T&T;s TERMS of TRADE DILEMNA The problem COMMODITY BASED ECONOMIES now face, arising from the decline in ENERGY PRICES,is based primarily on a GLOBAL SHIFT in SUPPLY versus DEMAND, commonly referred to as a SHIFT in global TERMS of TRADE ( a very basic economic concept) . - This provides T&T LONG term ( i.e 3/5 years) with as much OPPORTUNITY as it does SHORT term negative fallout, IF handled SENSIBLY? - It will require a period of SOCIO -ECONOMIC ADJUSTMENT over the next few YEARS on issues such as understanding WEALTH CREATION and from whence it comes, INNOVATION of which we historically have little, RESEARCH and DEVELOPMENT not much more, increased PRODUCTIVITY currently lousy, and a commitment to increased COMPETITIVENESS and UTILIZATION of currently underutilized plant and equipment - most of the above will rely on the PRIVATE SECTOR to do what it SHOULD have been doing for years (facilitated where appropriate by GOVT) - there is no immediate MAGIC WAND to be waved from this PM or any other, you cant SAVE your way out of this problem, or even over-react in terms of spending cuts. It is nowhere near as SIMPLE as that TRIVIALIZATION of the problem facing us would imply. -This is to a large extent a self made societal/business problem,created over many DECADES, arising from a fundamental misconception of how an ECONOMY needs to be structured, and individuals roles within it. Massive,thorough and sensibly considered REFORM is called for.
Posted on: Mon, 05 Jan 2015 22:03:40 +0000