Williams: Bleak future for T&T energy sector
Former Central Bank governor Ewart Williams holds a gloomy view of the country's energy sector.
He will expand on this today at this year's "Conference on the Economy" at The University of the West Indies, St Augustine.
The theme is "50 years of Managing for Development in an Ever Changing Economic Environment: Lessons Learnt and the Way Forward".
In a recent interview leading up to the conference, Williams declined at first to speak on the national budget.
Instead, he signalled his intention to kick off today's forum by reflecting on T&T's macroeconomic development and economic policies over the last half-century. And it's going to be a lot of doom and gloom, he admitted.
"I take the pessimistic view of the outlook for the energy sector," he said. "The last Ryder Scott report said we have ten to 12 years of reserves left. Governments like to say, 'Don't worry, we'll find something.' Not only is it not the correct way to plan a country, it's irresponsible."
And although many conferences, papers and articles have been warning that sooner or later the oil and gas will run out, nothing has been done to shift the economy away from its dependence on hydrocarbons.
"Except, it's becoming more serious now," Williams insisted. "Because whilst God is a Trini, there are indications that perhaps there isn't all that much oil and gas for that long a period of time. Just in terms of volume. More than oil, we are a gas economy. What's happening in the US is that shale gas is taking over and now you having massive investments in the US in shale gas."
In 1962, the plan was that the country would use its energy revenues to transform the economy so that one day, when the oil and gas was no longer running like water, the standard of living would remain as high or even higher for the population.
"Unfortunately government revenues are being wasted," Williams said. "And secondly, the bulk of the money is ending up in construction activity and in malls, things that are not sustainable. Once the oil revenue ends, and the foreign exchange is not there, you will not have the money to build the malls."
Williams, who spent a decade at the Central Bank, is currently chairman of the Campus Council at UWI.
He says there have been successes that Trinidad and Tobago should be proud of, such as the Point Lisas Industrial Estate.
He ended by musing on the need for change in the present political system, where governments face the polls every five years.
"Would politicians' outlook change if they only had one term?" he asked. "Would they work in the country's interest instead of the re-election cycle? These are legitimate questions.
"The budget deficit is going to be $7 billion this year, and the Minister of Finance says we're going to reduce the deficit by one per cent every year. Hello? Which government, which Prime Minister, two years from elections, is going to let you do that? You can't do it now, you going to do it next year, when they start to prepare for elections? Or the year after? We're not stupid. You can't do it then because of the electoral cycle. You can't."
Williams will deliver the feature address on the opening today of the sixth annual Conference on the Economy, at the Learning Resource Centre, UWI. For more information, contact COTE 2012 Secretariat: Tel: 662 2002 Ext 83231, or 83852.