Economist: State asset sale to businesses, a good thing

ECONOMIST Indera Sagewan-Alli as well as the TT Manufacturer’s Association (TTMA) and the Energy Chamber have all expressed support for the call by TT Chamber of Commerce president Reyaz Ahamad for Government to sell state assets to the private sector.

Ahamad made the call on Tuesday at the Chamber’s annual post-budget breakfast meeting saying “it’s not government business to do business” and the time had come for government to proceed with divestitures whether in the form of liquidating more shares in companies such as First Citizens, or selling assets that would be better run by the private sector.

Sagewan-Alli, speaking in a telephone interview, said that in principle she supported the call. “In strictly commercial activities the state should not be involved. It should be divested to the private sector. Even where there are monopoly situations and by putting it into private sector hands it would become more efficient then it should be done as well.”

She said when the state has a monopoly and is not declaring profits then there is something wrong and there are state-run companies which are a drain on the economy.

“Wherever competition brings greater efficiency, a reduction in price and a better offering to consumers it should be a guiding principle for divesting these assets.”

TTMA president Franka Costelloe said she is definitely in support of Government opening up the option of shareholding to the private sector and cited First Citizens as a great example. “That would solve a lot of problems.” She said that business would come in with the divested resources and the Government would gain much needed revenue.

“It is the best example of a public private arrangement. I certainly support the Chamber’s comments on that.” On the Finance Minister’s budget announcement offering of state lands for industrial development Costelloe said when the bidding process happens it should go into the productive hands of manufacturers intent on export.

“We need a quick turn around time for when the land is sold and not sitting stagnant.” She applauded the initiative but said there needs to be more transparency. She added exorbitant lands should not be offered and then remain barren while people await the land to acquire value.

Energy Chamber CEO Dr Thackwray Driver in a brief comment said the chamber would support the call for divestment where possible.

Minister in the Finance Ministry Allyson West in response said it was difficult to comment in the absence of knowing what assets are being specifically referred to. She pointed out that Government created the NIF fund which used assets from Clico and the Finance Minister said there would be a second version of NIF which would give access to the returns on that asset.

On the principle of divestitures West said the State tends to get involved in areas where the private sector is not getting involved or not sufficiently involved.

“I do not know how can we divest assets unless it is ensured the private sector would provide service required and at the cost required.” She pointed out, for example, that the ferry service cannot be privatised because of the costs associated.