Diversification — a prior plan

The 2005 Budget presentation contained a host of initiatives associated with the energy sector as follows: construction of aluminium smelter, expansion of the iron and steel industry, construction of a fourth LNG train, gasoline optimisation plants and a gas-to-liquids plant, expansion of fabricating yard and dock facilities, and development of Union Estate in La Brea for downstream petrochemical plants and other energy-based industries.

Twelve years later it appears the present PNM administration is still primarily focused on boosting the fortunes of the energy sector. Not that this sector is unimportant or should not attract serious attention but will it be at the cost of focus on non-energy sectors.

Economic correctness no doubt dictated that mention should be made of a broader, more holistic diversification perspective. Accordingly, of the three main pillars of the administration’s economic strategy, it was stated that “the second pillar is to diversify the economy to reduce dependence on the energy sector and to achieve self-sustaining growth.” In pursuit of this diversification strategy, focus was to be placed on six main sectors as follows: (1) the traditional manufacturing sector, (2) a new technologically-based industrial sector, (3) tourism, (4) financial services, (5) agriculture, and (6) the small-business sector.

Later on in the presentation we are told that other areas of economic focus would be on “information technology/ industrial sector” and “Wallerfield Industrial Park” in addition to “telecommunications.” The plans for Wallerfield were comprehensive and many-faceted, if a little incredulous to the objective viewer. Let me quote an extract: “The park will have engineering technology including optical and microsystems technology; material technology and software development; light manufacturing including plastics, electronic devices and petrochemical manufacturing and services including industrial maintenance, logistics and distribution, and training and human resource development.” UTT was earmarked to provide synergies for the industries on the estate. Additionally, we are informed that specific areas are targeted for further commercial expansion (in the diversification thrust).

They are (a) yachting, (b) fish and fish processing, (c) merchant marine, (d) music and entertainment, (e) the film industry, (f) printing and packaging, and (g) food and beverage.

As we review the above-noted focal areas for development outside of the energy sector, the obvious question is what has been achieved in the 12 years since those plans were announced.

The traditional manufacturing sector may have held its own aided by a protected Caricom market but has hardly penetrated other markets to boost foreign exchange earnings.

The new technologically-based industrial sector is stillborn while tourism has declined significantly and financial services have shown no diversified growth. Agriculture remains in the doldrums at 0.5 per cent of the GDP with generally reduced production levels and little agro-processing.

The small business sector is shrinking for want of attention and assistance. We may be charitable and say the Wallerfield Industrial Park is a work in progress yet less than optimistic of its development into a viable sector. As regards yachting we have witnessed a decline of arrivals and length of stay.

To have a successful fish and fish processing industry, there is need, in the first place, to have the availability of fish in our waters. The reality is that fish stocks are on the wane and have been so for a number of years.

Merchant marine may have potential which has hardly been exploited and items like a sustainable film or music and e n t e r - tainment i n d u s - try may seem like wi s h f u l thinking.

* To be continued