Budget must reverse economic decline

By Raffique Shah
October 09, 2011

Raffique ShahFOR the first time in many years, I am worried about the state of this country’s economy. I am not among alarmists who see doomsday whenever the price of oil dips by a dollar. To the contrary, in the wake of global financial crises of 200-08, when commodity prices tumbled, I didn’t even blink. Now, however, I’m wincing.

My discomfort has little to do with oil or gas prices, although that is a concern. I am worried because after decades of boom-busts cycles, we have done little to steer our economy away from its heavy dependence on oil and gas. Now, both commodities seem to be running low, if not running out. If or when they do, we have nothing else in place to save us from freefall.

Or do we?

I am writing this on the eve of Finance Minister Winston Dookeran’s 2011-2012 Budget presentation, deliberately so. My meanderings will not influence the contents of Winston’s speech and the measures he and his Cabinet colleagues have agreed upon. I am hoping, though, that the Government has given serious thought to a post-oil economy and has put in place strategies and mechanisms that will make the transition easier on citizens.

Oil production peaked as far back as in 1973-80, at just over 200,000 barrels a day. Since then it stabilised at around 125,000 bpd, which was comfortable. Recently, it dipped below the 100,000 threshold, and there are few indications that we will ever return to the comfort zone. There is lower drilling activity than ever—big oil is targeting potentially lucrative fields in and around South America and Africa.

In spite of assurances by Energy Minister Kevin Ramnarine that we can recover from this extended slump, I am not hopeful. With respect to natural gas, sure we are producing lots of it. In 2010 we produced close to 900,000 barrels of oil equivalent a day (boepd). Usage at Atlantic LNG, the downstream energy plants, and for purposes like power generation, account for around one trillion cubic feet of gas a year. And we are replacing it with zilch, with proved reserves standing at around 13 tcf.

Where are we headed, if not for the mad house? I am not suggesting we abandon gas, certainly not the downstream energy plants. If we need to buy gas from Venezuela to keep our methanol and urea plants up and running, that makes sense. Indeed, we should have closed a deal with Caracas to purchase its 7.5 tcf from the L’Oran Manatee cross-border field two years ago. For unexplained reasons, it seems that Caracas and Port of Spain are not on speaking terms. I don’t know.

What I have noted here, and much more that is not written, suggests that moving in a direction that would make us less dependent on oil and gas is now an imperative. But there are few signs of alternative strategies. Manufacturing, once quite robust, has been in the doldrums for years. Food production is picking up, but we do not have the land space that will allow us to produce more than 20 per cent of our nutrition requirements. We have heard a whole lot about “knowledge-based economy”, which confuses me: I thought knowledge is essential for just about everything we do.

The latest buzz words/phrases are “ICT” and “innovation-led economy” …more confusion for me. Really, have we not missed the high-tech flight? Microsoft’s Bill Gates has retired and Apple’s Steve Jobs is dead and we are yet to develop even an “app”! How the hell do we expect to compete against tech-savvy countries like India, China, Singapore? Let’s get real, realise our limitations, and work with what we have, toward goals we can realistically achieve.

Truth be told, we have free education from pre-school through university, but on a pro-rated basis we are churning out fewer well-rounded, intelligent human beings than we did 50 years ago. Intellectuals? Forget it. They are so few, they are near invisible. Cultured? Wha ees dat? Soca or chutney?

Look, while I worry about my country, its economy, its future, I am entitled to a laugh or two. Seriously, though, how does the Government plan to mount an economic rescue mission in a period of inglorious uncertainties? We have some very bright and experienced people out there who are patriots, who will give their all for their people and their country. Tap into their fertile brains for solutions to the economic crisis that looms large on the horizon.

We cannot afford the luxury of partisan politics at this critical point. Already, we are saddled with an unacceptable level of indigence. Poverty affects the young and unemployed as much as it impacts on the aged, many of whom are condemned to die in destitution. Without adducing data, I can safely assume that around 500,000 people in Trinidad and Tobago eke out an existence barely above the poverty line.

It is time to address the imbalances in society that have brought us to this sorry pass. As we move to stimulate economic activity, we must simultaneously narrow the gap between the filthy rich and those who live in abject poverty. In the process, we do not eliminate the middle classes: we strengthen them.

Whatever is necessary to save us from falling into the abyss of a failed state, we must do it now. We cannot wait another year to act decisively. Dookeran has the onerous task of starting that process from tomorrow. His Budget must be an instrument for reconstruction of a wounded nation.

6 thoughts on “Budget must reverse economic decline”

  1. “FOR the first time in many years, I am worried about the state of this country’s economy. I am not among alarmists who see doomsday whenever the price of oil dips by a dollar.”

    I lived through the 80s when oil price was $19 US per barrel. Those were times when you could actually see people walking the streets with their heads down in state of depression. Things eventually changed but citizens decided during that time that the grass was greener elsewhere and simply got on a plane, boat or dingy and dust it.

    Everything works in cycle so it would not be unusual for a return of those days. The government must tighted it’s revenue collecting schemes make sure that citizens pay their taxes. Greece recently saw a down turn in their economy, the government was the chief employer at 42%. The government must avoid being the chief employer. Also the age of retirement in those countries could have been from 55 and up leaving the next generation to bear the pension burden.

    The next thing the government must do is watch it’s spending. Most Western nations have spend themselves into a “hole”. The Chinese now basically own their economy. What would happen if the Chinese decided to sell off American T Bills. Also government have the bad habit of borrowing. As tempting as it may be borrowing must not be the “modus operandi” of the government.

    This government however is on the right track, encouraging citizens to grow and eat locally grown produce. They must work with nations who have a track record of producing their own food, such a China, India and Israel. The bottom line is if you have a full belly you will be okay. I came from a large family but we never starved because we grew everything. Rice production must take the next step and become mechanized, however top soil conservation must be preserve. Our family used the tractor to till the soil and as soon as the rain came the nutrients in the soil was washed away causing declining yields. The Agro Industry must take into account a survey of land use and put the lands under production with much wisdom.

  2. Google the ” Trinidad&Tobago Strategic Culture Report “by Anthony T Bryan, published by Florida International University in September 2011.It’s an interesting read.

    In a doomsday senario, he predicts a possible end to oil and gas by 2020. Shah is correct when he says that “moving in a direction that would make us less dependent on oil and gas is now an imperative”.

  3. Shah is correct when he says that “moving in a direction that would make us less dependent on oil and gas is now an imperative”.

    So what does that mean in actuality T-MaN? Do you think that the intellectually lazy ,over dependent on foreign fake experts,lifetime cuddled citizens, in your country T&T, would suddenly awake , to become let say a Brazil ,where they use engineering skills to likewise turn sugar , into ethanol energy?


    Better yet ,can your clueless politicians , develop the guts to decide to go for peaceful sustainable nuclear energy -via a balancing / counteracting partnership, with a real, none regional force, like say Russia , and China-as is their right , being a serving member of the UN , and promised /granted ,under Article 1V of the 1970 NPT?


    Doubt it on both scores, and you know it , and why? Luv country my friends, as the respective continents of Norte Americana, Asia , Europe ,Middle East, Latin America, Australia , Antarctica, and Africa, can never be home, or bring true fulfillment.

  4. “Without adducing data, I can safely assume that around 500,000 people in Trinidad and Tobago eke out an existence barely above the poverty line.”

    How sad, T&T is suppose to be the richest Caribbean nation.. 500,000 starving Trinis??? My my.

  5. Sugar is just as much king now as it was in the colonial era. Why hasn’t TNT turned to sugar production for ethanol? I believe that I mentioned this last year. TNT should be following Brazil when it comes to energy. Produce ethanol for domestic consumption.

  6. You already know the answer to that Curtis.Here are a few questions for you ,to set your mind straight, in the event that things are muddled on that score.
    Who controlled the Sugar industry since 1962, but with repeated behaviors – both domestic ,and foreign – have proven how much they perhaps hate T&T,to the point where they wish to see it fail, will invest absolutely nada, and or substantial , in it , and are solely ,hell bent on fleecing it at every level? Nuff said.
    Not too certain how one can change the culture of a people , who sees every governmental policy,business venture , and private individual initiative ,only through a racial/ ethnic , rose colored lens Curtis, can you?
    Here we go to de evidence:-On the back of one time ‘Houses before Horses,’ fiasco, the ULF/ UNC/ morphed into de PP government ,for example, has eliminated three major proposals on day one of taking office, that could have brought huge dividends ,to our country , while successfully eliminating , any opposition to their actions with pitiful excuses, and conveniently placed , non objective,alleged media gurus , and fan like suspect experts,yappers.
    On the behest of , a few disgruntled home owners, within de voting enclaves, that would have been inconvenienced , but handsomely rewarded- like others throughout our country’s history -the first gesture then was ,stymieing of a proposed construction ,of a 4 year , $20 billion Rapid Rail System (RRS),that would have alleviated many of the psychologically nerve wrecking,daily congestions ,on our roads,but more importantly perhaps , help create short/ long term employment ,via construction,and maintenance, centered around an entire, enhance transport industry, as done in more advanced metropolis, across the Industrial Northern countries.
    Now each time you are stuck while trying to get to the PBR where your special government permit can get you to the city pronto,you have influential ,pit-bulls ,such as this lifetime , ‘very grateful Civil servant,’to thank.


    The second was ,to again, cancel a proposed Aluminium Smelter Project, carded for La Brea, and if I am not mistaken transferring it to Guyana, for some similar , opaque reasons, which I personally lack the patience to even decipher.


    Third, and finally , the cancellation – and obviously , at very huge legal cost to our tax payers -of the purchase of advance , drug interdiction vessels ,that were destined for our country’s Coast Guards, and would have made our waters safer,while keeping deadly drugs, and weapons from entering our well known transshipment point country – all the while trumpeting the fictitious mantra, of concern for national security, and concerns for economic waste.We know about the legal ramifications for the 1980’s Caroni venture, but maybe not of this one , if the mostly undemocratic social firewall , PR protectors, have their way. Now who again is the beneficiary of this , again Curtis?


    Just in case you erroneously think that I am leveling fingers, only at one segment of my society , let me set the record straight, my friend, as luv of country , is not some idiotic ,catch phrase ,that can trotted out occasionally for public consumption.
    If I had my way ,I would take the entire hierarchy of the PNM -led of course by Patrick Manning -still alive ,from the past 20 years , and ship them all, on a one way ticket to Haiti, or some barren island ,any where in the globe ,far away from my dear T&T.
    These visionless creatures ,have perhaps ,done more harm to our country,by either squandering resources , and wasting opportunities ,that could have further accelerated the socio economic position of our country, that it just ain’t even funny.

    Therefor,much blame to throw around, and perhaps ,the sole reason why the present regime , feels justified , and emboldened to travel down these seemingly, reprehensible partway, where sustainable development remains an elusive fantasy,yes?
    Now , Curtis, if any say nation building, and engagement in actions that can advance our ‘National Interest,’in a ‘social, and politically fractured society,’ was going to be easy,please tell them ,’dey lie,’ hummm?
    Luv Country!

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