Last week, I posed two questions a political party must answer before it can get my vote in the next general election. “Firstly, how will you revolutionise governance to achieve a separation of powers between the executive and the legislature, critical to making Parliament a fierce watchdog over the Cabinet, Government and State enterprises? And secondly, how would you restructure the nation’s economy, still overwhelmingly State-dominated, stymieing the deeper private sector development needed for diversification?” I explored the first question in my last column, and today I examine the second.
Since Independence, the State has dominated the nation’s economy. With massive bureaucracy and over 50 State enterprises, it is the major employer and principal driver of economic activity; it is the leviathan in our small pond that has pushed the private sector to the periphery to deal with retail, distribution, services, construction and light manufacturing. Local entrepreneurship has not been allowed to go to the next level, to develop the capacity and creativity for the kind of investments and innovation for developing products and services to penetrate global markets, without which there will be no economic diversification.
After 50 years of talk, we have not diversified the economy because we never diagnosed the problem properly. We complained the Government was not doing enough when all it should do is provide the environment for diversification. We criticised the private sector for lacking the culture of adventure and creative endeavour but did not give them the room for changing the buy-and-sell mentality. So we produced Ram Kirpalani, Anthony Sabga and others of their ilk, all commendable, but have not yet produced a Henry Ford or Bill Gates, and will not, unless we create the environment, change the culture, make room for real entrepreneurship, all of which means the Government getting out of the way.
Why is the State still running buses and an airline; distributing water, gasoline and electricity; broadcasting daily news; managing quarries, ports, solid waste, vehicle maintenance, helicopter services, an ageing oil refinery and a flour mill, among the huge list of absurdities? Why didn’t we, in a competitive environment, get the local private sector involved, habituating them to huge capital outlays and concomitant risks, demanding sophisticated management and sharper business acumen, thus changing the culture? By now, they would have developed the capacity for globalisation, securing our viability in a fiercely competitive world.
It is not State enterprises that give America, Japan, Germany and other industrialised countries dominance in global markets. It is their private sectors which they incubated and then gave room for fullest expansion. It is the unleashing of the private sector in Brazil, started under President Cardoso and furthered by Lula da Silva, former trade union leader, that finally awakened the sleeping giant of Latin America. Would India have lifted hundreds of millions from poverty had it not abandoned its obsession with suffocating socialism and deliberately engineered private sector growth?
Today, Africa is among the world’s most economically vibrant regions with bright prospects because private sector investment is allowed to flourish. And phenomenal China, the world’s second largest economy, with its unique brand of command capitalism, has now decided on greater room for market forces and less direct state presence in the economy. T&T had a good start but the state has long overstayed its position at the economic helm, like an ageing, insecure parent dominating the home or business, stunting the offspring, leaving them no room to soar.
We have therefore not diversified, and our economy will die as energy revenues irretrievably decline. Compounding our backwardness, most State enterprises have been woefully inefficient, hindering economic growth through delays, breakdowns, work stoppages, waste and general mismanagement. They generate gigantic losses and have bled the treasury for the past 50 years. Many don’t pay taxes and utility bills. Worse, along with an overmanned, antiquated Public Service, they account for the huge transfers and subsidies that define our inefficient use of financial resources, eating up money needed for education, health, security and infrastructure. State enterprises have also been the real dens of corruption, the feeding trough for predators, with billions annually allocated but no inescapable obligation for accountability. It takes the media to ferret out enormous malfeasance, confirming the total uselessness of Parliament as watchdog of the people’s interest.
We shouldn’t again wait to be forced by the IMF into further privatisation. We should be convinced by past successes. In the 80s we dumped “poopsing”’ Telco formed TSTT with Cable and Wireless, and telecommunications was never the same again. We sold the Iron and Steel Company, saving billions in subventions, and earned significant taxation revenue from the new owners, ISPAT, who improved the availability of steel, generating thousands of jobs in construction. In the 90s we did significant divestment in petrochemicals, bringing in billions in foreign investment, making us the leading producer of methanol and ammonia in the world. And we should never forget our maxi-taxi service, an outstanding example of partial privatisation of public transportation that daily moves hundreds of thousands of commuters with great efficiency.
Our nation is in danger. We are now near the precipice, with budget deficits, growing debt and revenue decreasing from declining production and a global glut in gas and oil. We must urgently restructure our economy. The State must stop sapping the nation’s strength. Wake up, citizens. If politicians cannot say how they will re-engineer our economy, they can lead you nowhere. Care not whether they are brown, black, yellow or white. They don’t deserve your support. Let the cry from this country be, “no vote, unless...”
• Ralph Maraj is a playwright, former government minister