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Where are the jobs?
Mismanagement, coupled with a conspiracy of unreasonable labour requests and falling international energy prices, have finally brought closure to our state refinery. The reasons for this collapse are myriad, and will all be ventilated in the coming weeks and possibly months. But this pivotal moment in our country’s history serves as a stark reminder of the desperate need for the diversification of our economy—development of new sources of vital foreign exchange and jobs.
To compete internationally requires competitive advantage. Competitive advantage means a superiority gained by an organisation or country when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation. Competitive advantage results from matching the core competencies of a country to the opportunities available.
What are T&T’s competitive advantages?
Is it in agriculture?
No. There are South American countries with agricultural landholdings larger than T&T and they are heavily mechanised with cheaper labour costs; local agriculture should be mainly focused on a domestic market. We simply cannot compete internationally in large-scale agriculture.
Is it sun, sea and sand tourism?
Would a leisure tourist from the UK choose a beach in T&T over a beach in Barbados, Grenada, Turks and Caicos?
Who are we?
What do we have to offer the world that few others can?
There is one major competitive advantage we possess that separates us from everyone else in the hemisphere.
The cost of electricity in much of the Caribbean typically lies between US$0.30 - $0.40 per kWh and fluctuates with undulating oil prices. In comparison the cost of electricity in T&To is on average $0.05 per kWh.
The local manufacturing sector has used this advantage to dominate store shelves in the region. With infrastructure developed for the energy sector—ports, roads, skills, tertiary education—T&T is a prime target for foreign direct investment in energy intensive industries, namely iron, steel, plastics and aluminium.
With the retrenchment of hundreds of employees at the now defunct Petrotrin refinery, in which existing industries, will these former employees be absorbed?
Everyone cannot and would not be an entrepreneur. T&T has averaged zero per cent GDP growth in the past decade and the International Monetary Fund expects growth of 1.9 per cent in 2018—modest at best, especially after an extended period of zero average growth.
The recently announced dry docking facility at La Brea, albeit late, is a step in the right direction but government needs to step up its rate of implementing such projects if it hopes to avoid an exacerbated foreign exchange and labour crisis.
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