KEVIN RAM­NAR­INE

?"Every morn­ing in Africa, a gazelle wakes up. It knows it must run faster than the fastest li­on or it will be killed. Every morn­ing a li­on wakes up. It knows it must out­run the slow­est gazelle or it will starve to death. It doesn't mat­ter whether you are a li­on or a gazelle: when the sun comes up, you'd bet­ter be run­ning."

This African proverb was re­pro­duced in Thomas Fried­man's book The World is Flat. The book's ti­tle is a metaphor for a changed world where glob­al­i­sa­tion has lev­elled the play­ing field of the world econ­o­my. Fun­da­men­tal to sur­vival in the world of the gazelle and the li­on is the abil­i­ty to at­tract in­vest­ment. I would caveat that by say­ing at­tract in­vest­ment from the right com­pa­nies.

In the world we live in coun­tries com­pete for in­vest­ment. In the USA, dif­fer­ent States ag­gres­sive­ly com­pete against one an­oth­er to at­tract in­vest­ment, es­pe­cial­ly in IT and man­u­fac­tur­ing. In Jan­u­ary 2015, the Econ­o­mist wrote about the In­di­an state of Gu­jarat. They glow­ing­ly not­ed that "Gu­jarat is rich­er, en­joys faster GDP growth and a greater in­ten­si­ty of jobs and in­dus­try than In­dia as a whole." At the heart of this was an in­vestor-friend­ly ap­proach adopt­ed by the Gov­ern­ment of this In­di­an State. It was there­fore no sur­prise when in 2014 Gu­jarat's long stand­ing Chief Min­is­ter was elect­ed Prime Min­is­ter of In­dia.

Many coun­ties in our hemi­sphere, just like the Gazelle and the Li­on, have wok­en up and start­ed run­ning. En­rique Pe­na Ni­eto, the Pres­i­dent of Mex­i­co has de-mo­nop­o­lised his coun­try's ail­ing State oil com­pa­ny Pe­mex and has opened up Mex­i­co to for­eign in­vest­ment. Pe­mex was na­tion­alised in 1938. The world has changed a lot since 1938. It was ar­gued that Pe­mex lacked the cap­i­tal and tech­nol­o­gy to de­vel­op new re­sources of oil and gas and need­ed help.

In Colom­bia there is a sim­i­lar sto­ry. In 2005, Colom­bia pro­duced 526,000 bar­rels of oil per day. By 2013, that coun­try's oil pro­duc­tion passed one mil­lion bar­rels of oil per day. At the heart of that suc­cess were two ap­proach­es. The first was the ref­or­ma­tion of the State oil com­pa­ny Ecopetrol which in­clud­ed an Ini­tial Pub­lic Of­fer­ing. The sec­ond was the of­fer­ing of ma­ture and age­ing fields to small in­de­pen­dent com­pa­nies that had low­er op­er­at­ing cost. There are many more sto­ries of coun­tries at­tract­ing world class in­vest­ment. There is for ex­am­ple the case of the Lee Kuan Yew-led Sin­ga­pore that at­tract­ed Hewlett Packard, Texas In­stru­ments and IBM.

For an econ­o­my to grow it must at­tract in­vest­ment. For com­pa­nies to de­cide to in­vest the busi­ness en­vi­ron­ment must be con­ducive to in­vest­ment. Com­pa­nies in­vest to make a re­turn on their in­vest­ment and cap­i­tal goes to where it is treat­ed the best. This is true of all in­dus­tries. I al­ways as­sumed that this was some­thing that every­one knew and un­der­stood. I might be wrong in mak­ing that as­sump­tion.

In the oil and gas busi­ness, mul­ti-na­tion­als mon­i­tor what is be­ing said by all pol­i­cy mak­ers. They do this to gauge po­lit­i­cal risk. Ob­vi­ous­ly be­fore com­pa­nies in­vest (in some cas­es bil­lions) they as­sess all risk. Oil and gas does not flow to the sur­face at ze­ro cost and ze­ro in­vest­ment nor does it de­pend on mag­ic. When you go off­shore you re­alise the huge risk and the mon­ey in­volved in drilling a well.

Com­pa­nies there­fore in­vest here not be­cause they are oblig­ed. They in­vest be­cause they will get a re­turn on their cap­i­tal that sur­pass­es what they will get in oth­er coun­tries. As far as the oil and gas busi­ness goes we are sim­ply not the on­ly game in town. This is a lev­el think­ing that has to be em­braced soon­er than lat­er.

Switch­ing gears a bit I want to com­ment on na­tion­al eco­nom­ic plan­ning. Most peo­ple don't plan their life for one year. They plan for many years. In like man­ner an econ­o­my should not be planned for one year but for many years. An econ­o­my should not be seen in a 12-month box. It must be seen in terms of five years, 10 years and be­yond 10 years. It is more im­per­a­tive that T&T take a medi­um to long view on eco­nom­ic plan­ning. While politi­cians plan in (at best) five-year cy­cles. Our main rev­enue earn­ers plan in much longer cy­cles. The mis­align­ment there­fore is be­tween pol­i­tics and pe­tro­le­um.

An in­vest­ment made in a nat­ur­al gas pro­duc­tion project in 2014 there­fore can­not be ex­pect­ed yield gov­ern­ment rev­enue in 2015. The cy­cle of "in­vest­ment–drilling�pro­duc­tion�rev­enue" some­times takes as long as three years as is the case of the 0 Ju­niper project or over 10 years as is the case with deep­wa­ter projects.

We must take a longer view of the econ­o­my to nav­i­gate the cur­rent sit­u­a­tion. There will be a T&T in 2017, in 2018 and be­yond. We must al­so be wary not to send the wrong sig­nals to in­vestors es­pe­cial­ly those that have demon­strat­ed a long term com­mit­ment to this coun­try. As a na­tion we must do like the prover­bial Gazelle and the Li­on and start run­ning when the sun comes up least we get eat­en or we starve.