Economists: Crime hurting TT economy

Speaking on Wednesday at a panel discussion at the University of the West Indies, St Augustine campus, senior economist at UWI, Dr Roger Hosein said TT’s high murder rate (over 440 for the year) affects workers’ productivity and the outlook of entrepreneurs.

“Fear of crime is a factor that most affects my investment. You can’t invest as you want to nor display your wealth in this society,” Hosein lamented.

He cited someone who grows patchoi using hydroponics but who has opted to sell his produce only to a few wholesalers, at a lower profit margin, that he could earn if he instead sold to many retailers who would pay more but who might also pose a risk of exposing his business dealings to bandits. “Fear of crime has a serious impact on entrepreneurship,” Hosein surmised. Economist Prof Patrick Watson endorsed Hosein’s sentiment.

“If a young entrepreneur comes up with an idea to earn foreign exchange, he’ll not stay here in this country.

It’s not a nice environment to live in or work in,” Prof Watson said.

Adding that entrepreneurs need an enabling environment, Watson said crime will hit investments. Dubbing the TT Police Service as “a failing institution”, Watson said the service is riddled with corruption amid public perception that some officers are actively in cahoots with criminals.

Panellists gave an array of advice on the way forward. Hosein urged devaluation (whether to eight, nine or ten TT dollars to one US dollar) to dampen demand for imports. He said Guyana’s discovery of reserves of up to 1.4 billion barrels of oil gives a lot of lucrative opportunities for TT players and the local economy.

Hosein saw CEPEP as a terrible policy error and said GATE in its present form has starved the country’s real economy, even as he forecast that cuts will further the decline in tertiary attendance that began naturally before the cuts.

Energy Chamber CEO Dr Dax Driver, lamented the present state of the economy as being adults now borrowing from their children, for today’s consumption.

He said the country needs to adjust to a new reality of a much lower revenue coming in. Driver said few people realise the country’s high revenues in 2006 to were due to the rare fortune of a happy constellation of circumstances.

He said abundant and easily-accessible oil had meant energy companies had not needed to seek taxbreaks from the Government to undertake risky explorations, so these firms had paid hefty taxes/royalties to the Government.

Also, at that time the world oilprice was high, facilitating these firms to sell oil for healthy revenues.

Driver warned that the situation today is the exact opposite of yesteryear, as now energy firms face high costs of production, even as the world oil-price is relatively low.

Driver advised the export of energy- sector services and other services, that TT firms should seek more foreign market-access, and that institutions that impede business activity should be addressed.

These latter include the Customs and Excise Division, law courts, land administration and the work permit system.