Sunday 9th September, 2007

 
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T&T’s wake-up call

With an unprecedented amount of money available to it in the last six years, the Government embarked on ambitious social programmes. With the warning that we have energy reserves for only 12 years comes the concern that we may not be able to maintain these programmes in the not too distant future—in short that the money will run out. Many have called the Ryder Scott report a wake-up call.

I am no economist and will not presume to say that the Government with its several Ministers of Finance and advisers does not know what it is about.

Nevertheless, I do recall the trials of the 1980s after our first energy “boom” was spent, in the course of which many public servants (of which I was one) had their salaries cut by ten per cent. Many people could not pay their mortgages and lost their homes—in the East/West Corridor many abandoned homes stood for years.

It is no wonder that many of us who experienced that era view the Ryder Scott Survey and report with a sense of unease.

In the Senate last week, I heard Minister Danny Montano argue that the Government had the situation well in hand. I am not convinced. He compares us to the United States, pointing out that they have energy reserves for under seven years and they do not worry. He fails to appreciate that the US economy does not depend on the export of oil, gas and their by products. They are consumers.

The US economy is based on many different products varying from state to state. Mr Montano also claims support from a statement allegedly made to him by a foreign dignity that a 12-year reserve is nothing to worry about.

Don’t worry, be happy

I hear from the minister’s statement a touch of “Don’t worry, be happy” and “God is a Trini.” In other words, we are being told that it is almost a certainty that in the next few years we will discover new energy reserves: there is no reason to worry.

For some reason the minister also cited our massive consumerism as something of which we should be proud and that should give us comfort; it is a sign of prosperity and presumably should off set our anxiety.

I am concerned, however, especially in the light of our committed expenditure, which includes:

* About two billion dollars annually in senior citizens grants and public assistance

* Gate—free tertiary education and commitments at UWI, UTT, Costatt and the many tertiary institutions

* The waterfront project

* The rapid rail project

* CDAPP

* Free books and lunches

* The 50-plus social projects the Government has embarked upon

* Cepep and URP

Many of these items are new or represent massive increases in expenditure over the last five to six years. What if one day our energy sources do not provide enough to support the country; how will we finance our recurrent expenditure and development projects?

Energy-dependent

T&T is not the only country in the world similarly circumstanced whose economy is largely dependent on energy resources.

Two countries that come to mind and Dubai and Quatar. In both cases the governments have aggressively set about preparing for the eventuality that the reserves might run out.

Take the case of Dubai (population similar to that of Barbados) where the city is considered to be the fastest-growing in the world.

At present it is considered a land of “high rollers and heavy spenders” where money is said to be no problem.

Yet Sheik Mohammed bin Rashid has targeted 2016 as the year when Dubai will be the No 1 tourism destination in the world. Based on current estimates, Dubai’s oil reserves are expected to run out by 2016 so the leaders are planning ahead. The country is being geared through massive expansion and expenditure towards an economy based on high-class tourism.

Diversification apace

In contrast Quatar is a Gulf State with natural gas resources to last for decades (according to Focus on Trinidad and Tobago Budget by Ernst and Young).

Its population is slightly less than that of T&T (900,000). Yet Quatar has “recently been unrelenting in its focus on diversification.”

The Government’s stated policy is to decrease energy’s contribution to GDP from 60 per cent to 20 per cent by the year 2015 by aiming at several sub targets along the way. Diversification is apace in the fields of technology, education, science and financial services.

And all of this occurring in a country where per capita GDP is ranked among the highest in the world.

What are we in T&T doing that can be compared to the initiatives of either Dubai or Quatar in planning for the future. It is all well and good to talk about Vision 2020 as an overall goal, but what are our specific plans in the unlikely event that our energy reserves do run out?

Furthermore do we have sub-targets whether it is in relation to first world status or in terms of diversification?

I have heard a lot of talk surrounding these matters but little specifics.

Could the Government tell us what we are doing akin to Dubai and/or Quatar to prepare for a future that may not be based on energy supplies?

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