Commonwealth
Heads of Government Conference:PM
defends State’s role as significant investor
Kampala,
UGANDA
Petroleumworldtt.com
12 09 07
Prime
Minister Patrick Manning is challenging the conventional
wisdom of the Washington
Consensus which holds that the private sector has
to be relied upon to fuel growth in economies such
as T&T.
“Private sector led growth is nice to say;
but in fact T&T would have been nowhere without
substantial investments in the public sector. And
the role of the State is not just that of facilitator
but of significant investor,” said Manning
as he challenged the dominant economic policy-strategy
in the globalisation of the 21st century.
He did so at the recently concluded 19th Commonwealth
Heads of Government Meeting held in Kampala, Uganda,
with leaders from western economies such as the
UK, Canada, Australia, and New Zealand present.
“Where would we have been if the State did
not take the decision to collect the gas that was
being flared on the East coast to convert that
to electricity and to make us a low-cost electricity
producer,” Manning asked rhetorically in
relaying to the Business Guardian the stand he
took on the side of State involvement in economic
activity at the Munyonyo Resort in Kampala where
the leaders discussed economic and political issues
amongst themselves in seclusion.
Examining
the case of Nigeria to highlight what he conceives
as a failure of the private sector,
Manning noted that the West African energy giant
flares a significant portion of the world’s
natural gas. “Why has the private sector
not taken that up and do exactly what we have done
in T&T?”
Asked
if such a policy of widespread and deep State
involvement in economic activity could scare
off foreign direct investment from countries such
as the UK, Canada, Australia and the other western
economies with large multinational corporations
operating here, Manning says “nothing in
our policy in T&T prevents private sector investors
from doing so.”
Indeed,
Manning says foreign investors “want
a government involvement in their investment to
give them a certain measure of State security.”
“And I hasten to point out, if the State
in T&T did not invest in infrastructural development
there would have been no industrialisation. And
if the State had allowed the oil and gas producing
companies to sell gas directly to the consumers
at that time then hardly any of the projects would
have been economically viable,” said Manning.
He
said discussions at the Kampala CHGOM on the
issue of economic development and transformation
came out of a paper presented to the leaders by
Uganda’s President Yoweri Musoveni. At the
meeting, the Ugandan president seemed enthusiastic
about the subject at every moment that he addressed
the media in his capacity as chairman of CHOGM;
his theme invariably focussing on the need for
the “peasant economies” of the developing
world to be modernised with the State having a
major responsibility in triggering the change.
Musoveni, who has been in power for 20 years,
bemoaned the fact that agriculture continues to
account for over 73 per cent of employment in his
country while, with modern technology only 0.7
per cent of the working population is involved
in agriculture in the US and 1.3 per cent in the
UK.
“State development of education and health
is central in this process of transformation that
has to happen for countries in Africa, Latin America
and Asia to become middle class, skilled countries,” Musoveni
told journalists at the closing news conference
of Kampala.
The economic issue of greatest importance to the
developing countries of the Commonwealth raised
at the Kampala CHOGM, was the continuing attempt
by Caribbean countries to argue the case for the
creation of a category that would allow middle
income countries, so classified by the international
financial system, to be eligible to receive debt
forgiveness for those which are heavily indebted
and financing on concessional terms to enhance
their development prospects.
At
present only those countries categorised as being “very poor” receive
such concessions.
“But even though we may not qualify as being
poor enough, we are so burdened with debt that
in many instances we’re spending less on
critical services such as health and education
than some of the poor countries which are given
special dispensation,” said Jamaica’s
Prime Minister Bruce Golding, noting that the Caribbean
got the support of British Prime Minister Gordon
Brown, for the transformation of the international
financial structure.
British
commitment is reflected in the final communiqué which
mandates the secretary general to begin to coordinate
the arguments to develop a Commonwealth position
on the need to transform the international financial
structure, inclusive of the World Bank and the
International Monetary Fund.
“Important
in all of this is going to be the support we
are able to mobilise from the G8
countries: the Group of Industrialised countries.
It was the G8 countries, at the initiative of the
UK that secured the debt relief for poor countries.
“What we’re seeking to do is to get
that same weight of G8 authority to drive the process
of reforming the multi-lateral institutions so
that they can be more responsive to the needs of
middle income countries,” said Golding, seeking
to indicate that the commitments go beyond nice
diplomatic agreements.
Beyond rhetorical acknowledgement of the need
to transform the international financial institutions
and consideration of the need of middle income
countries such as those in the Caribbean for special
and differential treatment, the Caribbean leaders
believe the commitment given by the British prime
minister to secure an extension of the December
31 deadline for countries of the African, Caribbean
and Pacific (ACP) grouping to sign on to the new
Economic Partnership Agreement with the European
Union is tangible evidence of solid intent of purpose.
“We have been able to impact upon the British
and are told that there is going to be a call for
a delay in order to complete these negotiations
to achieve greater benefits from the EPAs,” says
Prime Minister Douglas noting that under the existing
regime, if the agreements are not signed by the
present deadline, end of December, ACP countries
can attract penalties from the World Trade Organisation.
“It cannot be in the interest of the developed
community to have significant number of countries
representing a significant percentage of the world
community being left behind,” says Golding,
noting that when he made the argument to the leaders
at the CHOGM retreat, he did not seek to appeal
to any sense of altruism on the part of those industrialised
countries of the Commonwealth.
“If we remain poor, then we will provide
a very weak market for the goods you’re producing
to trade with us; if on the other hand you recognise
that you have an investment in upgrading the standard
of living in developing countries then you’re
talking about expanding the market for your own
products. I think that point had some resonance
with the leaders,” said Golding.
Story
by
Tony Fraser from
The Trinidad Guardian
Trinidad
Guardian
Thursday 6th December, 2007
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