Boom and what?

September 29, 2004

With the threat of civil war in Nigeria having been intensified since the rebel army gave the Nigerian Government a specific deadline-October 1-for the implementation of certain reforms, the price of oil on the international markets has shot up to US$50 a barrel.

Already since the war in Iraq and its aftermath which seems to be "more war than peace and tranquillity" (in fact more Americans have died in recent times than previously during the absurdity of that televised, supposed conquering of a comparatively poorly armed Iraqi people), the price of oil has tended to be high.

Both Iraq and Nigeria are huge exporters of oil to the countries of the West. Once these sources of supply remain uncertain, the price of oil will be high.

T&T has gained significantly in recent years with the price hovering just above US$40 when conservatively we had budgeted at just around US$25. The windfall has been huge.

But even more fortunately for this country, one of the foreign investor-companies, BHP Billiton, operating by far the largest drilling platform in the region, is about to begin pumping an estimated additional 200,000 barrels a day.

The revenues that will accrue to T&T from this BHP Billiton venture and from other companies like Talisman exploring in other blocks around T&T, given the present sustained high price of oil, will be mind-boggling, to say the least.

When we add to this the actual and/or projected revenues from natural gas, the fact that LNG Trains 1, 2 and 3 have been established at Point Fortin with the possibility of Trains, 4, 5 and 6 coming later, one realises that, for this small population of a mere 1.3 million people, the much anticipated boom is not coming, it is already here, and here big time.

The tongues are waging ferociously. What is to be done with the petro-dollars this time around? There are suggestions of a Heritage Fund, ie savings for the future generations, and of a need to increase the already existing Revenue Stabilisation Fund.

The Government has indicated that this fund will by the end of this fiscal year be increased to over $2 billion. We will wait and see.

However, we believe that the important question to be answered is: why was there so much misconception and mis-information about the utilisation of the petro-dollars in the first boom that we experienced between 1975 and 1983?

One then most uninformed Prime Minister of the region was noted to have suggested that the "petro-dollars flowed like salts through T&T..." That Prime Minister was certainly not the only person in the Caribbean ignorant of the facts.

I can recall then that Minister Eckstein, in response to the popular view that the petro-dollars were squandered, published a statement that actually itemised the breakdown of the expenditure to the very last cent, listing clearly what was spent on infrastructure and even what was extended as loans to other Caribbean island-States.

It even took a foreign professor, one Kari Levitt, to say during a lecture at the UWI, that she could not understand the view that the petro-dollars were squandered when in fact T&T had built up infrastructure second to none in the whole of the Latin American region.

Yet the view that the petro-dollars were squandered has persisted up to today and the present Government has to be mindful that, on this second occasion of a massive boom, there is a need for better communications and a need for greater transparency. People do not "see" unless they are "touched."

In a recent column titled "Bring on the small hits," it was put another way:

"How does one reconcile in one's mind the huge revenues and expenditures projected with:

The fact that children are still dying in hospitals due to lack of care and the unavailability of certain supplies and facilities.

The fact that traffic jams on the way to Port-of-Spain on mornings are unbearable and that no new roads have been built here since Williams, and that all that has been done in recent years is the paving and re-paving of old roadway.

The fact that there are still so many squatters and so many homeless.

The fact that the flooding continues unabated.

The fact that implementation and maintenance are still the country's biggest failings.

The fact that schools still stand in need of teachers and essential teaching tools and that secondary schools still need to be deshifted.

The fact that local government agencies are still unable to collect garbage efficiently, clear clogged drains, build needed bridges and so on.

"The point is that much of Government's expenditure covers salaries, emoluments and other administrative costs, while lesser percentages are actually utilise to facilitate the needed expansion of amenities.

"The mega projects listed under capital works are necessary but so too are the 'small hits' that:

Touch people in a very real way.

Serve to remove their despair.

Fill their stomachs.

Make them more inclined to be passionate yet patient while awaiting the effects of mega-projects to kick in.

Brighten up their lives and the lives of their children;

More than all else, rekindle their hopes in the future..."

A word to the wise: if nothing is done to change people's lives in very meaningful ways, then come 2007, this Government will find itself seriously challenged; matters not how much oil and gas has flowed.