Opinion
- Editorial
Mary King:
Our brains are our edge
Mr
Anthony Wilson's views in "What gives us our
edge'' attempted to justify the focus on the exploitation
of our natural gas/oil resources since it is from
the present bonanza that we have been able to afford
free tertiary education, subsidised travel on the
ferry and gasolene, together with reduced taxes.
It
is said that the Government has other options in
agriculture, tourism, manufacturing and information
technology. However, for these to take over from
the energy sector, he thinks they would have to
generate $5 billion in taxes that the Government
collects from the energy sector. He argues that
we will be unable to compete in manufacturing with,
say, China's cheap labour, or with India in software
generation, exploiting also cheap educated labour
and even with Barbados in the tourism industry.
He
concludes that the only competitive edge that T&T
has in the global market is the monetising of natural
gas. Also, that we have a competitive advantage
in finding gas (possibly he means in giving incentives
to the bpTTs of this world) and (the foreign investors)
turning the gas into plastics, aluminium etc.
Finally,
he recommends this as the future path for our modern
industrial state i.e. exploiting our natural resources.
Compare
T&T as regards economic performance with Sweden.
Our GNI is of the order of US$8K per capita and
that of Sweden is US$26k - 3.2 times ours. This
local performance is due mainly to the energy sector
while the rest of the activity in the country is
also mainly driven by the earnings of the energy
sector, particularly via the Government's deficit
spending.
The
energy sector is highly capital intensive and employs
some three per cent of the labour force. A back-of-the-envelope
calculation would demonstrate that if we are to
depend on the energy sector to take us to Sweden's
GNI/capita we would need to run down our finite
reserves (proven and those yet to be found) some
3.2 times as fast. This will also employ at most
ten per cent of the labour force.
I
agree with Mr Wilson that this is surely the economic
model that the Government is attempting to put in
place. He has a right to worry since our resources
are finite and according to him we are uncompetitive
in all other aspects of global trade. Maybe we have
another 20-25 years of a viable energy sector, then
we will all emigrate, after bpTT is done.
In my series of articles on the Diseased Economy
I discussed the characteristics of an economy as
in the above, i.e. with the Dutch Disease, with
its debilitating impact of inflation generally because
of the low average productivity of the general population.
I
will not repeat the arguments here or the ways that
Botswana, Australia, USA and Canada have used to
beat the energy resource curse. However, I wish
to return to Mr Wilson's claim that we cannot be
competitive with China nor India in manufacturing
or information technology.
Surely
we should not attempt to compete with China in the
actual manufacturing of goods; instead, we should
outsource the manufacture of the products but retain
that part of the activity that is peculiar to us
culturally and knowledge wise; i.e. the design of
the products.
Further
we may wish not to compete in mass markets but,
for example, in the high price clothing niche markets.
India has admitted that it has been using its people
to write software specified and designed by the
likes of Microsoft and has not been doing any significant
work in the innovative end of product creation.
God has not discriminated against us in the award
of brains. For instance, a researcher at UWI has
just received a patent for a novel switching IT
system for electric motors. This means that no one
in the world can use this method unless we allow
them to. Hence, the large manufacturers of the world
can make the motors very cheaply and we in T&T
can supply our unique and protected product to other
end product manufacturers.
The moral of this story is that we should not attempt
head-on competition with India or China but with
our brains create niches either via IP protection
or natural competitive advantage (see New Zealand).
What is required is the institutionalisation of
innovation so that we do not depend on "serendipity''
for our inventions.
No
one says that we should not use three per cent of
our people in exploiting a finite energy resource,
even innovating in the area, but we have to dramatically
improve the productivity of the rest of us in the
creation of tradable goods and services if we are
to drive our GNI to US$30k/capita, sustainable and
with tolerable inflation.
Mary
King
is a very well known Trinitarian opinion writer(maryking@tstt.net.tt).
Petroleumworld not necessarily share these views.
Editor's
Note: This commentary was published by Trinidad
Guardian, on
Monday, July 3rd 2006 , Petroleumworld reprint this
article in the interest of our readers.
All
comments posted and published on Petroleumworld,
do not reflect either for or against the opinion
expressed in the comment as an endorsement of Petroleumworld.
All comments expressed are private comments and
do not necessary reflect the view of this website.
All comments are posted and published without liability
to Petroleumworld.
Petroleumworld encourages persons to reproduce,
reprint, or broadcast Petroleumworld Editorial articles
provided that any such reproduction identify the
original source, http://www.petroleumworld.com and
it is done within the fair use as provided for in
section 107 of the US Copyright Law
Internet web links to http://www.petroleumworld.com
are appreciated.
Petroleumworld
07 09 06
Copyright
© 2006 Mary
king /Trinidad
Express. All rights reserved
