In T&T we have had a long history of flagrant corruption in and out of government. In 2013, police statistics revealed a murder detection rate of under ten per cent. The conviction rate may have been even lower. We have seen frequent periods of increased crime levels accompanied by social unrest. In the current recession we must now include economic uncertainty along with increasing unemployment as private businesses reduce labor. Misappropriation of funds and a failure to develop other sustainable sources of revenue that are independent of oil and gas are now taking its toll on an economy with an average of minus four per cent Real GDP growth rate over the past five years. The closure of the ArcelorMittal iron and steel plant caused output from the assembly industries to decline by 68.8 per cent. Activity in the non-energy sector has long begun to deteriorate. Major energy players have scrapped projects, sold off their Trinidad assets and have also retrenched many workers.
The global financial crisis of 2008 taught us valuable lessons in corporate governance in the form of the CL Financial Group. The failure of this ‘too big to fail’ company represented a loss of some ten per cent of the GDP of T&T. Can subsequent insurance bills and other government regulation and disclosure requirements prevent this occurrence or lead to sustainable change in the prevalent economic system. Taking an outward view one discovers that many of these issues are also common to other global economies. Unfortunately, these are subsets of a much larger group of outcomes for which the solutions have proven to yield unsustainable results because they fail to address the root of the problem, which is systemic.
The failure of capitalism ushered in the Great Depression of the 1930’s in the United States. The growth that followed afterward was made possible by a primary set of policies, the most prolific of which was increased taxation of the rich and the corporations to levels as high as 94 per cent in the 1940’s. The revenue collected was used to build infrastructure and create employment. There were additional monetary, banking and other reforms to support further growth in the US economy. Today, in Europe, we are witnessing the substitution of those mechanisms for austerity measures which further cripples society during a recession. Are we to accept the constant boom and bust cycles which are characteristic of all forms of capitalist economies? We can engage in discussions of a postcapitalist era.
Recently the IMF issued its second downgrade on global economic growth within a six-month period. An Oxfam report earlier this year stated that 62 people own as much as half of the world.
Better decision-making to address those issues highlighted will benefit the economy of T&T. But ultimately like other economies of the world today, we are faced with a 200-year-old economic system (counted after the French Revolution) that has continually failed the greatest part of society; a system that has created and maintained an unparalleled rise in mass inequality of wealth and power. Regardless of the name or form it takes, its fundamental characteristic; the ownership and control of production in factories and offices by a very small group, has and continues to be a primary cause of many of the system’s problems.
Daniel Peters
Member BOETT, APETT