No 'Dutch Disease' for Norway
By Raffique Shah
March 23, 2008
THERE'S never a dull moment in Trinidad and Tobago. The Government ensures that every week new, controversial issues erupt to spark debate, cussing, outrage. If not allegations of corruption, there's always the arrogance of ministers who believe they are anointed by God, not elected by people. If government pauses for a moment, the gangsters and murderers and bandits fill the vacuum with mayhem and massacre to let us know the masses are Good Friday 'bobolees'. And if both stay aloof, then rest assured politicians out of office would fill the breach with manure that could suffocate us all.
These three 'estates' compete for space on our butts to kick us to the ground. Meanwhile, the economy is running on auto-pilot, since with oil prices shooting through the ceiling, and downstream gas projects adding substantial sums to their (not our) coffers, nothing more needs to be done to enhance revenues. Our non-oil revenues are sinking faster than new oil and gas reserves are discovered, but that's of little concern to those who wield power. It is why Prime Minister Patrick Manning can wake up every morning with a new plan to spend more of our dollars on some project that boggles the mind.
With the Bombardier jet-deal scuttled by public outrage, I read where plans are now afoot to erect a new, multi-storied car park on Dock Road. As if the capital city's arteries are not already fatally clogged by traffic-cholesterol, the PM and his colleagues are adding high-on-the-hog fats that are sure to see Port of Spain turn into a town (well, it won't be a city then) we'll all pity. Pretty skyline, great boulevards, modern housing and shopping complexes, new airport and sea port-but a transient population. A place where people work but do not live. That does not make it the metropolis Manning envisions.
What is the vision for this country by 2020 and beyond? From where I sit, I see a doomsday scenario a la Stephen King. And that will happen not because we did not have the resources, the brain-power to plan for the future. It will be because we think only of ourselves, our insatiable appetite to consume more than we produce. Say Bombardier, people rant and rave. Say reduce fuels' subsidies so that people would be more discreet in their use of this valuable resource, and seemingly sensible people go berserk. Those same people who, as another columnist recently wrote, would rush to buy the latest model mobile phones for their families, without a worry as to the cost of talking all-day, all-night.
Where is the plan for reducing poverty in the midst of plenty? And don't tell me about Mrs. Manning's vow to remove all vagrants from the streets of the country. Those of us who have been around for some time will have heard "better cock that her crow". They all failed.
Interestingly, some friends of mine who think alike, hence exchange information that we believe is useful, that can be implemented here, sent me an article on "frugal Norway". After digesting it, I had to say to myself: little wonder we forever "cuss de White people" even as we wallow in our collective stupidity.
Norway ranks second in the world in per capita GDP (US$55,000). The most successful among energy producers and exporters in Europe, Norway's non-oil sector is growing faster than oil and gas-close to eight per cent a year. In Stavanger, the oil-boom town to the country's north, where herring and cod fishing and canneries still abound, the writer said you'd find one-third of that country's economy. And it has nothing to with oil or fish. One firm is busy building housing for wind turbines. Another produces medical devices it exports to 22 countries. "Everywhere else in the world a boom in oil has led to a decline, if not a complete devastation, of conventional businesses," the article said.
Not in this country, where, in spite of its frugality and seeming harshness, it is preparing its people for life after gas and oil. It is making provisions for future generations. "This is no accident: For Norwegians, this is a story of planning, self-discipline and a long learning process."
And this: "While other countries have become apathetic and uncompetitive during petroleum booms, Norway appears near the top of every international index of competitiveness and entrepreneurship." The Norwegian model, the direct opposite of the much talked-about "Dutch disease", is being studied by the Saudis, Kuwaitis, Brazilians. The "Dutch disease" occurred when, in the 1970s, oil and gas were discovered in the North Sea. Britain, Holland and Norway were the main beneficiaries.
The writer explains: "As oil exports boomed (in Holland), the flood of money into the domestic economy inflated the currency, provoked price increases and destroyed exports, leading to a decade of joblessness and rising inequality. The British industrial economy was virtually obliterated, leaving four million people jobless." Tickle you taste-buds? Sounds familiar? Next week I shall focus on how Norway is positioning itself to face the future with confidence.
PT II
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