With the election of Donald Trump, the USA is set to leverage vast shale resources to further their energy independence agenda. That means that any reduction in OPEC production will most likely be offset by increased production from the shales.
Finance Minister Colm Imbert must be racking his brain and scratching his head. Or scratching his head and racking his brain.
The reason for his obvious disquiet is that the medium-term result can be a prolonged period of reduced oil prices. The case for diversification in T&T is, therefore, made since our revenues from the sector may not return to the fat and wealthy days anytime soon, if ever!
With the dependence on energy revenues, we became a spoiled nation. But, to be fair, the Finance Minister has been clear about the daunting economic challenges now facing the nation. And I believe that the average citizen with open eyes has seen ample evidence around him/her that supports the Minister’s position. The time for diversification is now!
But diversification of the economy has been the elusive component in our economic development policy over the last few decades. The burning question is no longer ‘What are we to do?’ but ‘How are we to do it?’
I think we now have a call to action. Speaking in Laventille relatively recently, Prime Minister Keith Rowley urged citizens to recognize the conditions and reduce their reliance on government.
I could not agree more. The days of the lazy private sector, rich in subsidies and government protection and lacking in innovation, are over. For this reason, I would have liked to see Dr Rowley repeat his message, perhaps more stridently, both in the Western Peninsula and in the South, where many of our corporate titans—T&Tians?—are based.
Contrary to apparently popular belief, diversification does not require major government investment. What is required is out-of-the-box thought and a willingness to build effective, efficient organisations. Government’s role can be limited to the provision of a facilitative environment for business. Twinned with this facilitation enterprise will be zealous efforts to encourage the private sector—including SME’s—to take risks, be innovative and allow itself to be weaned off the teat of governmental goodwill and largesse.
The role therefore seems to require the creation of an agency that would bring into being the business development frameworks for each industry segment. The agency, call it what you will, would take overall responsibility for the promotion of Brand T&T to investors, foreign and local, and for attracting FDI.
This last element is critical as some of these industry segments may indeed provide opportunities for large plant and technology investment and transfer.
As I envisage it, the agency will be a genuine “one-stop shop”—the locus where investors will receive all of the facilitation assistance, business plan support, utility and amenity approvals and commitments they may need. In short, the agency provides the handholding that is often required when kick-starting a new business and, moreso, a new industry.
Our strategic location close to a large and captive Latin American and Caribbean market, where we already share beneficial trade agreements and commercial relationships, is a comparative advantage. As indeed is our strong cultural affinity to many of the target markets and the close links we already enjoy with the diaspora markets in nearby North America.
And we should not forget that some of the groundwork for the establishment of just such an agency has already been laid. As part of its business facilitation mandate, the now defunct TIDCO identified seven industry sectors where Trinidad and Tobago has a comparative advantage, which translates into the ability to perform efficiently and profitably.
These sectors are tourism and hospitality; agro-business and food processing technology; leisure marine and boat building; specialty chemicals, plastics and packaging; metals processing and manufacturing, specialty plastics and packaging; man-made industries—IT and digital businesses—and culture and recreation-based industries.
The tourism sector has the potential to create large numbers of sustainable, direct and indirect jobs. So Ministers Cudjoe and Gadsby-Dolly might want to begin serious engagement with the NCC, NCBA, Pan Trinbago and artistes and other stakeholders about repackaging Carnival.
And Tourism might want to say more than a word or two in Darryl Smith’s ear about developing serious sport tourism. Certainly the imminent re-opening—oops! It’s an opening, almost ten years late!—of the Brian Lara Stadium in Tarouba provides an immediate fillip for any such initiative.
It’s not hard to see how by bringing the same kind of thinking to bear on the other areas, we can do the same thing there. In agro-industries and technology, for instance, the thrust might be towards adopting and adapting technology to advance the production, processing and canning of local produce and seafood to meet local demand and for export regionally and into diaspora locations.
The other industries listed will engage the curiosity and interest of our young population, already steeped in the various technologies and ready to apply such interests to serious commercial pursuits. Many of these industry sectors can benefit from modern cluster arrangements so as to drive sharing of best practices, specialized inputs and efficiencies, as illustrated by several of the Swedish technology clusters.
Indeed, this was the plan for the Tamana Technology Park, for which a comprehensive strategy and blueprint was developed at TIDCO. A brief synopsis of some of the thinking follows.
Our protected Western Peninsula can be the hub for leisure marine and boat repair and research, thus modernizing the regional yachting industry. Engage UWI and UTT in the development of advanced, high-value boat components, for example, wireless rudders and digital mooring systems.
A specialty chemicals and plastics sector would benefit from stripping and liquefaction of the heavier components from gas streams to provide feedstock for the manufacture of specialty products. Plastics can be used to manufacture high-value medical tubing, plastic mouldings and automotive and electrical components. This will also be the catalyst for a modern, high-tech packaging industry.
Engaging UWI to develop catalysts for polymerization of smaller gas molecules can provide further opportunities if that becomes necessary.
The man-made or technology-based industries—including software engineering, call centres, data processing and medical transcription—are areas which can provide high-value jobs and skills training at multiple levels. The vision of young TT scientists, IT specialists and entrepreneurs writing software, developing apps for sale on the open market is compelling.
Further, recreating our folklore in games apps using animation to penetrate the diaspora market has the potential to prove lucrative. The resources, the brainpower and the skills are arguably already present, only the will is lacking.
The culture-based industries offer developmental opportunities in film and animation, music and recording, visual and performing arts as well as fashion and fabric production.
Beyond the obvious creation of enterprise, jobs and improvement of social conditions, these industries provide significant opportunity to further establish our small nation as a hotbed of modern industrialization and excellence—further attraction for FDI.
But not much of this is new; if we are to stay afloat, the new buoy on the block is the urgency.
Failure to make the necessary changes now may not mean failed state status but it would almost certainly be moving us that much closer to economic death. After all, even if we are able to avert the crisis by increasing oil and gas production from Juniper, Dragon, Angelin, etc before too long, shale will ensure that oil prices remain depressed.
So if we fail to act, if we continue to talk diversification but do nothing, the continuing absence of a robust timetable will merely strengthen Terrence Farrell’s well-articulated thesis that “We like it so.”