Mariano Browne
Economic development and economic growth do not mean the same thing. Economic growth is measured in quantitative financial terms such as an increase in national output or real national income. Real national income is adjusted for inflation to measure real purchasing power. Economists and statisticians tend to concentrate on inflation-adjusted numbers or real output as it gives a more nuanced understanding of the strength of an economy’s improvement and how householders are doing. This type of analysis is often “politically inconvenient” and explains why politicians tend to quote revenues in dollar terms.
For example, the 2022 GDP (a rough calculation of national income) is significantly higher than any year since 2016. According to the Energy Ministry’s Consolidated Monthly Bulletin (November 22) average daily natural gas production was 2.7 billion cubic feet a day (2.7bcf/d) compared to 2.6 bcf/d in 2021, 3.04 bcf/d in 2020, and 3.6 bcf/d in 2019. In 2022 T&T is producing 25 per cent less than in 2019, but taxation revenues are significantly higher because world energy prices are higher. The finance minister, therefore, says the economy is better and has emerged from the depression (a multiyear recession) of 2015-2021.
High energy prices are to be celebrated. But prices decline as easily as they rise. This country’s economic history has been a roller coaster ride of high energy prices and changing output; boom followed by depression followed by boom followed by depression. It explains the jerky nature of expenditure on construction-type activity posited as development. But buildings only give the appearance of development. A country’s real strength comes from the creativity and intelligence of its citizens and their ability to adjust, adapt and overcome challenges.
Economic development, therefore, is multidimensional. It refers to both quantitative (income growth) and qualitative change (improved living standards) and incorporates the processes and policies by which a country improves the social, economic and political well-being of its people. Therefore, whilst it is important to have income growth, how the income is used is more important.
This explains why development must be guided by a plan to coordinate the moving parts by establishing priorities. This is a practical reality and becomes even more important given that the population is ageing as the birth rate is below the rate required to maintain the population. It is becoming urgent that our human resources are used to their best potential as a declining workforce and an ageing population cannot create sustainable income growth. Energy prices never stay high forever.
Real leaders must make decisions about what is best for the next generation, and how best to convince the unwilling. Making the necessary policy adjustments, however, may not be in keeping with the popular mood as politicians are concerned with the next election and how to keep the electorate on its side.
Both Vision 2020 and 2030 identified key areas for improvement. Pages 48-49 of the Vision 2030 document clearly identify the key population challenges noting that “…it is evident that the demographic drivers of fertility, mortality, and migration are becoming increasingly important in determining policy responses to health care, education, housing, labour, pensions and social security. It also brings to the fore the economic and social costs associated with an ageing population.” Having correctly identified the issues, it proposed no measures or policies to mitigate the impact of the threats identified.
Since people are central to economic sustainability and national development, their education is a critical step to developing the skills necessary to keep pace with the world. The 2030 Vision document presents an analysis of the education system which it describes as “progress resistant.” It notes that the system is limited in its capacity to produce entrepreneurs and innovators or to address the culture of dependency. “Further there is a lack of courage to convert a 19th-century old colonial, missionary value system in education to a dynamic authentic force for development in the 21st century.”
Not everyone will agree with this analysis. But we can all agree that if T&T is to move away from commodity-based export-led growth, the workforce must be trained differently. Consequently, the challenge is not only improving the numbers (quantity) but also the quality. How do all the training programmes (MIC, MUST, HYPE, YTEPP etc) work towards achieving this result? Do they impart different skill sets and are these skill sets part of a future-driven manpower plan? Are they fit for purpose? And what of plans for the education system, from early childhood to tertiary level?
Vision statements can achieve nothing by themselves. Without well-articulated policies and determined action, they are nothing more than public relations documents, empty boasts on a political platform.
The 2023 budget speech spoke to the importance of the energy sector and its centrality to the economy. Thus far everything has revolved around continued reliance on the energy sector. But T&T’s economic history indicates that natural gas and ammonia prices can fluctuate widely, whereas economic transformation and development take time and require a focused approach. Singapore’s transformation is an important example of what can be achieved by focusing on principle as distinct from political expediency.