The State as Entrepreneur

• Author: Wendell Mottley
• Profession: New York-based Investment Banker having previously served as executive director of the company which eventually became the pivot of Trinidad and Tobago s natural gas-led industrialization and as Minister of Finance, credited with playing a decisive role in setting Trinidad and Tobago on a sustained path of growth from 1994 onwards
• Pages: 15-36

15

THE STATE AS ENTREPRENEUR

During the boom, the government of Trinidad and Tobago

implemented a large broad-based programme of industrialization,

employing a significant proportion of its petroleum windfall. From

1973–83, the state spent TT$7,317,603,5 45 (US$3.753 billion at then

prevailing exchange rates) in acquiring corporate assets.1 The

government was committed to a state-led approach, rather than a

private-sector-led approach to industrialization. In the first place,

the government had the money since, through taxation, it was the

main local beneficiary of the boom. In addition, the government

suspected the political loyalty of the domestic private sector whose

leaders were drawn largely from expatriates or European settlers,

though long established in Trinidad and Tobago. Furthermore, both

the politicians and the elite public service derided the competence

of the domestic private sector beyond trading, doubting its capacity

to engage in the massive industrial undertaking that was being

contemplated. The state therefore took on the prime role of

entrepreneur.

During this period, the government assembled a stable of state

enterprises numbering 62 at its peak. This number was unmatched

elsewhere in the Caribbean with the exception of Cuba, and had a

pervasive reach into large sectors of the economy. They comprised

holdings in airlines, shipping, cement, printing, food processing,

property development, hospital management, telecommunications,

hotels, finance, quarries and the energy industry. Significantly, by

1995, TT$3,419,221,100 (US$1.753 billion), or almost half of its

acquisition expenditure, was spent in the prized-energy-sector in

electric power, petroleum, metals, petrochemicals and related

infrastructure.

THE STATE AS

ENTREPRENEUR

Chapter Two

16

TRINIDAD AND TOBAGO INDUSTRIAL POLICY 1959–2008

Overtly political agendas and opportunism drove the non-

energy investments. One agenda involved the bailing out of troubled

private companies to save jobs, as was the case when the Tate &

Lyle sugar operations became uneconomical, and the government

negotiated the purchase of these assets to avoid lay-offs.

The Secondary Schools Maintenance, Training and Security

Company, and the National Hospital Management Company were

examples of state enterprises set up as end runs around woefully

incompetent public services. Regional investments in Arawak

Cement Limited, Leeward Island Air Transport Company (LIAT),

CARICOM Corn and Soybean Ltd. were instances of Trinidad and

Tobago dollar diplomacy in the Caribbean. The National Quarries

Company attempted to rectify supply bottlenecks in the construction

of heavy energy industry and related infrastructure. Many of these

opportunistic investments were economic disasters and became a

heavy burden on the state at the end of the oil boom.

By contrast, detailed planning accompanied by economic

evaluation informed the political agenda for many energy-sector

investments. Readers will recall earlier reference to government’s

three five-year development plans, of which the last, 1969–73, spoke

to the requirement for investment in the ‘commanding heights of

the economy’, a reference to the petroleum sector.

Within the IDC, a core of planners began thinking about how

the state might intervene in the petroleum industry.

Simultaneously, a group of enterprising businessmen in the

South Trinidad Chamber of Industry and Commerce (STCIC)

originated the idea of developing a deep-water port at Point Lisas

to serve a Greenfield export-oriented industrial estate on adjoining

sugar growing lands (see Figure 2.1).

The STCIC registered the Point Lisas Industrial Port

Development Corporation (PLIPDECO) and floated an Initial

Public Offering of shares to finance the promotional and

development objectives of the company. In the 1970s, this was an

extraordinarily far-sighted and bold initiative. As PLIP DECO’s first

executive director at that time, I joined with the company’s chairman,

Robert Montano, and directors in strategizing how PLIPDEC O

might attract world-scale export industry to its industrial estate.