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WE JUST CAN'T GO ON THIS WAY By Ken Howell

posted 6 Jan 2016, 05:15 by Gerry Kangalee   [ updated 6 Jan 2016, 05:40 ]

Dr. Eric Williams
There can be no dispute that the decision to discontinue the use of planning as a tool with which to guide economic development was a mistake. The P.N.M. government, led by Dr. Eric Williams, adopted that course of action in the wake of the first oil boom, because of the failure of his third five year development plan in the middle to late 1960s.

That attitude betrayed the existence of a certain degree of mental laziness which infected the ability of the Williams regime and informed the behaviour of every government which came into office since then. The position was: well we have oil and gas and as long as the prices of these commodities remain healthy we don't need to worry about anything. I think it necessary to remind ourselves of that history and that the attitude which was cultivated clearly left us unprepared to confront difficult economic times.

 So when the international economic climate began to show signs of turbulence in the oil market in the 1980s, and public servants were offered a six percent increase in salaries they revolted against a government which they held dear to their hearts for many years before.

 Dr. Williams died, and George Chambers succeeded him as Prime Minister. Chambers was then faced with the task of taking some hard decisions because of the steep fall in the price of oil. The recommendations which were supposed to guide his action was the Euric Bobb report of 1980 and the William Demas Task Force report. Of the two the William Demas report was the more draconian because of the nature of the measures which it recommended.

 Chambers chose not to be guided by the prescriptions proposed by the Demas report. Instead, he chose to implement recommendations from the Euric


Euric Bobb
Bobb's report which suggested cuts in subsidies. Chambers won the elections in 1981 but failed to do so in 1986. He lost those elections to an amalgamation of parties which contested the elections as the National Alliance for Reconstruction (NAR). Clearly this was because, the sympathy which the party was able to harvest, following the loss of the founder of the party and the man who led us into independence had diminished.

But the entry of the NAR into government did not create the necessary atmosphere conducive to the development of the people's confidence because of the high handed manner in which Prime Minister Robinson chose to treat with the trade union movement and the working class as a whole. Without talking to the unions he went ahead and took away public servants’ cost of living allowance and cut their pay by ten percent.

An examination of the political and economic landscape since then will suggest that we have not learned anything from our past. From 1981 to 2015 all the governments which came into office failed to focus on the bigger picture which Mary King has been clamouring about, that of developing the on- shore economy. That is her way of talking about planning the economy in order to ensure that we are less vulnerable to the uncertainties of a one crop economy. But nobody is listening.

Now we are in a difficult situation which is not the result of our doing; but because of our short sightedness, we are now caught in the vortex of an oil and gas war caused by the international players, who have the ability to manipulate supply and demand in order to squeeze competitors out of the market.

The producers of shale oil are the target but other producers in and out of OPEC are also affected. What are our options in the medium to long term? That is what the Prime Minister in his pre-recorded address should have addressed in the main. I say this because the PNM is not a party which is new to government. Some of the members on the government side in this administration are new, but the party has a history on which it can draw.  In addition, we must ask the question: is there anything useful which can be salvaged from the plans which the last government, through its Minister of Planning, had announced?  

The excuse that it has only been in government for a few months and because of this it was unable to put forward a comprehensive development plan is unacceptable. That, apparently, is the narrative which is being peddled in some quarters. So that the measures which he proposed to adopt by way of cuts in government spending in Ministries and State Enterprises and the House of Assembly and the decision to draw down on the Stabilisation Fund in 2016 and 2017 to the tune of $1.5 billion US dollars, could generate some economic activity, but that is a short term solution.

That is why we must insist that whether this government continues in office or whether it is replaced by a new one of whatever complexion, conscious steps must be taken to put the country on an economic footing which is not susceptible to the vagaries of the international oil and gas markets. We cannot and must not continue this way.

What then do we make of this new PNM government? How do we analyse its strengths and weaknesses? On a scale of one to ten, I see more weaknesses than strengths. It seems to be void of new ideas. During the election campaign what was projected by Dr. Rowley were past plans from previous PNM administrations such as the Vision 20 20, which was to be renamed Vision 30 30. That approach seems to suggest that mental laziness is contagious and it is genetic because it seems to run in the PNM family.

That attitude seem to have been transmitted to the Government Information Services Department and Caribbean New Media Group (CNMG) in that it led to the situation, where the broad cast was delayed for one hour and  the quality of the transmission clearly suggested that it was not recently recorded. In addition, to an alert observer it left room for speculation about the health of the Prime Minister, having regard to the fact that one would have expected a less distant and more intimate delivery of that first address, notwithstanding the fact that he was the bearer of bad news at a time when the country was in a festive mood.                    

If the Prime Minister is having difficulty health wise, then the public must not be kept in the dark. Because the flimsy screen behind which the reasons for his recent travels have been hidden betray the existence of certain health concerns. It leaves us also to speculate, as to whether the rigours of the election campaign might have exposed the fact that health concerns which he should have focused attention on had escaped him and, as a result, he is now confronted with the reality of his deteriorating health condition. We need to know what the true situation is. Is he healthy or not? 

If the trade union movement is to involve itself in tripartite discussions it must be aware of all the facts. From where I sit all that I am seeing are the plans laid out since the Robinson administration, which had as its central objective the privatization of state enterprises. While the Prime Minister sought to give the assurance that there will be no cuts in the labour force in the public and state sectors, that is only a short term assurance since he


ArcelorMittal has thrown this family on the breadline
has no control over how the private sector both local and foreign will treat with the situation. We must not forget that ArcelorMittal has already provided the example and over the last year, hundreds of workers in the energy sector have been dumped on the breadline.

The reality is that we are at a place where what is required is less political banter between the champions of the established Syrian old money and the Hindu/Indian new money groups who are all intent on ensuring that their respective parties are in control of the Treasury. That is what both the PNM and the UNC represent.

On the one hand, the Syrian group which are the financiers of the PNM seems to have come to the point where they believe that they are capable, financially and technologically, to take over some state enterprises, while on the other hand the Hindu/Indian group, who are the financiers of the UNC, needed more time in government to hone their skills in the art of government; specifically with regard to the science of deception and corruption in which the PNM has proven to be very skilful. It is that struggle between these two groups which is largely being played out in the public domain as if it is simply about some infraction committed by the Governor of the Central Bank.

The real issue seems to be allegations of discrimination levelled against the Governor, relative to the alleged inequitable distribution of foreign exchange. That explains the decision of the Governor to name some of the companies, who have been in receipt of what he described, as the largest slice of the forex. Clearly, he was defending himself against an accusation of discrimination. Then we have this question of his alleged decision to relax the rules, as a result of which, the last government was able to max out its limit on its Overdraft with the Central Bank.

But even on that point, he cannot be held culpable since, in the view of some elements that are defending the government's decision to terminate his employment as Governor, he is not and cannot act independently of the Minister of Finance. Therefore, if we follow that line of thinking, then he acted on the instructions of the then Minister of Finance.

The Governor has since announced his decision to take legal action against the government over his dismissal, claiming that he was not afforded due process as he believes that he was entitled to such.  But this issue of the alleged infractions committed by the Governor is really a smoke screen behind which the government has chosen to hide because of its fear of the current bleak economic conditions, which a PNM government will have to face for the first time.                                                                               

Previous PNM governments escaped the consequences of the last economic crisis. That is why they intend to use the weapon of the blame game as a distraction, especially if the leaders of the trade unions, some of whom are themselves members of the PNM, are prepared to sing in the choir of the party in order to align the members with the call to make sacrifice when the business community is not prepared to do so as well.

While there is nothing inherently wrong with the tripartite process, what is required is that the trade union movement must prepare well before engaging in such forums. It must ensure that it is engaging in those discussions from a position of strength. A demonstration of strength requires the movement to engage its members in discussions at workplace and Branch and Section levels, at the General Councils and in Conferences of Branch Officers and Shop Stewards. At all these different levels decisions must be taken which should fortify the contributions of the leaders in those talks.

 It will also ensure that the leaders’ positions are informed by the decisions taken by the membership of the movement and that they represent a force not to be trifled with. Sadly though, some of the leaders of the movement also appear to be under the influence of the PNM “C “ team whose movement was allegedly demonstrated on the casting couch and as a result it may be difficult for them to be rescued from under that spell. 

That fact will obviously make the task of those who are inclined to agree that the movement needs to prepare for battle, more difficult. Because as we all know, it is difficult for persons who are hooked on the wine of their own self importance to break the habit. In the case of the country, let us hope that the working class will soon find a solution which can be applied to prevent the capitalists from deepening the exploitation of their labour through these fabricated schemes.

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