EDITORIAL: Don’t return to one-sector economy
THERE IS NO DOUBT that Trinidad and Tobago’s petroleum-based economy has separated it from its Caribbean neighbours in many ways. In this vein, no matter where you are in the region, it is not uncommon to hear public speakers refer to the country as the “oil-rich republic”.
Oil and gas exploration, exploitation, processing and export have sustained the Trinidad economy for decades. Every aspect of life in that country – the good and the bad – is in some way linked to petroleum, so much so that other sectors were relegated to a very distant second place.
And while oil prices boomed on the world market, it would appear very few cared – and perhaps there was not a lot of incentive to. A year and a half ago the price of oil reached a record US$120-plus per barrel on the world market and it was like heaven to Trinidad’s policymakers.
Trinidad’s comfort in high oil prices remained clearly evident when the numbers started to fall, we suspect largely because it was coming from such a high, and the kinds of adjustments prudence would have dictated be taken clearly were not considered.
Today, the price is hovering around US$30 per barrel and Trinidad authorities have gone into crisis mode. For the Trinidad government, managing an economy with such a dramatic fall in revenues over such as short period must present a mammoth challenge.
And this brings us to the crux of our article: the need for Barbados and other Caribbean countries to hold dearly to every lesson that can be learnt from the Trinidad scenario. For us in Barbados, having endured almost a decade of economic struggles, the lessons should have greater significance.
In many ways in Barbados, tourism was our “energy sector” for decades. We depended on it so heavily that when the world economy crashed and the ability of many to travel was retarded, it cut us deeply – and the haemorrhaging was extensive. As we start to see light at the end of the proverbial tunnel, even as we seek to exploit tourism to the maximum, we should be smart enough not to recreate what was essentially a one-sector economy.
Without doubt tourism has the potential to be the main driver that will get us out of the economic hole, but we should not lose sight of the grave danger of not giving due respect to other avenues. We should not neglect the potential of modern-day agriculture, selective manufacturing (even if it is not in large factories with 400 or 500 workers as in past years), offshore business, education as an economic sector, and other emerging economic opportunities.
Today’s world economy is too fickle for us to take the comfortable approaches of the past, and if we are to offer Barbadians the number and quality of services the country has enjoyed over the past 50 years, we have to ensure that all potential economic pathways are fully exploited.
The trauma Trinidad has started to experience, and which forecasters have predicted will become more acute before it gets better, will not go on forever, but we are reasonably sure those who are charged with making critical decisions will recognise it would be unwise to ever again put all the country’s economic eggs in one basket.
The lessons for Barbados are no less critical.