A new economic game change

The Prime Minister at the opening of the Chaguaramas board walk said that the project (board walk) will encourage people to visit and vendor booths will be built; economic development. The Minister of Finance in his Budget speeches spoke about the proposed five growth poles where the government will encourage economic growth.

Also seventy percent of the PSIP is about generating employment in the construction industry. The government has reduced interest rates at the Agricultural Development Bank to encourage agriculture and increased foreign investment incentives in the exploration of the new deep water blocks and is encouraging downstream investment in the energy sector.

The Competitiveness and Innovation Council of the Ministry of Planning is offering a prize of TT$200k for the best innovative project and help to get the business off the ground—serendipity. Mr Winston Dookeran, in his recent book; “Entrepreneurial Economy and Human Potential,” sees the global Internet/World Wide Web (WWW), not as the benign computer communication channel that it is, but as the new frontier space to be explored by our explorers, discoverers and entrepreneurs and these are to be encouraged since in the long term sustainable development depends on this new breed of information and knowledge entrepreneurs.

The book also encourages foreign investment, public-private sector partnership and accentuates tertiary education since knowledge has become a primary factor of production (has it not always been so?), and is vital to the emergence of innovation systems and the development of our human resources.

This government and others have had various programmes in place to help small businesses; VCIP, Small Business Development company, NEDCO, Agricultural Development Bank, (the NAR even had a business incubator), and identified areas, eg ship building, printing and packaging, with respect to diversifying the economy. The successes of these efforts have been minor simply because proper strategic management was not in place.

For example diversification of the on-shore economy is seen by our self-organising private sector as being ‘nice to have’ but not really necessary since the rents from our petroleum-based plantation economy provide them with high risk-free returns in the provision of the import needs of the population and other related services and the massive subsidies that allow the general population to live above its capacity to produce; in a welfare state.

Even now we are awaiting the finding of more oil or gas, for gas prices to go up and FDI to provide new downstream plants and we will emerge from the recession. What no government has done is to tell the people that in 15-20 years there will be no more commercial oil and gas, given current reserves, and this is the breathing space in which we have to create a new economy to replace the billion dollar energy sector which provides 80 per cent of our foreign exchange, 50 per cent of government revenues and over 40 per cent of GDP.

This really is the mission (the game change) of the strategic management of our economy. Of fundamental importance for economic development now, as it has always been, is the human sourcing of information, developing, applying and creating knowledge in the production of goods and services that the global community requires, now moreso the mental models through which humans interact economically.

Hence the interconnections among the economic entities are and have always been essential to economic development. The Internet/WWW has sped up tremendously the transactions among the economic elements and the transfer and scale of information, making the human processing of this information to knowledge, its creation, innovation and mental interaction today’s competitive advantage.

The first step then is a SWOT analysis of our present economic situation. Accordingly, Prof Ricardo Hasumann says that we do not have the skills/knowledge generating systems that can take us into the denser part of the product/service space inhabited by developed economies.

He recommends a direct intervention by the Government, one which I interpret as the creation of an embryonic innovation system that can initiate the above fundamentals of economic development. The PP Government has indeed taken its eye off the ball!

Mary K King
Via e-mail