The diversification challenge

This discussion in one form or another has engaged us for decades with no meaningful or focused strategy to bring about the desired reconstruction of the economy, let alone any feasible plan for implementation.

As the revenues from the energy sector flowed abundantly, we wallowed in a sense of ease and confidence in our good fortune while making glib statements about using the public savings so generated to develop and diversify the economy.

There was no compelling desire or sense of urgency to change. Thus today, with the oil windfall having been consumed, the economy remains undiversified and, to a large measure, underdeveloped.

Nor have we examined the lessons from countries in similar circumstances which have developed a resilient economy despite an absence of the windfall from resource commodities. Since initiatives should have been taken years ago in order to enjoy the benefits of diversification today, we have lost those opportunities forever.

In view of the volume of statements and pronouncements from all sectors of the society, one could be deluded into thinking that, at long last, plans and programmes will be devised and resolutely implemented.

We are informed that the Economic Development Advisory Board presented “a diversification roadmap document” to a group of current PNM ministers (Newsday 25/3/17). According to the newspaper report, the document identifies “seven industries to drive diversification.” Those listed are certainly not new and have been ritually announced by previous administrations without any visible success in the growth and development of these sectors. It is therefore a matter of great speculation whether the present PNM administration will succeed in this pursuit where all previous administrations have faltered and failed. It must be admitted that the undertaking to diversify the economy is certainly no walk in the park. In our circumstances and given the propensities of the majority, it would be a difficult, arduous and challenging exercise which may take years in order to achieve a reasonable degree of success.

In my view the primary objective of any diversification programme is to foster a new engagement with the outside world in which we competitively produce new or refurbished goods or services located in the non-oil sectors of the economy and market them to other countries in order to earn the foreign funds to pay for our imports.

In a dynamic and changing world there is the need to be resilient and adaptive. It has been said that, thus far, we have lived primarily off the unearned income (rents) derived from the energy sector. The task confronting us now is to support our livelihood from earned income through our own endeavours.

However, such an undertaking requires radical change at all levels and in all sectors of the society.

There is need for the reorientation of perspective and restructuring of the mindset. There is also the requirement to reform our general attitude to work and patient effort, to thrift and savings, to an embrace of the longer view, to patterns of consumption and investment, to enterprise and risk-taking and to relentlessly exploring ways and means of generating value through innovation and creativity.

There is the necessity for commitment, discipline and purposeful effort. A sense of national focus on identified goals for diversifying the economy should be instilled in the population.

Above all, there is the need for enl i g ht e n e d , pu rpo s e ful and forceful leadership in the political, economic and other spheres.