TREVOR SUDAMA
I am dwelling on the Petrotrin refinery closure at some length not only because of its enormous socio-economic significance for the country but because it brings to the fore a major philosophical and governance issue namely, the role and responsibilities of governments in preserving and advancing employment levels in an economy such as ours with the resources currently at our disposal.
If eschewing ideology, we take the position that governments do have a major responsibility in this regard, two questions arise—(a) what are the limits to this responsibility and (b) whether there has been rational consistency underlying decisions for intervention or non-intervention.
A well-known characteristic of the T&T economy is the dominance of the energy sector and its very substantial contribution to GDP, to government revenues and to foreign exchange earnings. The sector, however, accounts for only four per cent of the labour force and generates very little spin-off job-creating activities. The non-energy private sector involvement in the economy has been modest. Its limited volume of investment has generated a few sustainable jobs of a skilled or semi-skilled nature.
Instead of growth, the manufacturing, tourism, and agricultural sectors have been contracting over the years. The general mentality of private sector operators is characterised by conservatism and risk aversion as denoted by the safe investment in import and retail commerce and foreign food franchises which have largely created low-wage unskilled jobs.
In such a context, therefore, the onus is placed on the Government to take the initiative in engaging in ventures which have the potential of creating a range of jobs. Governmental activity in an economy such as ours necessarily plays a crucial role through its programme of investment and its profile of expenditure.
Such endeavours are designed, among other things, both to preserve existing jobs and create new ones. The problem, however, is, having taken as a matter of exigency the decision to preserve jobs, governments have not proceeded to implement measures to place those jobs or the majority of them on a sustainable basis. Nor have they embarked upon or facilitated a meaningful programme of diversification through which jobs, preferably well-paid ones, would be created in different sectors of the economy.
The point is that, in the current state and structure of the economy, the role of the Government in job creation and preservation is pivotal. The present Government is committed to spending billions of dollars on the Sandals Beach Resort project (100 per cent equity) primarily to create jobs since net foreign exchange earnings might be modest given the all-inclusive nature of the resort and the arrangements for tourist expenditures.
Indeed, the substantial proposed investment in the Dry Dock Facility at La Brea has largely a similar objective of job creation. In the absence of significant private sector initiatives, the issue for the tax-paying public is not whether governments should embark on job-creating ventures but whether they are feasible in the long term.
In this vein, there is a rationale for governments to engage in temporary work programmes to provide jobs for the unskilled since the alternative would be unemployment. My objection to these programmes has been based on the fact that they have been used to enhance electoral fortunes and workers have been engaged in non-essential activities when they could be more productively employed in creating or rehabilitating the infrastructure for agriculture and for drainage and re-afforestation projects.
With respect to comparisons between operations in the private and public sectors there ought to be an appreciation of the different objectives and perspectives of the decision makers in each sector. It would help if leaders desisted from making superficial comparisons. For the private sector, the profit motive is the dominant consideration for investment. In the process, jobs are created but this is only incidental. Nor are private investors unduly concerned with the social consequences of high levels of unemployment.
A Government, however, invests with multiple objectives in mind primary among them is job creation and preservation, development of human capital and stimulation of the local economy. The reference to Neal and Massy and ANSA McAL has little relevance to Petrotrin’s current position.
With respect to calls for increased efficiency and enhanced productivity in the public service, the utilities, and local government, the reality is that this objective can largely be achieved only by a significant reduction of the labour force in these entities. If this were to take place in the current state of the labour market, the employees, so retrenched, will find it almost impossible to obtain alternative employment. It is very revealing that the Government is reluctant to proceed on such a course and is apparently willing to maintain current levels of funding and subsidies to preserve jobs.
Given the above realities, would the decision to close the Petrotrin Refinery be seen in a different light.
