Prevent capital flight, create more permanent jobs

Economist Dr Dhanayshar Mahabir said even though government managed to stabilise the unemployment figure by a very small margin in the second quarter of 2003, it must now try to prevent capital flight as it tries to grapple with a worsening crime situation.

Capital flight, he explained, is a decrease in the micro and small business sector, noting that several business people are considering or have already migrated, taking with them the human and economic resources needed to ensure the development of TT. He pointed out that there were several employment challenges to deal with this year, such as the restructuring of Careen 1977 Limited and other layoffs as experienced with BWIA. He also noted that temporary employment was made available with programmes such as CEPEP and URP and wondered if the 10,000 workers laid off this year have been absorbed in other areas of temporary employment such as this. He suspects that the small decrease in unemployment would have been reflected in the temporary “make-work” programmes.

“Whereas unemployment resulted in some areas earlier in the year and last year, employment was created in other areas,” said Dr Mahabir. He called on government to work on providing more permanent jobs, rather than short-term/temporary ones and to open up the manufacturing sector, which would provide a stronger economy. Dr Mahabir felt that the manufacturing sector in TT is much too stagnated and should be expanded, rather than depend too much on the energy sector. Of much concern to the economist, however, is the number of micro, small and family-based businesses which are on the verge of migrating because of the crime situation. “Government must be careful about human capital flight. If crime continues to increase, the economy will not be able to diversify as quickly,” he said.

Dr Mahabir pointed out that if government was serious in being a chief player in the Free Trade of the Americas Agreement (FTAA), it will need the extra edge of a diversified economy. He also appealed to government to ensure that appropriate laws and standards of service are in place, in order to prevent foreign investors from pilfering our natural and economic resources, exploiting workers and contributing to severe environmental degradation, as seen with Atlantic LNG and the Point Fortin coastline.

Executive Director of the Employment Consultative Association (ECA), Linda Besson, said while the Association is happy that more people have been employed in the second quarter of 2003, she finds this a bit unrealistic since approximately 10,000 people were laid off earlier this year, the majority from Caroni 1975 Limited and BWIA alone. Besson agreed with Dr Mahabir, questioning if the increase in jobs was because the majority of the  unemployed were absorbed into other jobs or if more jobs had been created in other areas of employment.