Opinion
- Editorial- Commentary
Raffique
Shah:
Economy on the platforms
...can
parties deliver on their promises?
THIS
might well be the first general elections in
the country's history in which the main parties
contesting have scrambled to put out manifestos.
The ruling PNM has said its Vision 2020 document
spells out its proposals for "taking the
country to the next level", hence it does
not need another document. The UNC and the COP
have resorted to dealing with specific issues
at each of their major meetings. Both parties
had promised to release their manifestos by last
weekend (this story was written on October 23rd).
One can only, therefore, glean from their speeches
what some of their plans are.
UNC
leader Basdeo Panday recently focussed on two
basic issues which he sought to combine-agriculture
and flooding. The ideas he floated are not new:
since the ULF contested
the elections in 1976, John Humphrey came up
with them, but no one took him seriously, nor
did he (and Panday) try to implement them when
they were in government between 1995-2001. Panday
spoke of addressing flooding by creating a number
of "retention ponds" along the country's
main rivers and watercourses, especially in areas
that are flood-prone.
These
would serve several purposes. Firstly, they would
be catchments for overflow of water when there
are heavy rains, hence minimise the volume of
water flowing through the watercourses. They
will mitigate if not eliminate flooding. The
water from the ponds can then be stored and used
for irrigation purposes during the dry season,
again eliminating or mitigating farmers' perennial
woes. Panday did not add Humphrey's wider vision,
which was to use the ponds for aquaculture and
even recreation. The PNM Government has a highly
touted 800-acre dam planned for the Caparo River,
but almost two years later construction is yet
to begin. Problem with one dam is its use for
agriculture will be limited to areas in its immediate
vicinity. There is farming in the Caparo Valley
east from Tabaquite to as far west as Carlsen
Field and Chase Village, so service to farmers
will be limited. Further, that one dam will have
no impact on flooding along the Caroni River,
or in the south, where floods wreak havoc on
farmers' crops.
Addressing
the country's potable water problem, party leader
Patrick Manning, linking low rainfall this wet-season
(thus far) with changes in global weather patterns,
has boldly embraced the desalination option that
he had rejected when the UNC commissioned the
first such plant in Point Lisas. Speaking on
several platforms, he said a PNM government will
move to install several desalination plants based
on the long-term view that countries such as
Trinidad and Tobago will have less rainfall to
depend on for dams or reservoirs.
Winston Dookeran
What
Mr Manning does not say is that WASA's main problem
is not winning water, but distributing potable
water. The utility's mains-some 2,000 kilometres-need
to be replaced, and that should be given priority.
A programme to this end already has begun by
WASA. Because of the age of the pipes distributing
our treated water, in instances over 50 years
old, around 50 per cent of treated water are
lost through leaks or encrusting. So even if
100 desalination plants are built, consuming
substantial energy (40 per cent of plant-operating-cost),
how will the water reach consumers? London Mayor
Ken Livingstone is among opponents to Thames
Water erecting a massing desalination plant close
to the mouth of the river Thames, where the company
said the water is less-saly, hence needs less
processing. Livingstone added something Mr Manning
may want to chew on: a third of London's water
supply, 915 million litres a day, is lost through
leaks. Livingstone added that this volume lost
daily was six times the capacity of the proposed
mega-desalination plant.
Turning
to agriculture, Mr Panday said a UNC government
would increase farm-sizes from the two-acre plots
the PNM gave to ex-sugar workers to a minimum
of 10 acres. He added that this was more economically
viable since a family can live off the earnings
of farms of that size and be able to afford mechanisation.
Where a UNC government would get 40,000 to 60,000
acres of land for prospective farmers was not
addressed. Many people are misled into believing
that Caroni Ltd. had 70,000 acres under agricultural
production: that acreage was substantially reduced
over the years, with a mere 35,000 or so remaining
in cane and rice.
Mr
Panday did not address a workable solution in
which ex-workers can combine their activities
in locations where there are many two-acre plots
by forming cooperatives to acquire machinery,
fertilisers and other essentials for successful
farming. Regulations regarding what crops farmers
plant, in order to avoid the glut-scarcity cycle
would be solved by going downstream into processing
certain crops. The PNM already has taken the
initiative in this direction, which it proposes
to implement through TTABA, a state agency that
is currently supplying plant-material to farmers
and is offering guaranteed prices for selected
produce.
I
have already dealt with the PNM's mega-farms
approach to food production. I pointed out that
unless we can reduce our dependency on foreign
sources for our staples, no amount of farms,
small or big, will impact positively on our food
security. There is no doubt that there is a resurgence
in the agro-sector with many young people showing
an interest. But if proper mechanisms-access
roads, cheap, semi-treated water, a drastic reduction
in praedial larceny, and proper, guaranteed marketing
systems-are not put in place, they will not be
lured into a losing venture.
On
the industrialisation side of the economy, the
PNM, dealing with opponents of its proposed aluminum
smelter plants, the Essar steel plant, and the
creation of an off-shore industrial island, argue
that they are against industrialisation, not
pollution. Manning asks at meetings: "If
not industrialisation, then what? What are their
proposals for sustaining the economy growth we
have had over the past six years?" He insists
that the PNM, if returned to government, will
not only continue its industrialisation thrust,
but expand into downstream industries. He speaks
of use for aluminum at the new Tamana Park at
Waller Field for manufacturing vehicle rims,
and even hints at entering automobile manufacturing.
Just
how many rims we can produce commercially and
successfully, he does not say. It's difficult
to imagine, though, all of Alutrint's and Alcoa's
annual production being used to make vehicle
rims! Moreover, with that market already cornered
by Far East countries that capitalise on low
labour costs, can we be competitive? As for vehicle
manufacturing, with many of the established firms
scaling down production or
merging
to reduce costs, it is difficult to see Trinidad
and Tobago becoming a player in that industry,
even by fabricating vehicle body-components.
Tata Motors of India, a 100-year old company
that is now expanding beyond its national borders,
is yet to make a major impact on the Indian motor-market
that is dominated by Japanese and Korean vehicles.
Should the PNM be returned to power, we can expect
the government to proceed with the two smelters.
Would
either the COP or the UNC change the focus on
heavy industries, stop the smelters? Would they
re-direct our resources towards high-tech, knowledge-based
ventures, as they are touting on platforms? Should
they come to power, they'll find the following:
-
The US$835 million UAN McAl-owned plant at Union
Estate is a done-deal.
-
Methanol Holdings' AUM plant, costing US$1.5
billion, is also under construction. The UNC,
in particular, would be in an awkward position
to intervene since the complex is part of the
Lawrence Duprey's CL Group, and Mr Duprey is
Mr Panday's friend.
-
The US$1.5 billion Westlake Holdings AUM plant,
slated for the Pt. Lisas East estate, should
break ground soon.
-
The Essar Steel plant already has started clearing
land in preparation for constructing its US$2
billion steel plant. How would the UNC, for example,
explain treating with Mittal Steel when it was
in government, but scuttling Essar?
-
A South African company proposes to plough US$84
million into a Malaeic Anhydride processing facility
at Pt Lisas East. Having wooed Mr Nelson Mandela
during the campaign, would the UNC stop this
plant should it get into office?
These
are some contentious issues that parties opposing
the PNM's industrialisation thrust will face.
Given our past history, one can hardly see either
the UNC or COP stopping any of these plants.
In fact, recent history shows that the UNC in
government continued, without missing a beat,
the heavy industrialisation started by the PNM.
Mr Panday went so far as to turn the sod for
a Norsk-Hydro aluminum mega-plant in the Savonetta
area that never came to fruition because it was
always intended for Qatar. So, for all the anti-industrialisation
slogans spouted from campaign platforms, we'll
hardly see any change in this direction, even
with the two smelters.
Another
major challenge that will face any government
coming to power is what to do about the TT dollar
remaining pegged to the US dollar, which has
lost almost 40 per cent of its value in the past
year. Although many countries that hold their
reserves in US dollars have moved to spread their
funds among a "basket of currencies",
the PNM government and the Central Bank insist
that because of our trading patterns (most of
our oil and gas are sold on the US market), it's
risky to de-link from the US dollar. The PNM
may be right: if countries like China (US$1 trillion
and climbing), Japan ($900 million), Russia,
Saudi Arabia and others have not de-linked their
currencies or sought to move their reserves,
why should little T&T, with a mere US$2 billion,
seek to so do. Experts are divided over a possible
full-scale recession hitting the US, which could
spell disaster, or severe losses, for countries
that continue to hoard their savings in US Treasury
bonds.
The
COP is promising to reduce VAT to 10 per cent:
based on past experiences, not to add increasing
commodities-prices globally, such move will hardly
impact on inflation. The party is adding it will,
in 2008, outfit all primary and secondary school
students with free uniforms. How practical is
this, given its cost and the reality that most
such students will have been already outfitted?
I expect the UNC and COP manifestos to focus
heavily on enhancing social security benefits,
especially NIB and government old age pensions.
Again, such increases need to be properly analysed
by actuaries. Many developed countries (especially
Nordic states) have had generous social security
benefits that have run into the ground. It's
something one cannot mouth off on on platforms
without having carefully studied whether such
payments are sustainable.
Raffique Shah is
a Columnist of the Trinidad Express.
Petroleumworld not necessarily share these
views.
Editor's
Note: This article was first publish in Trinidad
Express,
Wednesday, October 31st 2007. Petroleumworld
reprint this article in the interest
of our readers.
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Petroleumworld
11/04/07
Copyright ©2006
Raffique
Shah.
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