The only certainty in business is uncertainty. This truism can also be applied to the local and global economy.
Ruchir Sharma, of Morgan Stanley, and author of the book, Breakout Nations: In Pursuit of the Next Economic Miracles, says that we have had a global recession every seven to eight years for the last 50 years. If Sharma is right then we are due for one in 2016.
Looking at the two most recent examples, in 2008 there was the sub-prime mortgage crisis in the USA and before that there was the early 2000's global recession.
The latter was a product of the slowing down of Asian economies, the dot-com bubble, the 9/11 attacks and corporate scandals such the Enron bankruptcy. To compound Sharma's idea of the "seven-year itch," renowned economic historian Niall Ferguson argues, in a March 2010 Foreign Affairs article that the more complex the world becomes the more likely it is to experience incidents of collapse.
In an environment of constant global change and increasing complexity, how do businesses and countries plan? Every year old models and assumptions are being rendered irrelevant. Indeed entire businesses are being rendered irrelevant. Does anyone remember a company named Kodak?
What about Nokia and Ericsson who once dominated the mobile phone business before Apple and Samsung? In T&T, companies in the retail clothing business are being hit hard by Amazon. Soon our local malls may consist only of offices, hair salons, food courts and groceries.
Take for example the LNG industry. T&T has been exporting LNG since 1999. The emergence of the local LNG industry in the 1990s and its expansion from one train to four trains is largely responsible for our current-day prosperity. In 1992 T&T predicated its decision to go into the LNG on the assumption that the USA would need to import natural gas (as LNG) to meet its growing energy needs.
Fast forward 24 years to 2016. Last week history was created in the USA when a cargo of LNG was loaded at Cheniere's Sabine Pass facility in Louisiana. That cargo was sold to Petrobras and exported to Brazil. If ten years ago someone had stood up at an energy conference in Port-of-Spain and said that in 2016 the United States would export LNG from the "lower 48" states to Brazil, that person would be labelled insane. The global energy order has changed.
Some in T&T have expressed worry over the fact that the USA has moved from LNG customer to LNG competitor. Naysayers have suggested that America becoming an exporter of LNG spells doom for us. This is far from the truth.
T&T's LNG will always have a place in the world and will always attract customers. At the heart of our LNG story is a lesson of competitiveness which speaks to cost leadership.
The four trains in Point Fortin were built at an average cost of US$250 per tonne of liquefaction capacity.
This makes them among the lowest cost facilities in the world.
New LNG facilities like the ones being built in Australia can cost over US$1,500 per tonne of liquefaction capacity.
Atlantic has also developed a reputation for reliability and safety that is unsurpassed. For these reasons the T&T LNG industry will survive the American LNG onslaught.
It's hard to predict the future business environment in three to five years. We can only come up with scenarios.
What is the next major disruption to the world's energy system? Certainly there must be something lurking around the corner. If the Austrian economist Joseph Schumpeter were alive he would be smiling.
Schumpeter wrote of the idea of creative destruction and surmised that "the process of industrial mutation that incessantly revolutionises the economic structure from within, incessantly destroying the old one, incessantly creating a new one." Schumpeter would not be surprised by the application of technology in the oil and gas industry through 3D seismic, the improvements in processing capacity and the application of horizontal drilling and hydro-fracking. Science and technology have been the great change agents of the last 200 years. This will only intensify.
The global economic roller coaster is now taking a big plunge downward. It will eventually head back upward.
We are actually one of the last countries to feel the pain from what is happening globally as a result of falling oil prices.
In other oil-producing provinces there is a lot more pain. I can think of the Scottish North Sea, Nigeria, Ghana, Indonesia and Venezuela.
T&T must however prepare itself for a roller-coaster world over which we have little or no control. Such thinking must inform business and national economic planning.
This is a time for new ideas and new thinking about the economy. It is a time for the universities, private sector, labour and government to step up.
It is a time for collaboration not conflagration. It is a time for cautious optimism and not old-school economic pessimism.
n Kevin Ramnarine is a former Minister of Energy of Trinidad and Tobago