Opinion
- Editorial- Commentary
Dr
Morgan Job: development?
"We did it in energy and we shall do it in
agriculture," boasted Prime Minister Patrick
Manning.
Flushed
with petrodollars from the first oil boom (1973-1979),
Dr Eric Williams
invited Tenneco,
Texaco, Shell, WG Grace and all the energy companies
operating in Trinidad in 1975 to the Chaguaramas
Convention Centre. He told them he wanted help
to revolutionise agriculture. The conference was
titled "Oil and Food." Plans to produce
food were produced. Then, Dr Williams supervised
the expansion of Crash Programme, subsidies, and
massive transfer payments to PNM supporters, Caroni
Ltd (the "Indian" DEWD/Crash Programme),
and the general population. Williams' fiscal policy
regime ensured that citrus, cocoa, coffee, coconut
and agricultural production generally declined,
or ceased, for lack of labour inputs, as well as
lack of support that explained the European Economic
Community's (EEC) Common Agriculture Policy (CAP),
or the millionaire farmers of the USA. Estate owners
and farmers were unable to match PNM government
wages paid to workers cutting grass by the roadside,
or women, as designated water carriers, getting
paid for looking pretty by the roadside. Dr Williams
died in 1981 leaving no oil money converted to
food production.
Point Lisas is Dr Williams' legacy. It represents
economic growth. But, economic growth is not economic
development. The ideas that inform drilling, liquefaction
and export of natural gas were not produced in
Trinidad. The same applies to steel, and Mr Manning's
three aluminum smelters must depend on old technology
invented in Europe. Billion-dollar projects using
natural gas, like billion-dollar buildings on the
Port of Spain waterfront, and the $150,000,000
Prime Minister's house do not represent economic
development, even if Mr Manning calls the spending
growth. They are capital intensive, foreign exchange
using, and unsustainable as job creating occasions.
They remind us of Venezuela's President Marcos
Perez Jimenez (1948-1958). He built aluminum smelters,
the world's largest hydroelectric dam on Caroni
tributary of Orinoco river, tunnels and skyscrapers
in Caracas, chemical plants, and vast highways.
Venezuela is still a beggar sitting on a pot of
gold: an undeveloped country that will starve if
unable to buy two thirds of its food from the USA.
Venezuela
has the advantage of vast agricultural ecosystems
ranging from tropical
lowland to temperate
highlands that can make it a major food exporter,
but must use its oil money to buy food. After oil
was discovered in Nigeria, the country stopped
exporting peanuts, cocoa, or palm oil. Mr Manning's
flatulence at the thunder concerning his new vision
of agriculture as Trinidad's saviour is an imposture.
It is disconnected from any knowledge of Dr. Williams'
grand charge about "Oil and Food" or
the history of Nigeria or Venezuela.
The Soviet Empire built huge factories. The economy
grew with each world's biggest steel mill, biggest
tank plant, biggest chemical plant, but it became
progressively value subtracting: the outputs were
worth less than the value of the inputs. It was
an undeveloped economy, as Russia still is, a version
of Congo with nuclear weapons and ballistic missiles
bought with sales of minerals, gas, and oil. Mr
Manning needs to study the history of the Soviet
economy. He needs to study Ireland, Switzerland,
Sweden, Finland, Holland and the UK before North
Sea gas and oil discovery, Japan, Taiwan, Singapore,
Korea, Germany and France, none of which achieved
developed country status because they had oil or
gas. None developed businessmen by means similar
to Mr Manning's Cepep pets, or URP. When Europeans
implemented the welfare state they used wealth
created by productive workers, not rents from natural
gas sales. Sweden and the rest have since modernised
their welfare spending to target the needy and
discourage free riders, while modernising human
capital.
Before
Mr Manning indulges in 2020 delusions inspired
by divine or other provenance
(seers or prophetesses),
he must ask: "What explains why Holland produces
and exports flowers and Venezuela none?" Venezuela
has cheap labour, vast territory with fantastic
biodiversity, all year sun, more fresh water than
any country except Brazil, cheap energy, but the
world's number one exporter of flowers is Holland
(almost no land, winter or cold weather most of
the year and no natural biodiverse flora), not
Venezuela. The reason Mr Manning: Holland is a
world-class producer of genetic engineers, and
has a history of world leadership in trade and
marketing going back to medieval times. It was
touch and go in the early 17th Century whether
the Dutch Republic (Holland) or England will be
the dominant global maritime power. Knowledge and
ideas not gas and oil explains why Singapore produces
and exports genetically engineered pet fish. Natural
resource nationalism of the Evo Morales or Hugo
Chavez kind is 200 years out of date, and the confusion
of tall buildings, aluminum smelters and LNG factories
with economic development spawned by such intellectual
cretinism must cripple Trinidad, or natural resource
giants as effectively as Gulliver was immobilised
in Lilliput. Our energy sector depends on foreign
direct investment and ideas. Mr Manning is disingenuous
in saying: "We did it in energy and we shall
do it in agriculture."
Development is a function of ideas, culture, and
institutions promoting transparency and accountability,
especially family. The non-energy sector of this
country will never grow directed by PNM 2020 mindset:
$50,000,000 to spend on pan, but no conservatoire,
no training of music teachers, no import of music
or math and physics teachers, no institutions nuturing
intellectual property, and the music project started
in Tobago primary schools by the MP for Tobago
East maliciously closed down, stopped, abandoned
by the Government and the THA! Developing business
skills is less a function of affirmative action
donating millions to killers called ethnic community
leaders, and more accommodating the culture that
explains Igbos in Nigeria, Kikuyus in Kenya, Carlos
Slim a Lebanese Mexican and the wealthiest man
on earth, the 12 richest men in Russia 10 years
ago-all Jews- after the centuries of pogroms expulsions
and Stalinist killings, or the descendants of Hebrew
slaves-Ezra, Nehemiah, and Esther-who rose to eminence
in the Babylonian and successor Persian Empire.
Mr Manning's donation of millions to community
leaders help explain the black on black gang killings
in the ghetto heartlands of PNM, not creation of
businessmen.
Development is about knowing that neoclassical
economic theory must direct our fiscal, trade and
welfare policy. It must guide our relations with
the IMF. UWI, Lloyd Best and Eric Williams invented
no economic theory. Following Washington Consensus
market fundamentalism like monkeys or parrots show
ignorance of the theory of elasticity. That devaluation
failed to rescue Jamaica, or impoverished former
communist regimes, cannot invalidate neoclassical
economic theory. Slavish adherence to IMF recipes
manifest intellectual insecurity, or ignorance
of the idea of elasticity, and role of institutional
capability. It cannot invalidate the Law of Demand.
Moral hazard and adverse selection will not be
banished in our capital market because ignorant
politicians want to convert cult supporters into
businesspersons. 2020 delusions will not abolish
the lags in response to cultural imperatives of
complex human-biological agricultural systems.
Mr Manning's Machiavellian words of hope will not
make billions spent on Cepep, URP, subsidies, and
community leaders compatible with any revolution
in agricultural production.
Dr Morgan Job was a university economics lecturer
and a former Minister in the Ministry of Finance (mrganjob@gmail.com). Petroleumworld not necessarily share these views.
Editor's
Note: This article was first publish in Trinidad
Express, Wednesday, August 22nd 2007. Petroleumworld
reprint this article in the interest
of our readers.
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Petroleumworld
08/26/07
Copyright ©2006
Morgan Job. All Rights Reserved.
