Reforming TT: an economic perspective

“There is no argument where Total Factor Productivity (TFP) is concerned. It is the growth hormone that leads to sustained economic advancement and is the significant difference between countries that grow regardless of natural resources and those that ‘boom and bust’ like TT does.” This is the words of management consultant Gerard Pemberton.

“The reason we do not hear about TFP is because economists cannot measure it precisely. Each individual, each businessman, each community, each company and every department knows when it is happening or not happening.

So who cares that it cannot be measured at the top? But it can be felt on the ground, down below in all the areas where real work is done,” he said.

Speaking about today’s technology Pemberton said that apart from using it through strategic thinking “the major culprit is poor infrastructure not only in public areas as in roads and utilities but also in factories and offices. Low standards and low expectations create attitudes that claim excellence out of mediocrity.

We worship mediocrity.” What needs to be done is to pick “the best countries in each activity and set that as our national benchmark,” he stated.

Regarding economic reform, the critical challenge is “transforming human behaviour.” Using Trump as an example, he said whether or not he was using tweets or sound bites he was changing human behaviour. “But if the US is strong and talented, innovation will crest a wave of massive self-managed change even in bureaucracies. The mission, the mantra is higher TFP,” said Pemberton.

He said this was what allowed Cuba to survive for decades without resources, without a plan.

Pemberton advised, “Make the best of what you have and make what you have the best.” He said this country did not need a Trump or Castro. What this country needs is “solidarity, togetherness behind a common set of agreed moral and spiritual values.” In the present scenario TT can dramatically improve its TFP by using the opportunity “to better develop money and capital markets through a modern transformation process.” He then gave an example in banking that too many bank customers complain about the inefficiency of transactions, even in simple ones like processing cheques. There is a need to be more efficient in meeting the needs of savers and investors.

“Years ago,” he said, “a former PM was so serious about financial sector reform the he had set up a White Paper Committee; a Green Paper Committee and a 2020 Vision Committee. Maybe we need a 2017 Committee of young, dynamic minds with a diktat to ensure financial sector reform.

“Improvement in this crucial sector,” Pemberton added “also requires the State to play a more active role through a special purpose, centralised Statecontrolled agency to organise the issue of Government debt securities with capital market development goals in mind.” For several decades now this word diversification has been bandied about by almost everyone, but still no one has come forward with any practical, sustainable plan. According to Pemberton, “We need the drivers that will encourage and sustain innovators.

“Imagine we can port mobile numbers but can’t port pensioners.

We can forecast storms but we can’t avoid regular flood damage.

We have superb human resource skills but we systematically put people, good and bad, in the wrong jobs,” he said.

“No single answer will ever achieve consensus. Those kinds of solutions need brave, inspired leadership. We need to be knowledgeable followers filled with faith and hope.

We must get leadership roles straight. We always need to hear the Opposition. We need the government to act.

“If we value the TT dollar on a trade-weighted basis, that would be a quick pick to promote TFP, the most important justification for that change. The International Monetary Fund (IMF) has the calculations in its last Article IV Report available on the IMF website. The country has to decide, but we have not heard a focussed discussion in Parliament,” he concluded.