­to be­liev­ing that a nom­i­nal health sur­charge should al­low us to have qual­i­ty health­care.

Many cit­i­zens have health in­sur­ance plans with the pri­vate sec­tor. Is there no way to en­sure that a pri­vate sec­tor mod­el is ap­plied to the hos­pi­tals?

What of pen­sion re­form? Sure­ly, just like many pri­vate en­ter­pris­es, state work­ers should be con­tribut­ing to a pen­sion plan which they can take with them wher­ev­er they go and where the ben­e­fits are al­so re­flec­tive of the lev­el of con­tri­bu­tion?

Just think about gov­ern­ment op­er­a­tions and how we would be bet­ter off if many things were pri­va­tised? We recog­nised that things like se­cu­ri­ty, main­te­nance, clean­ing should not be done by the gov­ern­ment and what do we do? We form a state com­pa­ny to do it.

T&T re­mains one of the 40 rich­est coun­tries in the world. Just think about that. The en­er­gy sec­tor has over the years gen­er­at­ed tremen­dous wealth for us.

As I con­clude I re­turn to the ob­ser­va­tion of Best and St Cyr, who were look­ing at the role of the off­shore econ­o­my (pro­pelled by oil, gas, petro­chem­i­cal) and the in­shore econ­o­my, which is fu­elled by the rents from the off­shore econ­o­my.

They wrote, “The Point Lisas strat­e­gy of ex­pand­ing up­stream and down­stream in­to the en­er­gy val­ue chain con­tin­ues to be of­fi­cial pol­i­cy. Not on­ly does this lat­ter strat­e­gy of re­source based in­dus­tri­al­i­sa­tion re­in­force lop-sided growth; it ac­tu­al­ly mil­i­tates against trans­for­ma­tion.

“We are of the view that with­out tack­ling head­long and si­mul­ta­ne­ous­ly the twin goals of pro­duc­tion/sup­ply en­hance­ment and in­come equal­i­sa­tion, this strat­e­gy is like­ly once again to frus­trate trans­for­ma­tion on­shore. This is so be­cause of the very na­ture of the ex­ter­nal­ly pro­pelled econ­o­my.

“Growth off­shore tends to stim­u­late main­ly satel­lite ac­tiv­i­ty on­shore. Such on­shore growth can­not sus­tain it­self and must fal­ter when the off­shore sec­tor wanes and for­eign ex­change dries up.”

We are at that place again.


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