Over the last two weeks a num­ber of things oc­curred in the down­stream petro­chem­i­cal sec­tor and by ex­ten­sion the econ­o­my of T&T.

La Brea based Caribbean Gas Chem­i­cals Ltd CG­CL start­ed load­ing its first car­go of methanol for ex­port from its new­ly mint­ed fa­cil­i­ty. This must be a re­lief for its share­hold­ers.

CG­CL is a joint ven­ture led by a con­sor­tium com­pris­ing Mit­subishi Gas Chem­i­cal Com­pa­ny, Inc, Mit­subishi Cor­po­ra­tion, Mit­subishi Heavy In­dus­tries, En­gi­neer­ing Ltd., The Na­tion­al Gas Com­pa­ny of T&T Ltd and Massy Hold­ings Ltd.

CG­CL com­menced con­struc­tion in Sep­tem­ber 2015 of its US$990 mil­lion Methanol and Di-Methyl Ether (DME) Fa­cil­i­ty at Union In­dus­tri­al Es­tate (UIE), La Brea.

The ship­ment there­fore comes more than five years af­ter the break­ing of ground for the con­struc­tion of the methanol to Di­methyl Ether (DME) plant and is a sig­nif­i­cant step for­ward for the com­pa­ny.

Pro­man Group, the sec­ond largest methanol com­pa­ny in the world, which has sig­nif­i­cant in­ter­est in T&T al­so an­nounced the tem­po­rary restart of one of its methanol plants that had been idled.

In ad­di­tion Nu­trien, one of the largest am­mo­nia com­pa­ny in the world and one of the largest sin­gle users of nat­ur­al gas in T&T said it will in­def­i­nite­ly keep its 600,000 met­ric tonne per an­num plant shut.

This means job loss­es for close to 30 per­ma­nent work­ers and the NGC hav­ing to pay for a tranche of gas that Nu­trien no longer needs or if not sell it on­to an­oth­er cus­tomer.

Mean­while on Mon­day, the gov­ern­ment host­ed its spot­light on the econ­o­my in which it was ex­pect­ed to be frank and hon­est with the pop­u­la­tion.

I say ex­pect­ed be­cause it is clear that at least on the is­sue of the petro­chem­i­cal sec­tor the Min­is­ter of Fi­nance Colm Im­bert’s analy­sis shows a lack of un­der­stand­ing of the chal­lenge or he is be­ing his usu­al pal­ter­ing self.

You see Im­bert ar­gued that the chal­lenge of the petro­chem­i­cal sec­tor is be­cause of the col­lapse of glob­al com­mod­i­ty prices.

This is true but it is not the whole sto­ry. If the Min­is­ter of Fi­nance was pre­pared to be frank with the pop­u­la­tion he would have agreed that the cost of pro­duc­tion of the plants had gone-up sig­nif­i­cant­ly due to the in­crease in the price of their ma­jor feed-stock nat­ur­al gas. What the Min­is­ter will not say is that T&T as a des­ti­na­tion had be­come in­creas­ing un­com­pet­i­tive be­cause the up­stream com­pa­nies were able to get high­er prices for their gas fol­low­ing the in­ter­ven­tion of Prime Min­is­ter Dr Kei­th Row­ley in what his Min­is­ter of Na­tion­al Se­cu­ri­ty used to call the fa­mous Hous­ton trip.

All the Min­is­ter of Fi­nance has to do is look at the Ter­rence Far­rell study in which two years ago he demon­strat­ed that the sec­tor was at a point of in­flec­tion and at that time the com­pa­nies were strug­gling to even gen­er­ate free cash flows, let alone prof­its to share­hold­ers. The Row­ley ad­min­is­tra­tion in its usu­al way, dis­missed it be­cause it was not part of the nar­ra­tive it was try­ing to push that it had res­cued the en­er­gy sec­tor.

The truth is that high­er unit costs due to the ris­ing price of nat­ur­al gas and nat­ur­al gas cur­tail­ment threat­en the vi­a­bil­i­ty of the sec­tor and un­less the prices of com­modi­ties re­cov­er to such an ex­tent that it is prof­itable to pro­duce, the plants will re­main shut. Com­pa­nies can­not op­er­ate over the long haul with­out re­turn­ing val­ue to their share­hold­ers.

Mr Im­bert, per­haps in a mo­ment of clar­i­ty, you would al­so read the Roadmap to Re­cov­ery re­port which clear­ly iden­ti­fies the dan­ger of T&T loos­ing its down­stream sec­tor.

The re­port says: “Trinidad and To­ba­go is fast be­com­ing a mar­gin­al am­mo­nia and methanol pro­duc­er and must quick­ly find a way to bridge the down cy­cle to avoid the risk of be­ing ra­tio­nalised in favour of oth­er pro­duc­ers.”

If Mr Im­bert wants to be truth­ful with the pop­u­la­tion he would al­so ad­mit that the gov­ern­ment has fi­nal­ly or is at least be­gin­ning to re­alise that the sta­tus quo can­not con­tin­ue in the petro­chem­i­cal sec­tor and has hired a firm to do a study on the gas val­ue chain.

Again the Roadmap to re­cov­ery com­mit­tee is spot on. It says in its re­port:

“In this re­spect, con­sid­er­a­tion must be giv­en to ur­gent en­gage­ment of the Gas Val­ue Chain re­cal­i­bra­tion to op­ti­mise gas and com­mod­i­ty out­put in the short term.”

Part of the prob­lem Mr Im­bert has had over the last five years is her profli­ga­cy for mis­s­peak­ing and once again he did it on Mon­day. The coun­try de­serves bet­ter.

The Roadmap to Re­cov­ery com­mit­tee points in this di­rec­tion, it warns that on Mon­day when the Min­is­ter of Fi­nance presents his bud­get he must com­mu­ni­cat­ed in next week’s na­tion­al bud­get in a “frank and forth­right con­ver­sa­tion with the pop­u­la­tion.”

The com­mit­tee recog­nised that com­mu­ni­ca­tion and truth are the on­ly way to get the kind of buy-in re­quired to make the struc­tur­al changes.

The coun­try has lost bil­lions of dol­lars in wealth caused by COVID-19. The com­mit­tee warns of in­ter gen­er­a­tional pover­ty and the debt trap if we do not get it right. It re­quires forth­right and open dis­cus­sion and the vic­tim can­not be the truth.

As iden­ti­fied by the com­mit­tee in its re­port the fol­low­ing must be done.

• Re­duc­tion in the lev­el of im­ports, be­gin­ning with a re­duc­tion of the food Im­port bill through the pro­posed agri­cul­ture stim­u­lus (Tar­get­ed re­duc­tion is $2 bil­lion by 2022)

• Ac­cel­er­at­ed em­ploy­ment of tar­get­ed PPP arrange­ments for in­fra­struc­tur­al de­vel­op­ment as well as lever­ag­ing of idle ca­pac­i­ty in the pub­lic sec­tor. Spon­sored parks eg E-id­cot, Eteck etc must be ful­ly ac­ti­vat­ed. (The lev­el of ac­tiv­i­ty aimed at here could be $1.5 bil­lion)

• In­crease of non-en­er­gy earn­ings us­ing the Ex­im Bank, Ex­porTT and oth­er pri­vate sec­tor part­ner­ships (The earn­ings tar­get here could be $1 bil­lion

• Ra­tio­nal­i­sa­tion of trans­fers and sub­si­dies pred­i­cat­ed on a unique e iden­ti­ty sys­tem to make trans­fers and sub­si­dies more ef­fi­cient while pro­tect­ing the vul­ner­a­ble and to make state-owned en­ter­pris­es more self-suf­fi­cient whilst care­ful­ly con­sid­er­ing a di­vest­ment pro­gramme for non-core as­sets (con­ser­v­a­tive­ly $1.5 bil­lion)

• Fo­cus on in­no­va­tion and en­tre­pre­neur­ship to stim­u­late the mi­cro and SME sec­tor tar­get­ing tra­di­tion­al and non-tra­di­tion­al ar­eas.

“This is the defin­ing mo­ment to change pro­duc­tiv­i­ty lev­els and cul­ture to em­brace dig­i­tal­i­sa­tion, to think, re-en­gi­neer and act trans­for­ma­tive­ly and ex­e­cute dif­fer­ent­ly,” the re­port read.

This is al­so a time for Mr Im­bert to come clean with the num­bers, to come clean with the pre­scrip­tions and to recog­nise that true so­lu­tions are nev­er found in group think.

It is why the coun­try must al­so re­sist any at­tempt to foist on the Cen­tral Bank any­one whose job will be to ac­qui­esce to the gov­ern­ment and Min­is­ter Im­bert’s in­ter­est and not the in­ter­est of the Cen­tral Bank and in­de­pen­dent ad­vice on mon­e­tary pol­i­cy.