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Friday, August 8, 2025

Developmental learning

by

Mariano Browne
1567 days ago
20210425
Mariano Browne

Mariano Browne

Marvin Smith

De­vel­op­ing a coun­ty is im­pos­si­ble with­out de­vel­op­ing the coun­try’s hu­man re­source ca­pac­i­ty. One can­not hap­pen with­out the oth­er as hu­man re­sources are a coun­try’s on­ly re­al as­set. Say­ing it, how­ev­er, is eas­i­er than trans­lat­ing this idea in­to a co­her­ent pol­i­cy and then tak­ing the nec­es­sary ac­tion to achieve that ob­jec­tive. Eco­nom­ic the­o­ry is not of­ten help­ful in this re­gard. En­tre­pre­neur­ship, pro­duc­tiv­i­ty, labour force par­tic­i­pa­tion rate, ease of do­ing busi­ness and oth­er catch­phras­es are help­ful ideas. What mat­ters is how they are de­ployed in prac­ti­cal ways.

There is no short­cut to de­vel­op­ing a world-class ath­lete. It takes years of con­sis­tent prac­tise, re­fin­ing tech­nique and per­for­mances. Sim­i­lar­ly, there is no easy way to de­vel­op a suc­cess­ful econ­o­my. Pe­ri­od­i­cal­ly some ideas take prece­dence and are en­cap­su­lat­ed in la­bels, like “In­dus­tri­al­i­sa­tion by In­vi­ta­tion”, im­port sub­sti­tu­tion or more re­cent­ly “dol­lar­i­sa­tion” and “game-chang­ers”. How­ev­er, whilst an idea may be de­vel­oped to solve a unique prob­lem, de­vel­op­ment re­quires a mul­ti­modal ap­proach as no sin­gle pol­i­cy will cure every im­ped­i­ment. A sin­gle ap­proach, like the sin­gle sto­ry in lit­er­a­ture, is a very in­ad­e­quate ex­pla­na­tion. In its sim­plest terms, In­dus­tri­al­i­sa­tion by In­vi­ta­tion as­sumed that an econ­o­my had nei­ther the cap­i­tal nor the skills re­quired to grow the econ­o­my. De­vel­op­ing a man­u­fac­tur­ing ca­pac­i­ty was the key to achiev­ing in­dus­tri­al growth. For­eign cap­i­tal would pro­vide the im­pe­tus to eco­nom­ic growth and de­vel­op­ment and in time, labour would learn the tricks of the trade and re­place for­eign skill sets and ul­ti­mate­ly ac­cu­mu­late (save) enough to re­place for­eign cap­i­tal.

The the­o­ry had prac­ti­cal lim­i­ta­tions as ev­i­denced by the T&T ex­pe­ri­ence in the en­er­gy sec­tor. Af­ter bil­lions of di­rect in­vest­ments by for­eign firms’ ex­ports grew as did tax col­lec­tions and GDP. In­dige­nous cap­i­tal ac­cu­mu­la­tion has not tak­en place in the en­er­gy sec­tor and as­so­ci­at­ed ar­eas to dis­place for­eign cap­i­tal. Cit­i­zens own a very small per­cent­age of the en­er­gy sec­tor. Sim­i­lar­ly, whilst na­tion­als can op­er­ate the plants and are quite knowl­edge­able, they are not de­vel­op­ers of the tech­nol­o­gy.

Her­itage is a clas­sic ex­am­ple. The state en­er­gy sec­tor com­pa­ny does not have the ca­pac­i­ty to car­ry out ex­plo­ration ac­tiv­i­ty on its own and must part­ner with a multi­na­tion­al to car­ry out ex­plo­ration as ev­i­denced by re­cent agree­ments with Shell. There are no ti­tans of in­dus­try here, but a raft of small op­er­a­tors and con­trac­tors who, with the best will in the world, can­not put Petrotrin back to­geth­er again. Nei­ther can the State.

There has been in­dus­tri­al­i­sa­tion. But the cur­rent chal­lenges in the en­er­gy sec­tor demon­strate that nat­ur­al gas is no holy grail. Things nev­er re­main the same. Game chang­ers come and go and as times change, hu­man sys­tems must al­so adapt to re­spond to those changes. It is sim­plis­tic and self-serv­ing to at­tack the lo­cal pri­vate sec­tor for not be­ing “risk-tak­ers” or man­u­fac­tur­ers. This ap­proach miss­es the point that even in high­ly in­dus­tri­alised coun­tries man­u­fac­tur­ing ac­counts for less than 30 per cent of the econ­o­my at best mean­ing that ser­vices and dis­tri­b­u­tion ac­count for the li­on share of any econ­o­my.

The point is that de­vel­op­ment is not a sim­ple mat­ter and im­port­ing cap­i­tal goods (fac­to­ries) and us­ing for­eign cap­i­tal has achieved trans­for­ma­tion of the nat­ur­al gas sec­tor. But to sur­vive and com­pete in a chang­ing world the sec­tor needs oth­er at­trib­ut­es for its suc­cess. All ac­tors in this space must adapt and change. Nor is “de­vel­op­ment” sim­ply about man­u­fac­tur­ing, trans­fer­ring cap­i­tal, tech­ni­cal and ad­min­is­tra­tive know-how or in­creas­ing sav­ings.

By crit­i­cis­ing the pri­vate sec­tor, politi­cians/com­men­ta­tors im­plic­it­ly as­sume that the State (the Gov­ern­ment) has a sen­si­ble and co­her­ent set of poli­cies and mar­ket dis­tor­tions are the re­sult of fail­ures by the pri­vate sec­tor. How­ev­er, the State has cre­at­ed many dis­tor­tions, de­spite its “best” in­ten­tions. For ex­am­ple, main­tain­ing an over­val­ued ex­change rate en­cour­ages per­verse im­port­ing arrange­ments. Sim­i­lar­ly, re­tain­ing VAT and oth­er tax re­funds and trade pay­ments for years amount to forced trans­fers/loans to the Gov­ern­ment thus pe­nal­is­ing the pri­vate sec­tor’s in­vest­ment and ex­pan­sion ca­pac­i­ty by re­duc­ing their cash flow. In­cen­tives to the con­struc­tion sec­tor nei­ther fa­cil­i­tate change nor im­prove the coun­try’s ex­port po­ten­tial.

It is in­evitable that a gov­ern­ment will make mis­takes. Gov­ern­ment needs to find ways to learn from those mis­takes. In­sti­tu­tion­al and peo­ple de­vel­op­ment is im­por­tant in both the pri­vate and pub­lic sec­tors. But knowl­edge ac­cu­mu­la­tion is dif­fi­cult to achieve and ex­plain. A suc­cess­ful ex­port­ing en­er­gy sec­tor has not been enough to re­sult in or sup­ple­ment the cre­ation of a strong in­dige­nous learn­ing process. The ed­u­ca­tion sys­tem has been built around aca­d­e­m­ic teach­ing and the pre­sump­tion that grad­u­ates will find a place in an ex­pand­ing sys­tem. But the process is more com­plex than this and more than 70 per cent of the re­gion’s grad­u­ates em­i­grate in search of rel­e­vant op­por­tu­ni­ties in oth­er coun­tries.

The key task is to build knowl­edge in its widest con­text in in­sti­tu­tions and en­sure that these in­sti­tu­tions are sus­tain­able. The ideas of tac­it knowl­edge, on-the-job learn­ing, learn­ing by do­ing in­cor­po­rat­ing tech­no­log­i­cal change are not now part of the ed­u­ca­tion sys­tem. There are many suc­cess­ful fam­i­ly busi­ness­es that have con­tin­ued to grow and trans­form pro­vid­ing a base for fu­ture de­vel­op­ment. This cre­ates an op­por­tu­ni­ty for a less for­mal learn­ing process. Strong in­sti­tu­tions in the pri­vate and pub­lic sec­tor are the key to fa­cil­i­tat­ing de­vel­op­ment and growth.

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