TT Express News 2010 - Squandermania

Mary King has always been a favourite read of minem she does address educational issues, especially entrepreneurship and innovation, two aspects of education that are seldom dealt with by traditional educators (Sam Lochan being one exception).
Squandermania - Mary King
Monday, January 4th 2010

Part I
During the property tax debate the Opposition charged that the Government squandered almost TT$300 billion over the last eight years or so. In reply the Minister of Finance and other PNM MPs waved a newspaper article which purported to demonstrate that this was not the case. One MP even suggested that this article should be required reading for the Opposition and possibly all of us.

The article argued that if we agreed that the buildings constructed by the PNM would appreciate in value then the PNM government did not squander the money! Further, that in the Ryan poll 76 per cent of the respondents agreed that there was squander-mania and extravagance yet 65 per cent approved of the National Academy for the Performance Arts.

The article concludes that this evidence does not support squandermania and challenged readers to say how they would have allocated the funds.

As an Independent Senator I repeatedly cajoled both Governments to spend, especially in booms, in order to reconstruct our socio-economy. However, both the PNM’s and UNC’s spending, respectively, is and was not socially and economic efficient - i.e. the spending was in support of an unsustainable system.

Some of us still think that our private sector in this plantation economy that exploits a depleting resource, can, if facilitated or bribed by the government, diversify this economy. This view ignores the work of the New World Group, that of Lloyd Best, Kari Levitt, Beckford etc., which is also echoed by Sir Arthur Lewis.

Diversification requires the direct intervention by the Government in, as this column has discussed in detail, the creation of a National Innovation System, wherein the government takes a hands-on role to help create a new knowledge-based innovative and entrepreneurial class which would eventually pervade the country’s private sector.


The current private sector does very well in the boom times of our economy and, like our present government, sees the energy sector as everlasting, either that or business in T&T has a short time horizon.

In 2008 the Government spent TT$28.3 billion on subsidies and transfers, of which the petroleum subsidy was TT$2.1 billion. With PM Manning as the ’de facto’ Commonwealth champion of climate-change management and in a world not only attempting to constrain fossil fuel use but also considering imposing a carbon tax on users of petroleum products, our Government is subsidising the use of fossil energy.

Our manufacturers, who have found it impossible to break into the global market, have cheap, subsidised energy as their competitive advantage. When the RIC recommended rate increases for T&TEC our Government stalled these increases for years and then allowed only certain sectors to have increases, all the while subsidising T&TEC. The subsidisation of energy, the use of cheap natural resources to foster industrialisation, including the proposed aluminium smelter, is economically inefficient - squander-mania.


The Government spent as recurrent expenditure TT$1.66 billion on pensions and gratuities. Any enlightened business entity would recognise that pensions for its employees should be based on employee/employer contributions to an investment fund whose returns on investment pay pensions -- a yearly call on otherwise generated income should not be the source of pension payments.

Further, this fund guaranteed by Government can serve as investments into the diversification of the on-shore into a knowledge-based economy. This pension transfer is economically inefficient.

In 2008 the Government contributed some TT$1 billion to the education institutions. Following the UNC’s call that no child should be left behind, the present GATE programme funds anyone who is at least marginally qualified to attend an approved tertiary institution of her choice.

Our education system is about certification and is judged by the quantity of its output -- the aim is 60 per cent of the cohort. The quality of its graduates with respect to their demonstrated ability to move this nation towards a knowledge-based society is hopelessly inadequate.

The hope that UTT could project us into such a society has not materialised, though to date enormous sums of money have been spent on it. The tremendously expensive Tamana Technology Park is useless as a vector of this transformation since, like the energy sector but without the attraction of cheap gas, the plan is for foreign investment to diversify our on-shore economy. This transfer of funds to education is economic and socially inefficient.

Happy New Year to all (continued) maryking@tstt.net.tt