DREADNESS Pt 2

In my last article I spoke of a meeting with some Energy company executives who told me that that the era of oil and gas will soon be over. ‘In ten years time,” they said, “this country “will look like Haiti”. This article continues to look at the implications of this warning.

There have been many who have been screaming this gospel- Lloyd Best, Gregory Mc Guire, Mary King, and Afra Raymond have for decades. The Central Bank Governor himself has been raising alarms every chance he gets. He recently spoke of the CLICO fiasco costing the region somewhere in the vicinity of 10-15% of regional GDP. He chorused recently, “We need to undergo considerable structural transformation, if we are to maintain or increase the relatively high living standards which we now enjoy… In Trinidad and Tobago real GDP is estimated to have declined by 3 per cent in 2009 remained flat in 2010 and declined again in 2011.” In my last article I spoke of the fact that education, gas, and electricity are all subsidized to the tune of billions from oil money. With oil’s collapse all these artificially low prices will escalate. Some to 1000% present levels. We will also have to subtract from our life the massive subsidies in programmes like CPEP, URP, and housing. Household goods and services that now cost $2000 will now cost $6000…

Our standard of living cannot be sustained in a post-oil economy if we do not diversify because we live in a massive welfare economy. Journalist Anthony Wilson corrected something I said in my last article when I said that the mismanagement of the $300 billion boom by the last administration was so great that that it did not trickle down substantially to the middle class. Anthony correctly positions that actually the middle class- and everybody else- benefitted from these massive invisible subsidies. He calculates that as much as 53% of the non-stolen boom money may have gone into subsidies! Everyone- except government- knew that this money was better directed into economic transformation and citizen empowerment.

The rub is this: we in T&T live ultra-consumer lives. Comparable to Americans living in cities, in our consumption of food, entertainment, cars, and consumer items. And we pay 6 to 10 times more for the same items because of the rates of exchange. Yet we earn the same dollar for dollar income! A worker here earning $6000. is working- more or less for- the same $6000 abroad. In other words we are living American lives with 1/10th of the income! A music CD cost $11 in the States but $130 here. A Range Rover costs $50,000 in the States- it cost almost $1 million here. You can eat full meals for $7.00 in the States. You’re spending $40. to eat lunch here- and over $120 if eating at a ‘restaurant’. Our Food Import Bill is $4 billion! And all we earn from that is diabetes, high blood pressure, heart attacks, and strokes…

We are at a crossroad called ‘Diversify or die.’ And this administration unfortunately is paralysed at the fork in the road. We have 50 years of hard theory- it is time for the rubber to hit the road. Government has all the feasibilities and blueprints in their hands. Sectors have fought and gotten initiatives in the last 2 budgets. To their credit this administration adopted the policies. Budget 2010 was particularly visionary, with major plans for transforming numerous sectors. Not one of these initiatives has been implemented…

We’re now 5 months before the next budget- 2 years after the first promises. Once again visionary initiatives are being betrayed. When the dreadness comes, our political classes will pay high prices… When the masses see what was stolen, squandered, and the opportunities we have lost they will not forgive…. The problem as Lloyd Best said is cultural. Diversification means breaking strongly with habits of the past. Our leaders lack the risk-taking creative DNA to make the necessary leaps. They need to prove me wrong.

Culture for instance- which currently adds $1.9 billion to the nation- can be worth $6 billion annually to us in as little as 4 years if the initiatives approved by Cabinet are implemented.

Oil’s decline means that $25 billion annually will be removed from our Budget. To maintain a semblance of our standard of living something else must take its place by hook or by crook. I have seen estimates that put T&T’s annual drug economy at $75 billion- so it might be ‘crook’. If drugs are the replacement- we can add a ‘Mexico’ to the ‘Haiti’ in our future…

We have an opportunity in the next 3 years to engage the visionary re-engineering of our economy- we must make the poetic leap and implement. This will mean empowering citizens who have ideas. I am going to again pitch my concept of a Billion Dollar Visionary Fund- a Venture Capital fund available to individuals to corporations, a fund open to every innovative idea from any member of the public. I will revisit it in my next article.

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Posted on May 3, 2012, in President's Blog and tagged , , . Bookmark the permalink. Leave a comment.

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