"NEW" ECONOMICS


We all are (or ought to be) familiar with Albert Einstein's famous definition of insanity: doing the same thing over and over again while expecting a different result. It seems to me that this is what we have been doing for a long time ... too long. Quite frankly. I cannot discern any real difference between the economic philosophies and policies of this administration from the last, despite all the rhetoric to the contrary and despite all the previous hype about "new politics". If there are policy differences, then could somebody please explain them to me.

The economy is central to everything ... the war against crime, the making of a better life for the citizenry, better health care, better education, better roads ... everything! If the economy fails then everything else sooner or later (and usually sooner) will also fail. Once you understand this fundamental fact then you will understand why I keep going on about the economy and what the Government is or is not doing about it.

Back in 1987 the "flavour" of the time was "trickle down economics". This was an economic theory that had two powerful adherents ... Ronald Reagan and Margaret Thatcher. When the NAR Government came in under A.N.R. Robinson it followed the principles of this theory slavishly. The argument then was that T&T needed to adopt these type of economic principles in order to get out of the rather deep hole that we had dug ourselves into. At the time I was an Opposition Senator and argued that you could not run a country like a business ... a country was not a business, and that if you attempted to do so then while you would get the country out of the hole what would happen is that the rich would get richer and that the poor would get poorer and the middle class would be squeezed out of existance.

Well, Manning came to power in 1991 and persued the same economic policies. Then came Panday in 1995, and Manning again in 2001. As far as economic policies are concerned nothing changed. (This has nothing to do with Manning's squandermania ... we are talking about economic policies! Even the best policies go awry when the wealth of a country is squandered). And here we are back at the beginning as it were ... 1987 all over again. (It is interesting to note, by the way, that Mr. Dookeran was the Planning Minister in Robinson's Cabinet back then).

Time has, most unfortunately, proven my 1987 arguments correct. The gap between rich and poor is now much greater than it ever was, and the middle class is gasping for breath on its death bed. If the present Finance Minister continues on his present course he might get us out of the hole, but at a terrible cost. It would be like the famous medical joke: the operation was a success but the patient died!

So, what to do? We ought to take another look at how we are doing things. Maybe we should take a leaf out of former President Bill Clinton's idea of "invest and grow economics" as opposed to the outdated and discredited "trickle down" theory. We need to start creating ... like yesterday ... a new investment paradigm. We need to make T&T a place where people will want to come and live and invest. Do you know, for example, that Brazil is enjoying an influx of qualified and educated Europeans who, unable to find work in their own countries are now migrating en masse to Brazil? This 'reverse' brain drain is beginning to cause such concern that just last week you had the BBC reporting on it. Educated immigrants build a country. So, why don't we look at this possibility? And if you tell me in a rather smug manner that you are, then what are you doing about it?

Put another way, the time has come to stop all the "ol' talk" which we are so good at. No! The time has come to perform ... get things done! As the old Basdeo Panday used to say ... and he was right ... performance beats old talk every time! We don't need a lot of half baked theories, nor do we need a bunch of badly articulated speeches. We need action ... now! And just in case you didn't understand "now" means now!

REAL "NEW POLITICS" - CHANGING THE PARADIGM



The just concluded budget debate was as uninspiring as the erstwhile Finance Minister's budget presentation. It is almost as if every single Parliamentarian was absolutely determined not to outshine the Minister when it came to his ideas on the management of the economy. Everybody payed lip service to the old idea that "we have to stop depending on our oil and gas" (and I have put the phrase in inverted commas on purpose), but nobody came up with any new ideas as to how we should achieve this obviously desirable goal. Nobody stood up and articulated a vision as to how we should or could achieve this highly desirable goal. Because let's face it, the oil and gas will run out one of these days! And then what?!

Looking at the relationship between Government and the private sector in this country since dinosaurs roamed the earth (or at least since independence) it is difficult to come to any other conclusion but that the private sector has failed miserably and/or been unable to meet the great challenge of being able to pay its own way as far as exports are concerned. In other words, if it weren't for the oil and gas revenues we would not be anywhere near the level of development that we now enjoy. So, the big question is why? Why hasn't the private sector 'stepped up to the plate and performed as it should have? They have had almost fifty years to do this! So? Why haven't they?

A friend of mine has suggested to me that one of the reasons for this is quite simple: all elected governments tend to become elected dictatorships for their term in office. In good old T&T the business class has tended to "suck up" to the Administration of the day and behave as supplicants rather than as partners. The result to date has been that the elected politicians tend to preen their feathers and enjoy their temporary and apparent superiority without bothering to realise that this attitude has stymied economic growth for the last fifty years! It is more fun to deal with a supplicant rather than with a partner. Having to deal with a partner would mean that you have to listen to his views ... which can occasionally be inconvenient. But if the rules mean that any time you want to get something that you have to come to me for permission then my ego is inflated and there is a good chance that I can get my pocket fattened as well. So, it ain't really in my interest ("me" being a politician of any political party who is either in office at the moment or who has hopes of one day being in office) to fix the problem or change the rules in any meaningful way that would allow you to make decisions without having to beg or ask me for a favour.

Let me put it another way: there are a host of things that require governmental approval or licences. At any given time on any given subject, the businessman has to jump through hoops to get his approval. There is no such thing as a fast track for anything, ranging from the simple application for a passport to the obtaining of an energy licence to do exploration. Work permits continue to be difficult to obtain, even when the foreigner invests substantial sums in the country. The prevailing attitude from those in charge of the State apparatus is that they are doing us a favour ... and not the other way around ... by giving us a licence or permission for whatever!

If you compare Trinidad and Tobago with Singapore you will get an idea of where I am coming from. In Singapore the Government treats with the private sector as partners, not as supplicants. Decisions on all matters are quick and informed. The Government there does not try to supplant or dominate the business community.The result has been that a small country with no apparent physical resources has boomed in the last fifty years. Things work there ... and work well! A lot has to do with attitude, especially the attitude of the politicians and the civil servants.

We have to start realising that it is not sinful to make money and to start creating an environment that is truly "business friendly". This is not to say that the business community is without sin. Don't let me get started on that! Maybe the sins of the business community can be the subject of another post, but let's deal with one thing at a time.

"New politics" (that grossly over used and over abused phrase) ought to be revisited again ... and this time it ought to mean something. It ought to mean creating a new and efficient business environment. It ought to mean that we are finally growing up and realise that our favourite colour should be the colour of our hundred dollar bills ... blue!

AN OLD COWBOY & INDIAN MOVIE


Okay. I think that now is about the time in the old cowboy movies when the wagons had been circled and the Indians were riding around shooting flaming arrows into them and amunition was running low that you would hear the sound of a bugle and you knew that at the last minute the cavalry was going to appear from just behind the hill and chase the Indians away saving everybody except for a couple of bad guys in the wagon train who had been conveniently killed by the Indians. In other words, now is the time for the cavalry (in the form of the Prime Minister) to take charge and fire her Finance Minister before all the wagons (the economy) are completely burned and the Indians (the economic problems facing us) completely overwhelm the wagon train (the country).

The budget presented by Mr. Dookeran was wooly, lacked any kind of detail, pretended that nothing had been promised last year and therefore there was no need to refer to any of the unkept promises from last year (because they simply didn't exist in his mind), and did absolutely nothing to engender confidence in his stewardship of the economy. It was a hodgepodge of good wishes and vague promises. In simple English, look out for more of the same that we have endured over the last year. Things just aren't going to get better ... in fact, they will probably get worse!

If I am proven wrong then I will be the first person to sing 'Glory Halleluiah!! Thank goodness that I was wrong!" I genuinely do not want to be right! But if I am right ... and, unfortunately, I believe that I am ... what are we going to do? Hold our collective heads and bawl "woe is me!"? Well, that is one solution. Another would be to take charge of our destiny by telling the Prime Minister that while we still have confidence in her, regretably, we do not have any confidence in Mr. Dookeran's ability to manage our economy. Let's face it! He has failed to deliver! And the sooner that we face up to this the better. I know that I am mixing metaphors here, but we have to stop being the people who see that the Emperor is naked and pretending that he isn't.

Can the economy be saved? The short answer is 'yes'. But it cannot be saved and will not be saved unless there is leadership with clear and well articulated policies and ideas to get us out of the stinking morass that we find ourselves in. And regretably, that just ain't comin' from our hapless and seemingly helpless Finance Minister.

Actually, he should count himself lucky, because the Opposition PNM is even more hapless and helpless than he is. Dr. Rowley and his cohorts are continuously reminding all of us why we voted them out last year. Dr. Rowley's budget contribution failed to gain any traction, nor has he been able to articulate even his good points (because he did have a few) in a way that resonated with the average person. The truth is that the PNM is suffering from a dearth (as well as a death)of leadership. It is hard to believe that it could have ever happened, but Dr. Rowley's performance over the last 16 months or so has had the obviously unintended effect of making Patrick Manning look good!

But Kamla should not sit back and take too much comfort from the PNM's obvious disarray. The old truism that oppositions do not win elections ... governments lose them, still holds true today. The Prime Minister cannot rest on the fact that she is today the most popular politician in the country. Nor should she take comfort from the fact that the majority of the population still supports her Government. She should remember that the Indians in the old cowboy movies were able to inflict tremendous damage on wagon trains that carried with it incompetent persons who failed to live up to their responsibilities to guard the wagons and the people inside. How many old movies have you seen where a guard fell asleep and the Indians were able to sneek up, kill him and then cause serious damage to the wagons and their occupants? Usually in those old movies, the hero/heroine would see the Indians sneeking in and raise the alarm. We need the heroine in this real life cowboy and indian movie to raise the alarm right now. She is the only one who can do it. Put another way, give Mr. Dookeran another job. Anything! Send him to China! Anywhere! Just get him out of Finance. We can't afford him there much longer.

LEADERSHIP AND THE BUDGET


In a few days from now the Minister of Finance is going to unveil his 2011-2012 budget. There are many who are predicting that the very large gasoline or fuel subsidy will be radically reduced if only because we can no longer afford it. There are others who are predicting (including the Minister) that there will be several "surprises" ... and that most of them will be unpleasant. (Though, to be fair to the Minister, although he has said that there will be "surprises", he hasn't said that they will be unpleasant.) My question is why is it necessary for there to be "surprises" (especially unpleasant ones) from a politician who spent years preaching transparency and open government?

And this brings me to the central point of this post: Leadership! I have said it many times ... the only test for leadership is to lead and to lead vigorously! But in order to lead you have to have some idea of where you want to go. You don't want to lead people, for example, off a cliff onto the sharp rocks below. In order to lead vigorously you have to explain where it is that you want to go, why you want to get there, how you intend to get there, and what everyone is going to have to do in order to get to that "shining city on the hill". Once you do that you will find that if your ideas are clear and logical people will happily follow, even if it entails some immediate sacrifice on their part. But, if you don't explain yourself properly and just in effect say 'well, this is what I am going to do and I expect all of you to be quiet and just fall in line' , then you will sooner or later get a lot of grumbling that will eventually spill over into serious protest that is neither welcome nor healthy for any democratic society.

The truth is that people only resort to protesting when they feel that their leaders are not listening and/or don't really care about the problems that are being encountered by the protestors in their day to day lives.If people feel that their leaders care and are doing the best that they can in all of the circumstances they will "take the pressure". But it is so very important that the people can see the light at the end of the tunnel and understand why it is necessary to "go through the tunnel" all the way until the end.

The present Finance Minister is regarded by many as having failed in his stewardship of the economy over the last 16 months that he has been in office. To those who would disagree I say look at the fact that the TT dollar has slipped from $6.30 to US$1.00 down to about $6.47 to US$1.00 in the last 16 months ... and it continues to fall. The Central Bank has said that the reason for the slippage is the high demand for US dollars. Why would anyone want to convert his TT dollars into US dollars at this time in history when the pressure on the American economy is terrible, the immediate prospects for teh American economy are anything but good, and interest rates in American banks on deposits hover at around half of one percent? There is only one answer that makes sense: people with money have more confidence in the American economy than they do in the Trinidad one! Then you have only got to listen to almost every businessman complaining that "things are slow". Yes! Things are slow! Unemployment is rising slowly and people are finding it harder to make ends meet. Maybe things might have been worse if you, Mr. Minister, had not done certain things. But is it too much to ask you to tell us the truth, the whole truth, and nothing but the truth about the economy, Clico and everything else?! Because let me tell you something: It is not too much to demand from you that you tell us what has been going on and what you intend to do in clear and unequivocal terms. You didn't do that last year!

And therein lies the case for leadership. The Minister should understand that he has precious little time left to lead us out of the stagnation that we have found ourselves in. I do understand that a lot of the problems that the Minister is grappling with are not of his making. But that ain't the point! The point is that we voted for you to solve these problems for us. Speaking for myself only, I really do hope that the Minister does not spend an inordinate time on Monday telling us all about the problems. Hello! We know what they are. What we want to know is how you are going to fix them and why you believe that the solutions that you are presenting will work. We also want to know what are your benchmarks for success.

If you do that Mr. Minister, everyone (including me) will praise you and call you a hero. If you don't do that, then quite frankly, and as nice as you are, the Prime Minister should fire you, for you clearly cannot lead. And leadership is what we so desperately need right now!