The late Prime Minister Patrick Manning had a saying that Tobago gets what it wants.
This was often said in the context of the PNM being in central government in Trinidad during the 2001 to 2010 period and the Orville London Tobago Council also being in charge for most of that time.
The two Tobago seats have become bellwether seats, often voting for the winners in central government elections and crucially providing a path for the ruling party to a general election victory.
It is this, more than even the control of the THA, that has given the island so much political sway and the acknowledgement by the two major political parties that when it comes to Tobago nah trouble trouble, trouble nah trouble you.
In this context the PNM has been prepared to acquiesce as far as it can to the dictates of the 70,000 people on the island, acknowledging that being separated from Trinidad in the unitary state, there are special developmental needs, but also accepting it carries the risk that failure to give Tobago whatever it demands could result in electoral disaster.
For the UNC, a party that has its base in the East Indian population, there is fear that objecting to the demands of Tobago could be seen through the lens of race. Tobago having a population dominated by people of African origin. It is why the UNC does not contest the two seats, hoping to enter through the back door by curry favouring with whoever is in government.
I have taken the time at the start of this article to put into context some of the political issues that drive some of the economics in the relationship between T&T.
This is crucial because while the Tobago Amendment Bill remains stuck in the Lower House there is a raging debate about the future role of Tobago in the union.
The Amendment Bill deals with many of the proposed legal and political arrangements between the two islands. I do not propose to deal with these issues since my focus is on the economic matters, but these are very important variables in determining the economic relationship between Tobago and Trinidad.
Under the present arrangements, the Tobago House of Assembly gets by law at least 4.03 per cent of the national budget. This is usually somewhere around $2.3 billion. The proposed legislation will lift that minimum about to over six per cent and some back of the envelope calculations suggest that would add at least another $1 billion a year to the THA’s annual allocation and unless the country generates more revenue it essentially means one billion less to spend in Trinidad.
There is much to be said about that in terms of whether those financial arrangements are being put to use in the best way, whether Tobago’s infrastructure is significantly better than areas like La Brea, Mayaro, Rio Claro, Tabaquite, all areas that produce oil and gas that gives the government and country so much of its resources which is then transferred to other parts including Tobago.
We must ask whether it is okay for the THA to spend so much money on recurrent expenditure by keeping 60 per cent of the local workforce employed. This has the impact of having the majority of Tobagonians seeking and holding on to a THA job. It is a drain on the revenues of the THA and it also leads to the crowding out of the private sector’s access to labour and has the impact of distorting the labour market.
This issue is even more important especially when you consider the rumblings in Tobago and the suggestion by at least one political entity that has made it clear it wants a two-state development for Tobago and Trinidad.
The People’s Development Party (PDP) has a flyer circulating in Tobago that suggests the need for one Union but two states and highlights what it sees as Tobago’s waters.
There has been a lot of misinformation perpetrated by some people in Tobago that the island’s economic performance would be significantly improved if its waters were recognised and that the $2 billion-plus net transfers to the island is a misunderstanding since it is ‘Tobago waters’ that a lot of the natural resources are located.
It is true that some of the country’s recent discoveries are closer to Tobago than Trinidad and in particular north of Tobago in the deep water.
The latest are BHPs Calypso field, Shell’s Colibri development TTDA 3&7 and the NCMA development.
What worries me is some of the leading players in Tobago, particularly those supporting the Opposition PDP, have sought to fool, yes fool the people in Tobago about resources.
Can you imagine that the PDP’s flyer is suggesting that these resources are in excess of $180 trillion? That is more than 10 times the size of the entire US economy.
So the PDP, which is supposed to be a serious political party with significant supporters including some Tobago economists who I often hear speak on Energy and are neither energy experts or are clearly out of touch with the reality or the economics of the energy financial models.
The Tobago population must know that the suggestion that Calypso or any other gas development means utopia is just not on the cards.
Are there any discussions about the significant capital costs to build out the infrastructure for Calypso? Is there any discussion about the need to recover the sunk costs in the exploration programme that led to the discovery? What price will the gas be sold at and what will be the taxes or profit under the PSC. It must be understood as a frontier development, government’s take is lower under the terms of the PSC. We have to ensure that in Tobagonians making decisions about their own future in this still unitary state that they are aware there are consequences.
The notion that has been espoused by former Chief Secretary Hochoy Charles that Tobago’ internal self-government is for Tobagonians alone is not sustainable. Independence maybe, but once Tobago is going to get money from the treasury it’s a matter for the entire country and Tobago cannot always get what Tobago wants.