Sunday, December 17, 2017

In our own little worlds

Whilst it was rally versus rally in Woodford Square and Mid Centre Mall last week, China and Russia agreed to a US $400 billion deal to pipe natural gas from Siberia to China for 30 years. The agreement also marks an alignment of the major anti-Western powers, presenting the possibility of a new kind of bi-polar world. But more of that another time.

We also learnt last week, amidst our railing and rallying, that Canadian gas will be heading to Europe as Repsol, which was once here, could build a $2 billion LNG export terminal on Canada’s Atlantic Coast; and that in the United Sates, now the world’s largest natural gas producer, with 100 years of reserves, the Department of Energy approved a sixth LNG export terminal aiming to penetrate the Asian and European markets.

We hope amidst the hullabaloo and hoarseness of rallying and counter rallying, somebody sees these developments as important, since, whenever anyone mentions the loss of our US LNG market which fuelled our gas boom, we hear placating assurances from the Government about shifting our exports to Europe and Asia, particularly China.

I hope they know, in addition to Russian gas, China now has the world’s largest deposit of shale which, notwithstanding difficulties, China is already seeking to exploit.

And there is more to be concerned about as we head for more rallies towards 2015. Whilst Petrotrin’s ageing pipelines spewed oil into our mangroves and seas, Mexico, facing declining production, has already embarked on historic reform, as state-owned Pemex will yield its monopoly and allow production-sharing contracts. And whilst oil production continues to decline in Trinbago, Canada increases output from oil sands which will reach the US market through the Keystone XL pipeline; Brazil, Colombia and East African countries will add to surging global supply; Iraq’s oil production has already gone past the Saddam era; Libya has pushed output of its coveted “sweet crude” to 750,000 barrels, still only half its capacity; and Iran, with agreement likely over its nuclear programme, will also pump more oil and gas onto the market.

There is even an attempt to revive North Sea oil. Add to all the foregoing, renewables, moving fast to attain 15 per cent of the global market by 2035, and you see the economic challenges for any country dependent on its energy sector. Even the Saudis are worried. But here at home, bile and buffoonery constitute our politics whose principal responsibility ought to be the viability of this country.

And still more out there. Six years since the financial crisis, even with the US economy producing jobs, there are no signs of the inflationary environment that comes with robust growth. In fact, according to the Wall Street Journal, “deflation risks are evident in price data from economies as different as Sweden’s and Hungary’s, and the overall conclusion is an overwhelming excess of production, depressing prices everywhere”.

Global demand is down and even phenomenal China is slowing. But here at home, we are told our economy is great when it is very fragile, with marginal growth, and foreign reserves that could vanish in a flash. Clearly we hope to merely rally on.

For in our polarised politics there is great heat but little light. The many thousands, in rallying red and yellow last week, heard little of worth and didn’t care. Since 2010, the world economy has been undergoing significant change.

We have had the United States become self-sufficient in energy and soon an exporter; the slowdown of the emerging economies Brazil, Russia, India and China; the European economy, still anaemic, motored mainly by Germany and producing increasing xenophobia and neo-fascism; and our second largest market, Caricom, weakened by overall negative growth.

But we have heard no acknowledgement from the Government of the challenges, just platitudinous regurgitations of macro statistics that hide reality. And nothing either from the Opposition which conducted a long campaign for party leadership but produced nothing from the contestants about the precariousness of our economy, abundantly evident beyond the facade created by government spending and underground activity, both fuelling consumption levels that create the illusion of economic buoyancy.

Take note of the following. In Thailand, the two main parties, also with red and yellow shirts, failed to come together to avert a crisis, so last week the military suspended the constitution and individual freedoms. But Narendra Modi, India’s new Prime Minister, invited his Pakistani counterpart to his swearing-in, and Nawaz Sharif not only accepted but agreed to bi-lateral talks.

Two nuclear powers, nations with a tragic, blood-soaked history and an intractable conflict in Kashmir, have started to talk in the interest of their peoples. But in T&T, facing crisis, our 50-year-old political farce will continue as we rally separately in our own little worlds.