Enill: Diversification is not the answer

UPDATE:

FORMER energy minister Conrad Enill says he does not share the view that diversification is the solution to the country’s economic problem.

He was speaking yesterday at the Institute of Chartered Accountants of TT 8th Annual International Finance and Accounting Conference: New Frontiers held at the Hyatt Regency, Port of Spain.

Enill, executive chairman of the Connill Consulting Group, said the country needs to manage revenue and expenditure, “because if you are not managing revenue and expenditure at this stage and borrowing $10 billion a year, then no matter how much income you get in other products that don’t have the same margins as energy, it will contribute, but it will not contribute at a rate to replace what you are looking at.”

Enill also said this country has inefficient government bureaucracy, crime and theft, and a poor work ethic, which has been pointed out by the Global Competitiveness Index. He said the public sector capacity to foster private sector growth, especially in the non-energy sector, in a competitive global economy, is inefficient. He added countries like Singapore have realised the relationship between the public and private sectors and have been able to move beyond everyone else.

Enill explained the new economy is driven by innovation, knowledge, entrepreneurship, quality-time-to-markets and costs, while the old was driven by land, capital, labour and based on lowering production costs.

“In many of our businesses, a lot of what we have done, a lot of what we are still engaged in dealing with, represents old-economy thinking rather than new-economy reality.”

He said research has shown that countries which adopt new-economy policies will experience growth.

“Blessed as we are in TT with sun, sea and fun, we have a choice to make. We can’t continue as we are with our traditional ways and a widely held belief that God is a Trinidadian, and continue to struggle as if it was divinely ordained by the new challenge status and regulators. Or we can take on the world by using our human resources in a very different way. We can in fact build a knowledge-driven economy.”

He said the ICT infrastructure has been built, but, more importantly, for TT to succeed there must be a new communication strategy so citizens are provided with information to make informed choices that support what the country wants to do.

Enill said the issue that worries him more than anything else is the age distribution of the population: between 2010-2020 and 2020-2030 the number of people 60 and over would be in excess of 70,000, and this will grow continuously over the next 40 years.

“How does a society manage with this kind of demographic?”

He said this meant implications for retirement funds, as well as questions about healthcare costs and security and all other things required to support a demographic of this nature.

“That is a discussion that we need to seriously start to look at, because that is going to create some challenges for us.”

He said because TT was not doing as badly as some Caribbean neighbours, “the discipline of what we should be doing, we ignore. And that has consequences for the quality of life in the country. This, I think, is something that we need to manage.”

Enill stressed this situation will create problems for competitiveness and for young people, “because what we are actually saying is that our current lifestyle has to be supported by future earnings – which may or may not be earned.”

ORIGINAL STORY:

FORMER energy minister Conrad Enill says he does not share the view that diversification is the solution to this country's economic problem.

He was speaking Thursday at the Institute of Chartered Accountants of TT 8th Annual International Finance and Accounting Conference: New Frontiers held at the Hyatt Regency, Port of Spain.

Enill, executive chairman Connill Consulting Group, said the country needs to manage review and expenditure.

"If you are not managing revenue and expenditure at this stage, and borrowing $10 billion a year, then no matter how much income you get in other products that don't have the same margins as energy – it will contribute but it will not contribute at a rate to replace what you are looking at."

Enill also said this country has inefficient government bureacracy, crime and theft, and a poor work ethic which has been pointed out by the Global Competitiveness Index.

He said the policy on revenue used to be spend less than earned and this went well for a couple of years. He added, however, the policy changed and the country was spending more than earned and in order to do that TT is borrowing.

"This to me is what should concern all of this."