The 2020 general elections are a mere four days away, and according to the Guardian Media Polls the state of the economy is one of the main drivers behind people’s decision about which political party they will elect come Monday.
It is true that in all the polls a plurality of registered voters felt their economic circumstances had either remained the same over the last five years or improved but at the same time a vast majority worry about their economic future.
Without doubt this is a time to be concerned about the country’s economy and its future.
T&T is facing a challenge that it has not seen since independence.
The country has diversified its energy portfolio from the last major economic shock of the 1980s with a reduced reliance on oil to an energy sector that includes oil, natural gas, LNG, petrochemicals and energy services.
This has allowed us since 1998 to enjoy unprecedented economic growth but has still left the country vulnerable to energy shocks.
With the shut-in of demand for commodities caused by the coronavirus and the underlying weakness in global energy prices as a result of ubiquitous natural gas in the US and many other countries and the increasing impact of efforts to fight climate change, the future seems to suggest that the revenue streams from all T&T’s energy products are likely to be depressed over the next five years.
In other words, whoever is in power cannot rely on the energy sector, in and of itself, to return the country to the economic prosperity it witnessed in the early 2000s to 2008 and the high revenues from 2011 to 2014.
So, what are our options as a country?
Well as you will read in Joel Julien’s piece on Page 5, the two major political parties have expressed a desire to diversify the economy. The UNC is promising 50,000 new jobs but is short on details about how these jobs are to be created.
For the PNM diversification of the economy centres around digitisation, a refocus on agriculture, support for arts and culture, manufacturing and there is almost a cursory acknowledgement of tourism.
The PNM’s manifesto promises to drive and execute 13 key digital projects over the next three years, to rapidly facilitate an Enabling Digital Environment in T&T post COVID-19.
The party added that it will also establish a Ministry of Technology and Digital Records to create the T&T Digital Economy based on three main principles: access, data and trust.
The UNC’s Economic Transformation Masterplan 2020-2025 highlights five initiatives, one of them being the investment of 1 per cent of GDP in research and development. The other initiatives of the UNC include the formation of a national venture capital fund, the development of a digital innovation park, the establishment of a digital identification programme and the implementation of a national e-payment platform for government services.
Both parties’ commit to the creation of investment funds for tech, with the UNC’s proposing a Digital Innovation Park.
Both the PNM and UNC manifestos say they are committed to driving private sector involvement in payments, access and innovation but the PNM goes further and includes direct policy and legislative support for the accomplishment of this.
On the question of agriculture the PNM commits to spending an additional $500 million next year on the agriculture sector, inclusive of improving access roads, assistance in improving the quality of the crops and marketing those crops and, importantly, it has a focus on the use of digital technology in agriculture.
The UNC’s agriculture plan talks about using Caroni lands to create centres of production and promises to pay former cane farmers money which they say is owned to them as a result of a grant from the European Union. The UNC has also promised to restart the sugar industry and with the assistance of the private sector and restart the St Madeleine sugar factory.
In Geisha Kowlessar’s story the UNC is roundly criticised for its agriculture plans in its manifesto and this is no surprise as most people would be aware that T&T simply is in no position to compete in the global sugar industry as we have long tried and lost billions of dollars with the now defunct Caroni 1975 Ltd.
Both parties fail to put forward any real plan for tourism and not withstanding the challenge of COVID19 it is a travesty that both the ruling PNM and the Opposition UNC seem clueless or uninterested in what could be a low hanging fruit with high levels of job creation.
Tourism is not just about trying to get a branded hotel in Tobago but it is about branding, airlift, accommodation, standards for hotels, guest houses, Air BnB, transportation, restaurants, tours and tour operators and sites and attractions.
There seems to be no thought about how T&T can bring its own brands to the market and how the two islands can collaborate to ensure that we share in what is one of the biggest industries globally. The PNM has never embraced tourism and its manifesto shows nothing has changed and the UNC does not see it as part of the country’s future.
On the issue of energy, the announcement by BPTT yesterday to fundamentally change the company from an oil and gas entity to one that is fully integrated with a focus on renewables and clean energy has significant implications for T&T. Already it will immediately mean projects in T&T will have to fight for approval in a radically slashed budget.
BP has already exited its petrochemical business in T&T and while it remains vested in LNG and is the country’s largest natural gas producer, the issue is, will it continue to invest in the business or are we seeing the start of what will be a departure or a reduction in the influence of what Lord Browne once described as the jewel in the crown of BP?
Both parties talk about the need to increase exploration in the deep water, they agree to changes in the Supplemental Petroleum Tax with the PNM proposing the threshold of US$75 a barrel, but where both parties fail badly is in any proposed solution to the crisis in the downstream petrochemical sector.
The challenge of the sector not only threatens its viability but that of the NGC and even of the continued operation of the upstream. We saw from a recent Cabinet note that closure of plants downstream has forced upstream producers to cut back production substantially. This is a fundamental challenge to the economy and the voters will go to the polls with no proposed solution from either main parties.
The reality is that most voters do not feel that the parties have the solution to the challenges we face and both the UNC and PNM manifestos show they recognise the problems but have not offered many solutions. They speak in general terms, perhaps as a strategy of not committing themselves, and in the case of the PNM, explaining why they failed to implement their 2015 manifestos.
It is why today’s BG’s headline is—No Confidence—because there is little assurance that either party will implement or solve the challenges of our time.