Don’t repeat 1980s

CENTRAL Bank Governor Ewart Williams is warning Government that high energy prices won’t last and it must use the opportunity to bring wealth to the people. Addressing the opening of the 2005 TT Petroleum Conference at the Hilton Trinidad, Williams said every one remembers the economic pains of the 1980s which were caused by the obscene squandermania of revenues during the oil boom. Williams said the  poignant lesson learnt from those years was that energy prices could not be expected to remain high for an indefinite period of time and proper developmental plans must be put in place when the years of plenty come to an end.

He would like to see “balanced growth and an increase in social welfare.” Williams said Government has now outlined a credible plan for socio-economic diversification which could prevent history from repeating itself in TT but the  main challenge is ensuring that all aspects of this plan are successfully implemented while global energy prices remain high. “The current period of high energy prices is providing us with much needed space to accelerate the reform process and to make the necessary structural changes,” he said. It’s a question of seizing the moment,” he declared.  

Williams said given the nation’s ample energy resources and decisions made in the early 1990s to promote downstream development in the energy sector, there was no reason why TT could not “maximise use of the economic base to develop the domestic sector in the interest of sustained economic and social development.” He predicted that once Government is able to properly implement its diversification strategies, TT could experience real Gross Domestic Product growth of six to seven percent and a decrease in unemployment to from eight to seven percent during the period 2005 to 2007.

While the overall socio-economic outlook for TT looks bright, Williams warned that there were a few dark clouds on the horizon. He said the growth in the non-energy sector has not matched growth in the energy sector and it was worrying that in the former, growth has only been registered in construction and community, social and personal services. The Governor said while 40,000 jobs have been created over the last four years, many have been in the social sector and their sustainability is questionable. Williams added that TT’s external competitiveness in the non-energy sector is declining and this must be a source of concern “at a time when the FTAA is around the corner.”