BASED ON an assessment by Johns Hopkins University, Trinidad and Tobago is now ranked fifth among countries in the developing world, India included, with the highest rate of Covid-19 infections.
Both Government and people dropped the ball. We were warned by Chief Medical Officer (CMO) Dr Roshan Parasram in early March of “a considerable increase” in infections. But “people at the time thought it was too small”, says the CMO, who felt “it was enough to cause a significant snowball-type effect” where “the numbers would first double and then quadruple quickly”.
He was right. We have had 1,896 new cases and 27 deaths in seven days. Also, our vaccination programme has been shaky, getting off to a late start. Too many citizens are being undone by the pandemic.
Sadly, if we survive this, there is worse trouble brewing. The sense of a terminal condition hovers over Trinidad and Tobago today. Whilst cancerous social decay destroys the social fabric, our economy is also being undone.
Our LNG (liquefied natural gas) and petrochemical industries are now further threatened. Rystad Energy says US natural gas production will grow to a new record in 2022, at 93.3 billion cubic feet per day (bcfd) and will continue to rise further, exceeding 100 bcfd in 2024, making the US an even greater competitor in LNG and petrochemicals.
More ammonia and methanol plants will now migrate to the US to access its abundant, cheap natural gas, accentuating the threat that the Point Lisas Industrial Estate could become a massive junkyard of scrap iron as it also reels from the country’s lowest gas production in 16 years and the high gas price negotiated by PM Dr Keith Rowley with upstreamers.
And Rystad vice-president for Latin America Schreiner Parker says, “I don’t know how competitive Trinidad can be against US LNG. Of four LNG trains, you will have only two running at full capacity going forward.” Houston’s Energy Intelligence Group says “doubts linger about Trinidad and Tobago’s future” in LNG, and asks whether we are headed for the LNG exit. Will another massive scrap iron junkyard now emerge at Atlantic LNG Point Fortin?
That humongous US natural gas is driven by shale production, part of the global energy revolution, including renewables, that I repeatedly warned this Government about and which placed oil and gas revenues in terminal decline. But for five years, the Prime Minister and his Finance Minister, Colm Imbert, both intellectually ossified by oil, waited vacuously for the return of high prices, ducking the duty of diversification. Shame!
They did absolutely nothing but borrow and spend, not even recognising, as economist Mary King reminds us, that “technologies of the Internet, robotics, artificial intelligence and automation (IRAIA)” will inevitably influence any new economic direction, including diversification. The Diego Martin dinosaurs are the chief architects of our present economic undoing.
Now economist Dr Terrence Farrell himself describes the oil and gas industry as “terminal”, warning prices will never return to the highs of the 1980s. He too talks about “a global energy transition and a shift to renewables”, and reminds the Government that “countries are accepting there’s an end to fossil fuels”.
Today, after five years as Prime Minister, Rowley pathetically asks “where, with what and how to diversify our economy”. Scandalous! He has gestated no new foreign revenue streams, without which there will be absolutely no recovery. Can our economy revive under such abysmal leadership even if we survive the pandemic? This nation is being undone.
Our situation is compounded by our indebtedness. Total net public sector debt now stands at $122.19 billion, or 82.7 per cent of GDP (gross domestic product). This is bad enough. But even more alarming, as economist Mariano Browne points out, this country’s foreign debt stood at US$4.69 billion in September 2020, almost 26 per cent of the country’s net public sector debt, more than double the US$2.23 billion in September 2015.
Folks, we service our foreign debt with foreign exchange from our foreign reserves. And we are already borrowing to pay interest on existing debt. With foreign revenue reduced, outflows now exceed inflows and there is consequently no non-borrowed replenishment of shrinking reserves. How long will our reserves last to service our foreign debt and to also import the almost everything we eat, drink, wear and use in our homes, hospitals, schools, offices, roads and factories?
New Central Bank data shows foreign reserves at US$6.75 billion at the end of February 2021. But how much of that is borrowed and which must be paid back? Farrell estimates our non-borrowed reserves are already down to about US$5 billion today, a 50 per cent drop since 2015.
The Finance Minister recently confessed to having “serious difficulty finding money to keep the country running”. Alarming! This is after his Government spent an estimated US$6 billion of reserves and HSF (Heritage and Stabilisation Fund) drawdowns combined, and generated no new foreign revenue streams, the lifeblood of this economy.
This country is headed for bankruptcy. That feeling of “terminality” hangs in the air. We face the dire prospect, not long from now, of empty shelves in groceries, pharmacies and elsewhere. Under this Government, a nation is being undone.