An­dre Wor­rell

Chair­man of the Eco­nom­ic De­vel­op­ment Ad­vi­so­ry Board (EDAB) Ter­rence Far­rell be­lieves the pri­vate sec­tor must lead ef­forts to di­ver­si­fy the T&T econ­o­my.

Far­rell was the keynote speak­er at an event at the UWI St Au­gus­tine cam­pus en­ti­tled How to Di­ver­si­fy Trinidad and To­ba­go. The event, the fourth in an on­go­ing se­ries of pub­lic dis­cours­es is a col­lab­o­ra­tive ef­fort be­tween the UWI Trade and Eco­nom­ic De­vel­op­ment Unit (TEDU), the Sir Arthur Lewis In­sti­tute of So­cial and Eco­nom­ic Stud­ies (SALIS­ES) and Guardian Me­dia Lim­it­ed.

In his pre­sen­ta­tion, Far­rell said: "I am ad­vo­cat­ing strong­ly that it is our lo­cal pri­vate sec­tor busi­ness­men and women who must lead the di­ver­si­fi­ca­tion ef­fort across a broad front. My ar­gu­ment for the pri­vate sec­tor is prag­mat­ic. The lo­cal pri­vate sec­tor has bet­ter man­age­ment ca­pa­bil­i­ty, stronger mar­ket­ing skills, su­pe­ri­or dis­cern­ment of busi­ness op­por­tu­ni­ties, and have ac­cess to some amount of cap­i­tal."

He said the Gov­ern­ment should stay out of the busi­ness of "pick­ing win­ners" but had a role to play in cre­at­ing an en­vi­ron­ment con­ducive to sup­port­ing the ef­forts of the pri­vate sec­tor.

"Gov­ern­ment must get the macro­eco­nom­ic bal­ance right. It has to ap­ply the right in­cen­tives and dis­in­cen­tives in or­der to shape pri­vate sec­tor be­hav­iour. It has to reg­u­late mar­kets ef­fi­cient­ly and fair­ly and in lim­it­ed ar­eas of strate­gic sig­nif­i­cance it should be in­vestor or co-in­vestor in cer­tain busi­ness op­por­tu­ni­ties," he said.

Far­rell high­light­ed that past at­tempts at di­ver­si­fi­ca­tion had failed be­cause of a lack of com­mit­ted ef­fort based on the no­tion that de­clines in hy­dro­car­bon rev­enues were tem­po­rary.

"The cur­rent lev­el of oil and gas prices is cer­tain­ly not pro­pi­tious for us. But to some ex­tent, how­ev­er, in many Trinida­di­an hearts, there is the hope that oil and gas prices will re­bound, that oil and gas rev­enues will flow again and the fete will re­sume. This hope has di­lut­ed com­mit­ment to the di­ver­si­fi­ca­tion agen­da. Our ef­forts are half-heart­ed, in­de­ci­sive and slow."

Ac­cord­ing to Far­rell, part of the prob­lem with achiev­ing any mea­sure of sus­tained ef­fort at eco­nom­ic di­ver­si­fi­ca­tion is that the con­cept of what a di­ver­si­fied econ­o­my was had nev­er been clear­ly de­fined.

"The de­f­i­n­i­tion of di­ver­si­fi­ca­tion adopt­ed by the EDAB is an in­crease in ac­tiv­i­ties which are ca­pa­ble of gen­er­at­ing for­eign ex­change earn­ings or sav­ing for­eign ex­change. We have adopt­ed this ap­proach for sev­er­al rea­sons. We be­lieve that the gen­er­a­tion of for­eign ex­change earn­ings is the right fo­cus in the cir­cum­stances of our ex­ces­sive de­pen­dence on ex­ports of oil, gas and petro­chem­i­cals and the pre­sump­tion that glob­al de­mand for all these prod­ucts will be de­clin­ing in the long term."

Far­rell's pre­sen­ta­tion was fol­lowed by an in­ter­ac­tive pan­el dis­cus­sion on di­ver­si­fi­ca­tion and an open fo­rum where mem­bers of the au­di­ence were al­lowed to ask ques­tions and re­ceive re­spons­es from pan­el mem­bers.

The oth­er mem­bers of the pan­el were Dr Roger Ho­sein, se­nior lec­tur­er in the UWI De­part­ment of Eco­nom­ics and co-or­di­na­tor of TEDU; Pro­fes­sor Patrick Wat­son, di­rec­tor of SALIS­ES, and An­tho­ny Wil­son, chief ed­i­tor � Busi­ness at the T&T Guardian. The event was chaired by Mar­tin Franklin, this year's hon­oree at the just con­clud­ed Con­fer­ence on the Econ­o­my.