Two
of the country’s leading economists agree
that the Government’s idea of establishing
a metals industry based on an aluminium smelter
makes good economic sense.
Economists
Dr Ronald Ramkissoon and Gregory McGuire and former
Finance Minister Yetming all told the Guardian that
a metals industry had the potential to diversify
the economy and bring significant returns to the
country.
Prime
Minister Patrick Manning has argued that a metals
industry was a key component in the Government’s
plan to establish a “modern industrial state.”
He
said the other industries were downstream chemicals
and plastics.
Yetming
said: “I have no doubt that a metals industry
will bring enormous benefits to the economy of T&T.
This is even without even doing any feasibility
studies, so there is no doubt that such an industry
is in the interest of this country.”
He
questioned if it was necessary for the country to
build a metals industry from the point of converting
alumina into aluminium or if it should instead import
the aluminium and process it.
“I
am not saying we should not build an aluminium plant
because it may be possible for the Government to
justify the Alutrint plant based on various things,
including value added and ownership structure, but
I certainly question the need for two smelters,”
he said.
McGuire
agreed with Yetming that there may not be a need
for the Alcoa smelter.
Both
Yetming and McGuire said they would only consider
supporting the Alcoa smelter if there were concrete
plans to go further downstream.
McGuire
said he was supportive of the construction of the
Alutrint smelter and the development of a metals
industry as long as the environmental concerns can
be satisfied.
“When
you are looking at a new industry you are looking
at jobs, in particular high-value jobs. You are
looking at value added in terms of how it uses your
natural resources and adds value to it by going
further downstream and then there is export earnings.
Those are three economic benefits you want a new
industry to bring and the question is does a metals
industry achieve that? The answer is obviously yes,”
said McGuire.
He
explained that T&T’s competitive advantage
of cheap energy is driving the interest in setting
up aluminium smelters in this country.
He
said this country had to ensure that it utilised
its competitive advantage to help develop the onshore
sector.
“We
talk about the onshore and offshore sectors. The
dominance of the offshore sector and the need to
build the onshore sector. When we consider going
downstream that is where the two sectors come together.
Once you go downstream then local entrepreneurs
can get involved and you can develop your manufacturing
sector based on the pillars identified by the Government.
I think the Government’s industrialisation
plan is a good way to go.”
He
said the issue of entrepreneurship had to be raised
since the country had the history of investing heavily
in a steel mill with the expectation that the local
private sector would invest downstream and add value.
This never happened.
“There
was some limited efforts at downstream but clearly
not enough. However what do we do as a country?
Do we say well that happened and as a result we
don’t try again? I think aluminium is different
because it is far more versatile and already we
have some companies involved in using aluminium
products which we can produce for ourselves,”
sad McGuire
Head
of Republic Bank’s Economic Unit, Ramkissoon
agreed that with McGuire that while there are questions
over the how many entrepreneurs the country has
there was no need to write off the possibility of
local private sector going downstream with aluminium.
“If
we are to judge from the increased interest being
showed in the local energy sector by conglomerates
like ANSA McAL we can see there is a good chance
they may be convinced to get into metals manufacturing,”
he said.
He
added that he did not wish to get into the argument
whether Alcoa’s plant should be built or not
except to say there was a need “for a less
emotive discussion of the issues.”
He
said it was conceivable various light industries
can emerge from making aluminium available on the
local market but there was also need for feasibility
studies to be done to ensure that the country gets
into the best projects.
They
all agree that as exciting as a metals industry
sounds the country has to ensure that the environmental
concerns are addressed and the local private sector
take advantage of an opportunity which has the potential
to transform the economy and make the country’s
wealth sustainable over the long term.
The
Trinidad Guardian
Thursday 23rd November 2006
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©2006 The Trinidad Guardian. All Rights Reserved.
