Express ( Trinidad and Tobago )
26 December 2023 ( Page 14 )
Beware 'winner-take-all' interests
IN the interest of the country's development and growth, everyone needs to have an idea of where this country is heading so they can make a clear judgment as to what they themselves as individuals and groups can and should focus on to help and push things along, firmly.
A creeping conflict and conundrum growing in our economy is the indefinite and masked shape of the country's economic structure-who owns what? It is by keeping particular track of this, one is able to determine the levers of the many related things that support or undermine the growth of our economy and by extension, our opportunities in life.
As a first effort now, the Government should define its intended role in the economy and how it has emerged over the years of our independence, i.e. from 19622023, roughly 61 years.
In the early post-independence years, our economic planning saw public taxation being used to finance what were called five-year development plans for our national infrastructure. Also, for their share of the domestic patrimony, the landed gentry consisted of local importing and exporting producers, retailers and wholesalers. Big entrepreneurs, who formed the backbone of the domestic production and manufacture, demanded to be provided questionable subsidies of support. It was never openly stated why it was necessary to make such handouts available for groups, who, in no true economic sense, needed them. It was couched as a move of supplementing local investment with the direct objective of creating sustainable jobs from which the labour sector workers would benefit. Hence came the 'Buy Local' slogan and drives to encourage local production-'The Doctor say to buy local'.
The programmes granted parcels of land for industrial estate development along the East/ West corridor, Diego Martin and the Central region, and gave substantial concessions for water and electricity to businesses, the underwriting and collateral for commercial loans and industrial building through the DFC, NIB and the local banks, all with the intention of aid to business.
Since the oil boom in the 80s, much of this financing was borne fairly easily by the Government and this is further evidenced by our release of all foreign exchange controls for a long time.
However, subsequent to our two recessionary periods, the Government has become hard-pressed to show an even commitment to maintaining its private sector guarantees, together with its politically assumed public social benefit responsibilities (which also includes low-income housing). In maintaining these two burdens, governments have courted a pending collapse of the budgetary funding structure and even of the economy itself. Government has been battling with this impending fate since pre-Covid times.
Now recently the prospect of the Dragon gas deal has opened optimism for a further extension of the period of time pending any economic collapse. Meanwhile, many of the conditions created-especially by the effects of the global 2008 collapse-have steered the Government along new lines, too. So, what we are seeing is the emergence of our Government as the two-fisted main investor standing over both the public and the private sectors.
Someone must now reveal the true numbers of percentage ownerships that the Government now has accumulated in the private sector. The private sector is the alternating economic engine that is fundamentally needed to act as an independent force to balance the dominance of Government.
However, considering recent progressions upon Clico Holdings, Massy Holdings, Republic Bank holdings, NEL, Unit Trust and the NIB, the Government is now set to become the largest investor in the private sector of our economy. Where will this lead to? What risks do the public and other interest groups face?
This is relevant in the wake of such a concentration of power falling in the hands of a single political party (whichever one wins the elections). In a small country faced with cultural, religious and ethnic diversity, the prognosis of equity is dubious, and something to be always mindful of. For example, what of interlocking and overarching administrators designed to sit on both sides of the proverbial fence and pursuing incompatible compromises and working from injudicious jurisdictional boundaries? It's a roadmap for confusion and disaster.
This is certainly not a long-term recipe for social cohesion. This trend of Government is building a climate of 'winner takes all'. Is this what we really want?
John Thompson St James
Photo: Budgetary collapse