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Economaic pains

Sunday, March 27, 2016

Missing from the formula given by the International Monetary Fund (IMF) to achieve the historical objective of diversification of the T&T economy is the requirement for an injection of an inventive and aggressive local entrepreneurship into the industrial, manufacturing and business environment here. 

The IMF’s statement advocates structural adjustment of the economy to make it open and encouraging to investors; it requires that government bureaucracy be eliminated or minimised to encourage investors; and that there be a curtailment of make-work social programmes to allow labour to be available to investors and the general business community. 

These are measures which are merely facilitative of investment and assume a range of capacities which does not exist in the local business community here. The prescriptions of the fund, therefore, are directed at T&T attracting foreign direct investment (fdi) with its long-developed entrepreneurship insight, technological capacity, and established markets for export production.

Notwithstanding the importance of the facilitative measures for local and foreign investment, it is the spirit of risk-taking, adventurism, insight into creating potentially competitive products for the international market, and the drive to conquer markets which are the far more vital requirements for diversification in T&T. And those characteristics need to be spawned here in our environment.

Of course, that does not mean turning our backs on fdi. Given the limited local capital, technological base and the complicated and very challenging access (through free-trade agreements) to large external markets, foreign investment and investors will always play a significant role in export production.

But the reality is that notwithstanding the hundreds of billions invested here and large volume of products exported to markets in the USA and Europe over a couple hundred years, the T&T economy remains limited and vulnerable to every shift in international economic vagaries. Moreover, economic production of the kind that has been engaged here has been and continues to be based on the economic and financial agendas of external corporations: and it cannot be expected to be otherwise.

No better example of this than the present decision of ArcelorMittal to leave T&T. The company says that international and local market conditions have turned against the continuing production of iron and steel at Point Lisas. And who can blame a company that has its shareholders interests to pursue rather than a T&T national interest.

It took passion and vision for the great inventors and entrepreneurs of the world to “dream dreams,” science and technology to create products for export, and gumption for entrepreneurs to have the toughness to turn those dreams to reality. In the instance of the Newly Industrial Countries of Asia, it was the spirit of inventiveness, entrepreneurship and a disciplined culture which lifted those countries out of old colonial relationships. In many instances, there was bondage and brutality in the colonial relationships, as in the instance of Japan over South Korea.

Critical to the triumph in those Asian countries was a culture of belief in self and the willingness and disposition to acquire dynamic and productive work habits. And this latter point can only take hold if the right productive industrial environment is negotiated into existence. It must be one which, as last week’s column advocated, produces understanding and equity amongst the industrial partners.

I repeat: It cannot be that only those who put ideas and financial capital into the enterprise will reap the great benefits, while those who make those ideas and projects come into existence are made to exist on subsistence salaries and wages, and are made to feel like expendable appendages to the enterprise.

In such an environment, a new more co-operative and participative trade union movement must arise; if not, employees will surge ahead of their unions. Such employees will confine unions to obsolescence while they enter into new and productive partnerships with the corporations in which they have a vested interest.

The generation of business and commercial entrepreneurs evolved here naturally out of the colonial relationship of Mercantilism. Local businesses, many of them family organised companies developed from their links with the merchants who traded and produced during the period of slavery and indentureship and during the period of Crown Colony government.

The local companies focused naturally not on developing local products for export but rather on becoming agents for the producers of goods and services in the Metropole. Over the last few decades the likes of Ansa McAL, Matouks, Neal and Massy (now Massy) have evolved and have achieved some measure of success in establishing export operations.

What we have not done as a nation is to take on deliberately, strategically and perceptively the challenge of nurturing and nourishing entrepreneurship. Yes, there have emerged a few bold and creative investors who have done it through instinct and necessity. But at the institutional level we have continued to produce job seekers and workers with technical skills who can fit into a business organisation and a narrow range of industrial plants.

Following on logically from such a conclusion is the need to transform our education system to produce thinkers, inventors, scientists, entrepreneurs who will see possibilities in our arts, our physical and social environments, in the capacities and potential value of our entertainers and what they have created.

We have to see and appreciate the value in our writers, intellectuals, sportsmen and women, painters, dancers and creative artists from Cazabon to Clarke, to Tony Williams to Machel.

To be continued. 


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