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Impetus from a stalled economy
So where do we go from here in the quest to achieve the economic diversity which the expert and non-expert commentators say is a necessity for survival, growth and sustainability?
In last week’s column, I said that T&T, like other Caribbean economies, has to develop the initiative, entrepreneurial capacity and the spirit of innovativeness, and begin to rely on its abilities to achieve economic diversification and development. Two papers sent to me subsequent to that column convince me that we have the vision and technical capacity within ourselves to achieve the imperatives of our times. What we need is a full helping of self-belief.
In a joint paper (2015), two very practical bankers—Ewart Williams, former governor of the Central Bank and career IMF economist, and Richard Young, former MD of Scotiabank advocate that the T&T International Financial Centre (TTIFC) should seek to internationalise its base to have the country emerge as the financial centre for Latin America and the Caribbean.
One proposition of Williams and Young is for T&T and the TTIFC to seek to attract the new BRICS (Brasil, Russia, India, China and South Africa) Development Bank to establish its regional headquarters here to service the needs of Latin America and the Caribbean for capital to stimulate economic growth and development.
The two bankers also see the possibility of the TTIFC engaging two Chinese development banks, the China Exim Bank and the China Development Bank to become what they call “anchor tenants” in the TTIFC.
The beneficial suggestion here is that T&T will gain in very self-evident ways; quality jobs and revenue as travellers arrive here to conduct business. To facilitate such activities, T&T will surely have to develop its technological and broadband capability to adequately serve the development banks. Additionally, the heightened profile gained from being a financial hub for business expansion will serve the interest of T&T on the international market.
The study by a UWI group (Engineering Faculty) inclusive of Prof Brian Copeland, Sandra Gift, St Clair King and R De Four states as its primary objective to achieve “economic diversification in today's globalised economy depends not on continued increase in productivity in the exploitation of our economic factors, but in continuing increases in innovation in the creation of products and services.”
The study underscores the point that elements of the business community here continue to be averse to taking risk and are quite satisfied to survive and prosper in the import trade. The authors say that the local/regional “private sectors have to be recreated.”
Here is one example of an opportunity that has gone without an expansive/collaborative attempt at achieving: There are dozens, perhaps hundreds of steelbands in the developed/industrial world, Western Europe, Japan, North America. In addition to those bands, there are steelbands at different levels in the education system in those countries.
It may still be possible, even though steelpan production has been started in the industrial north, to establish a quality made-in-T&T steelpan factory with the capacity for production and export of the instrument.
Late as it may be, producing steelpans under the label and history of being the creators of this wonder instrument and the culture associated with it, the T&T comparative advantage will make a difference. It is a challenge to be taken on by those with sufficient insight, innovative spirit and capital.
If such a pan-making industry had been solidly established here 30 years ago, it would surely have given much encouragement to people and institutions with the capacity for innovation to be confident about their ability to experiment and to create products for internal consumption and for export. It may not be too late even though the technological capacity to manufacture pans is probably solidly in the province of the industrial countries, the tradition and culture of the steelpan and steelband still reside here, and potential investors must see value in those factors.
The Copeland/plus study has worked out something of the detail of the infrastructure needed to stimulate the capacity for invention and innovation. Bankers Young and Williams, both with an understanding of international financial services and sectors, have provided some detail beyond ideas and potential.
I suggested last week that our education system has to be re-engineered to cultivate and nurture the spirit of entrepreneurship required to perceive of and to produce products and services in which we have a comparative and creative advantage.
What the two (and for certain there are other individuals and institutions which have done some work in the area) groups of individuals have demonstrated by their thoughts and work on the challenge of diversification is that there is an understanding of what has to be done and how to achieve it.
The previous education minister focused commendably on the increased number of students who were passing exams. Maybe this new minister can focus on developing a curriculum to engender critical thinking and skills to provide the country with the entrepreneurial capacity. That is for the medium and long-term.
Immediately, the Government has to lead through venture capital investment, and to provide the kind of infrastructure and systems needed to encourage and partner with the private sector. It is an option advocated by the Copeland study and one used in Asia.
Maybe the impetus to take on the challenge of economic independence will come from a stalled economy with tens of thousands “on the breadline.”
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