Private Venture Necessary for Diversification Since the dawning of this new year, there has been heightened interest by the population on the state of the local and global economy, especially where it relates to the decline in price of oil and natural gas. This of course comes as no surprise as our local economy and its sustainability hinges on the revenue acquired from our energy industry. And as usual, whenever we are threatened with the notion of any economic crisis, a first reaction for most is to identify the level of diversification in our local industries, or lack thereof, and point to that as almost an end-all-be-all-solution to all current and future financial problems. But while the government is largely responsible for producing and developing the raw conditions necessary to entice investors and entrepreneurs, private entities have not been forthcoming with proposals and ventures that can kick-start these alternative industries. Truth be told, private business owners have become too comfortable within the current economic environment and have not been challenged enough to drive them to broaden their portfolios. This of course is due to an extension of the government dependency syndrome that has plagued our nation since Independence. While we usually associate this problem with the lower class and impoverished households, the fact is that many private companies and entities are guilty of the same, as they depend heavily on the government for either direct or indirect revenue. As such, they have no reason to innovate or inaugurate themselves into any fledgling markets or industries. When one examines the major determinants necessary for diversification, they will find that this government has removed a great number of structural barriers that had previously dissuaded investors and businessmen from expanding their portfolios. Today however, there are opportunities for investment in the tourism, knowledge, pharmaceutical, culture, manufacturing and agricultural industries that are just waiting for entrepreneurs to take advantage of them. However, due to the risk factors involved coupled with the previously mentioned luxury that our businessmen enjoy from oil and gas revenue, there is no compelling necessity for anyone to take this leap. I will however concede that under the current revenue allocation model, only a relatively small part of the local population is allowed to become involved in economic activities. This is so both because oil and gas extraction is capital intensive, therefore there was no need for revenue allocation to focus on creating a productive base, which led to the systemic underdevelopment of the productive sectors. However, this is why private sector development is seen as a pivotal approach in creating new enterprise, increasing job opportunities and involving a larger section of the population in revenue production. And in speaking of increased revenue streams, it would be remiss of me to also point out that increased private sector involvement as a part of diversification can positively affect foreign direct investment. It is well known that foreign direct investment now only brings in new capital streams but also, increases the investment in new technology and new management culture, all of which is necessary if there is real effort to build and expand the diversification of our nation. To make a long story short, diversification is not, and should never be, solely dependent on government involvement and augmentation. Our entrepreneurs, businessmen and venture capitalists should all actively pursuing and developing the future industries of our country if are truly to become a self-sustaining nation after we have run out of natural energy resources. As our motto boldly states United we stand, Divided we fall this should serve as a beckoning call to private enterprise to stand firm with our government as we move forward to build a first world nation. Best regards, Ravi Maharaj
Posted on: Fri, 09 Jan 2015 15:59:58 +0000
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