DISCUSSION PAPER DRD131 OIL WI!:-luFALLS I~ A SEALL PARLL.l..J.fDTTA...>tY D210CRACY: THEIR ~ACT ON TRINIDAD .~~D TOBAGO by Richard Auty [niversity of Lancaster Alan Gelb World Bank Septe!Ilber 1985 ,'. De7e:opment Research Department ~conomics and Resea=ch Staff World Bank ~. The world Banl<:. does not accept responsibility for the views expressed herei:1 which are these of the author(s) ana should not be attributed to the World 3ank or to its affiliatad organizations. The findings, interpretatiQns, and conclusions are the results of research supported by the Bank; they do not ,- necessarily represent official policy of the Bank. The designaticns:employed, the presentati.on of material, and any ::laps useJ in this document are....solely for the convenience of the reader and d,J not i:nply the expression of-any opinio?1 whatsoever!on the flart of the ~,orld Bank or its affiliates c~cer.ling t~e legal status of any country, cerritory, city, area, or of its authorities, or concerning the deli~i:ations of its ~ourrdaries, O~ national affiliation. OIL WI~FALLS IN A SK-\LL PARLI.\.'1E~TARY DEHOCRACY: THEIR UlPACT ON TRINIDAD AND TOBACO Richard Auty Alan.. Gelb Dept. of Geography, Development Reseli,r.:di·'·O~pt'~; University of Lancaster. World dank. September 1985 * * The~old Bank does not accept responsibility for the views expressed he~ein which are those of the authors and should not be attributed to the World Bank or to its affiliated organizations. The findings, interpretations, and conclusions are the result of research supported by the Bank; they do not necessarily represent of:icial policy of the Bank. The·designations employed, the ?resent~tion of r.laterial, and any oap:; used in this docuoent are solely for the convenience of the reader and do not · imply the expression of any opinion whatsoever on the part of the World Sank or its affiliates concerning tile ~~al Status of any countr;, territory, city, area, or of its authori~ies, or conce_'ning tiLe delioitation of its boundaries, or national 2ffiliation In cornon with other o i l e q o r t e r s Trinidad and Tobago reaped l a r g e w i a d f a l l gains a f t e r 1973. Cheir use w a s heavily influenced by its d i s t i n c t i v e p o l i t i c a l economy, and r e s u l t e d i n s u b s t a n t i a l weakening of its nonoil t r a a e d sectors ( t h e "Dutch disease"). Attenpts t o d i v e r s i f y through gas-based i n d u s t r i a l i s a t i o n a r e not l i k e l y t o replace shrinking o i l income. This paper t r a c e s the r e l a t i o n s h i p from p o l i t i c a l objectives t o use of o i l windfalls and t h e e f f e c t s on the nonoil economy. I. INTRODUCTION I n common w i t h o t h e r o i l exporting c o u n t r i e s Trinidad and Tobago reaped unprecedented w i n d f a l l gains i n 1973-7L and a g a i n i n 1979-80. T h i s paper a n a l y s e s t h e use made of its wi;idfalls, and che consequences f o r i t s n ~ n o i leconony. How d i d t h e o b j e c t i v e s of its governnent i n f l u e n c e t h e a l l o c a c i o n of o i l income? Has Trtnidad been a b l e t o avoid t h e "Dutch Disease" (Corden and Neary, 1982) of increased o i l dependence and s h r i n k i n g nonoil t r a d e a b l e s ? What has been t h e l o n g - t e n value of its vindf a l l gains? R e l a t i v e t o o t h e r oil-exporting developing c o u n t r i e s used a s comparators i n Gelb ( 1984)--.Ugeria, Ecuador, Indonesia, I r a n , Nigeria, and Venezuela-Trinidad and Tobago has some d i s t i n c t i v e f e a t u r e s . It is s n a l l , w i t h a slow-growing population of only 1.1 ail:iua. i l t h o u g h its 1974 GXP/head was s l i g h t l y exceeded by Venezuela, its 1982 GNP/head, a t US$68h0, placed i r a t t h e top of t h e n i d d l e income developing country range. P u b l i c a d m i n i s t r a t i o n is s e n e r a l l y e f f e c t i v e . The p o l i t i c a l s y s t s n was democratic, and u n l i k e Venezuela ( t h e only couparatur a l s o Lo have an e l e c t e d government throughout t h e period) it was modelled on the Westminster parliamencary system and thus vas l e s s prone t o experience d i v e r d l n g o b j e c c i v e s between rxecucive and l e g i s l a t u r e . F i n a l l y , p r i o r t o t h e f i r s t u i n d f a l l the country had undergone a ? e r i o d of austeritlg, due t o t h e g r a d u a l d e c l i n e i n o i l ouc2ut from e s t a b l i s h e d f i e l d s . The new o f f s h o r e f i n d s developed a t the s c a r t of t h e 1970's v e r e a l s o l i m i t e d . This r a i s e d public awareness of t h e negd co proceed r - -- with c a u t i o n i n the use of income from the country's f i n i t e o i l r$sources. . Except f o r t h g q u e s t i o n of s i z e , i n r e l a t l o n co conparacor countrhes, these D f e a t u r e s favoured the a b i l i t : ~t o nake good use of :he w i n d f a l l s . Trinidad and Tobago c h e r e f o r z began wich a number of advantages. S e c t i o n 11 o u t l i n e s t h e " i n i t i a l conditions" of the p c l - i t i c a l system and the economy before the f i r s e o i l shock. These were t o be of g r e a t importance i n s e t t i n g p u b l i c p r i o r i t i e s and so d e t e m i n i c g t h e a l l o c a t i o n of w i n d f a l l s a f t e r 1973. The main p r i o r i t i e s before the f i r s t boon were: ( i ) -- i n d u s t r i a l i z a t i o n and growth; ( i i ) extending n a t i o n a l c o n t r o l over production and ( i i i ) a s s i s t i n g poorer s e c t i o n s of s o c i e t y . O i l income and gas d i s c o v e r i e s were t o add; ( i v ) d i v e r s i f i c a t i o n i n t o gas-based i ~ d u s t r y . S e c t i o n I11 d e s c r i b e s t h e response t o the f i r s t o i l boom, 1974-78. Although i t was c a u t i o u s , p o l i c i ~ : i n i t i a t e d during t h i s period, notably (i) the t r e n d towards s t a t e ownership, ( i i ) incrsasiag sr3.r,~$diest o conskmars and t o f a i l i n g f i n s and ( i i i ) pronoting gas-L-aed i n d u s t r i a l development vere t o c a r r y through i n t o the period of the second o i l boom when t h n i r i n p a c t became major. The period of the second boom, 1979-81, is analysed i n Section IV. T r i n i d a d ' s gas-based i n d u s t r i a l i s a t i o n s t r a t e g y is evaluated. i n S e c t i o n V, because of its c r u c i a l importance i n preparing f o r t h e post-oil era. Conclusions follow i n S e c t i o n V I . 11. TBINIDrU) .L':D TOBAGO BEFORE 31E FIXST SOOY Za. P o l i t i c a l S t r u c t u r e 4 Trinidad and Tobago eclerged i n t o a parliamentary democracy a i t e r -- * World War LI. Its tvo-parcy structure reflected an underlying ec~lnic ' i - cleavage. I n L970 3lacks c o n s t i t u t e d b3 percent of rhe population, and E a s ~ "? Indians 60 percent. rOurteen percent were mixed. The i s l a n d ' s a o r e upwarB: n o b i l e alack ? o p u l a t i o n was s t r o n g l y represented i n sovernoent s n a predoninai i n industr:~. ,he Zast Indian population, descer.dancr; of Lndent.~redl a b o r e r s was poorer and l a r g e l y r u r a l : Black e t . -&.. , 1976. The Peaple's :.ia:ional Yovement (PNM) uhich has remained i n power s i n c e 1956 vas l e d by D r . E r i c Villiarns u n t i l 1931; t h e r e a f t e r i t was l e d by Dr. George Chambers. Its c o n s t i t n e n t s have been mainly black. The Democratic Labour P a r t y (gPL), t h e l e a d i n g o p p o s i t i o n , drew most of its support from t h e poorer and more r a d i c a l -1/ I n d i a n s Inf luenced by t h e views of Lewis, 1950, i n 1956 t h e P?IM set its f i r s t g o a l a s i n d u s t r i a l i s a t i o n , u i t h heavy i n i t i a l r e l i a n c e on. f o r e i g n c a p i t a l , technology, and mnagement. The stress Lewis, 1972, placed on c o n p e t i t i v e l a b o r - i n t e n s i v e exports vss not ennhasised.'- The" Gi?L- ;ztc&ed t h e government f o r a l l e g e d c o r r u p t i o n and f o r depending too much on " e x p l o i t a t i v e f o r e i g n c a p i t a l " but because i t represented a n unwieldy c o a l i t i o n of r u r a l a s t I n d i a n s , urban poor and a s m a l l European e l i t e , i: never coalesced. The DPL's weakness allowed t h e PLJM t o energe a s a s t r o n g u n i t a r y government l a r g e l y f r e e of c o o p e t i t i o n u i t h i n i t s ranks. T h i s was to be important i n keeping puollc expenditures nore d i s c i p l i n e d than those of n o s t o t h e r o i l e x p o r t i n g g o v e r m e n t s . Early i n 1970 s t r e e t demonstra:ions and a m t i n y i n the a r n y gave voice t o qidespread d i s s a t i s f a c t i o n with growing economic problens caused by d e c l i n i n g o i l revenues. The PNH recognizeh t h a t d i s c o n t e n t was sufficient t o nount a c r e d i b l e c h a l l e n g e t o its power. It reluctantly undertook a populist - c o u r s e focused around r h r e s ,xiin goals : - -1/ Xer.wich, 1983. Lowenthal, 1972, d e f i n e s the s o c i a l j t r u c t u r e a s " c u l ~ u r a l ?luralism"in vhich groups i n t e r a c t f o r economic ?ur?oses but achere to r e l i g i o u s o r e t h n i c ~ r o u p i n g s i n s o c i a l 3 a t r e r s . o t o excend p u b l i c ownership, o t o r c d i s t r i b u t e income more e q u i t a b l y , and 0 t o a c c e l e r a t e i n d u s t r i a l d i v e r s i f i c a t i o n o u t of o i l . 2b. Economic S t r u c t u r e -o i l Sector. O i l was discovered i n 1857 and i n 1913 S h e l l becoue T r i n i d a d ' s f i r s t producer. By t h e 1950's Br-itish Petroleum, Royal Dutch S h e l l and T e ~ s c oo p e r a t e d o i l r e f i n e r i e s , augmenting domestic crude v i t h i n p o r t s from Venezuela. By t h e e a r l y 5970s petroleum extracting and r e f i n i n g accounted f o r almost t h r e e q u a r t e r s of exporrs, nrre , f i f t h of government revenue and 20 percent of GDP. Fron t h e l a t e 1960s o i l production and r e f i n e d e x p o r t s had begun t o drop. P u b l i c spending was c u t from 23 t o 20 percent of GI?? and a modest budget d e f i c i t of 4-7 percent of GDP financed half through overseas borrowing and half from doneskic sources. Between 1970 and 1973, GDP growth slowed t o 3.6 percent (4.5 p e r c e n t f o r non-mining GDP) from a l a o s t 5.5 percent over tne precedizg 15 years w h i l e i n f l a t i o n r o s e i r o n an average of 2.5 percent Ln ttie 1960s t o over 10 p e r c e n t i n t h e e a r l y 1970s. Even h e f o r e t h e d i s t u r b a n c e s of 1970 t h e governuent had taken a small s t e p towards n a t i o n a l i s i n g t h e o i l i n d u s t r y , buying 3 r i t i s h P e t r o l e e u ' s r e f i n e r y and f i e l d f a c i l i t i e s : Sandoval 1983. 2-larine e x p l o r a t i o n c u r i n g 1969 and 1971 revealed s u b s r a n t i a l new e s t i m a t e s of recoverable o i l and gas. Oil. production rose from a low of 129,000 b z r r e l s per _day (bpd) i n 1971 co 151,600 bpd i n 1973, 5:~ceedLng t h e previous peak i n 1969. ? ~ l t h o u ~ohi l r e s e r v e s s e r e e s t i m a t e d a t only about 10 years o u t p u t , t h e s e f i n d s reduced t h e i m e d i a t e p r e s s u r e f o r ? o l i t i c a l l y d i f f i c u l t s t r u c t u r a l change. x o n o i l S e c t o r s . A t t h e s t a r t of t h e 1970's n a n u l a c t u r i n g , though h e a v i l y p r o t e c t e d by a "negative list" of p r o h i b i t e d imports and o t h e r measures (which i n s n y cases doubled p r i c e s r e l a t i v e t o imports) accounted f o r only 22.0 percznt of non-mining GDP. A g r i c u l t u r e , dominated by s u g a r , - . accounted f o r only another 5.8 percent. There w a s l i t t l e t o u r i s t t r a d e . The economy was t h e r e f o r e h e a v i l y oil-dependent-nonoil t r a d e a b l e s , a g r i c u l t u r e and m n u f a c t u r i n g , accounted f o r only 27.8 percent of n o m i n i n g GDP a s a g a i n s t a Chenery-Sryquin "norn" of 42 percent f o r c o u n t r i e s a t comparable l e v e l s of income per head. L/ A n uneven incone d i st r i b u r i o - n r e l l e ct e d pronounced dualism o r che economy between high-technology o i l and nanufacturing s e c r o r s and Lou-skill a g r i c u l t u r e . I n 1973 a g r i c u l t u r e g e n e r a t e d one s i x t e e n t h o f t h e v a l u e addea per worker i n o i l r e f i n i n g and one f i f t h of t h a t i n c h e n i c a l s . h g r i c u l c u r e too was d u a l i s t i c ; v a l u e added per worker i n sugar was almost f o u r c i c e s t h a t i n the r e s t of t h e s e c t o r . R e f l e c t i n g the=e d i s p a r i t i e s , the e l i t e segment of o i l workers, less than f o u r percent of t h e councry's l a b o r f o r c e . earned USS5,000 a year conpared with USS750 f o r a l l o r h e r workers and US$325 f o r a g r i c u l t u r a l workers: Black et. a l . 1976. -- Uneven incone d i s t r i b u c i o n was accentuated by high and r i s i n g unenployaent which topped 14 percent i n the e a r l y 1970s. 4n the economy a s a whole, sevency 2ercrnt qr cke llaoor forct: was unionised. -1/ Xorn e s t i n a t e s a r e based on Chenery ar.d Syrquin ( i 9 7 5 ) , caking nonnlning GDP/head a s t h e indicator of incone/head. III. TlIE FIKST OIL SHOCK, 1974 - 1978 3a. The S i z e of t h e !Jindfa11 h shown in Figure 1 Trinidad and Tobago experienced an unusually l a r g e w i n d f a l l o v e r 1974-78 r e l a t i v e t o o t h e r c a p i t a l - i n p o r t i n g exporters-39 p e r c e n t of non-mining GDP--because new o i l f i e l d s began t o come on strean i n s u b s t a n t i a l q u a n t i t i e s j u s t a s t h e enbargo of 1973 caused the worldwide p r i c e of o i l t o g u a d r u p l e L i Corporate and o t h e r t a x e s ( T r i n i d a d does not follow t h e common OPEC system) were r a p i d l y a d j u s t e d to. syphon off f i v e s i x t h s of i n c r e a s e d revenues. O i l t a x e s jumped from one f i f t h of government revenues before t h e boom t o 60 percent i n 1974-78: s e e Figura 2 , . 3b. Uses of t h e Windfall F i s c a l p o l i c y w a s i n i t i a l l y very c a u t i o u s r e l a t i v e t o t h a t of o t n e r o i l e x p o r t e r s . The country had j u s t emerged from a period o f L ' ~ u s t e r ~ t y ; u n l i k e Ecuador and Venezuela ( K a r l , 1982; ,%rsnall-Silva, 1934), s t r o n g , u n i f i e d government reduced intra-public-sector competition f o r r e v e n w s ; u n l i k e Nigeria (Bienen, 1984) t h e r e were no s t r o n g r e g i o n a l i n t e r e s t droups. To l i m i t dependence on o i l revenues, t h e p r o g r e s s i v e nonoil t a x system w a s k e p t i n place though t a x b r a c k e t s were i n f l a t i o n - a d j u s t e d . O i l revenue . 1 exceeded r e c u r r e n t spending by 40 percent; s e e FLgure 2. E x i s t i n g p u b l i c '9 - 11 The ~ i n d f a l land its uses a r e estimated r e l a t i v e t o a hypothetical *- - P p r o j e c t i o n involving ( a ) r e l a t i v e p r i c e d e f l a t o r s c o n s t a n t a t t h e i r - average 1970-72 l e v e l , ( b ) a c o n s t a n t r a t i o of r e a l a i n i n g o u t p u t t o t nonnining GDP, 'c) a constant r a t i o of t o t a l a b s o p r t i o n t o output and ( d , c o n s u p t i o n and i n v e s t a e n t changing t h e i r s h a r e oi a b s o r p t i o n i n line u l c h the Chenery-Syrqain, 1975 norns. For nore d e t a i l see G e l b , 1984. Figure 1 The Oil Windfall and its Use: 1973-81 Trinidad and Tobago : Fiscal Evolution O i l Revenue subsidies (Oil Revence-Recurrent E? .) programs were not s c a l e d up a s i n c e r t a i n o t h e r e x p o r t i n g coitntries. :Tor d i d t h e government r e d r a f t its new f o u r t h five-year plan f o r 1974-78, nou o b s o l t t e . A nation-wide debatc on how '0 deploy t h e nev wealth l a s t e d i n c o 1976, so t h a t i n 1974-78 a l r o s t half t h e w i n d f a l l w a s i n v e s t e d abrcad i n S p e c i a l Funds f o r Long-Tern Development. R e l a t i v e t o non-mining GDP, t o c a l a b s o r p t i o n had been high i n 1970-72 because foreign-financed investment t o t a p t h e new o f f s h o r e f i n d s ha?, permitted a c u r r e n t d e f i c i t averaging 14.5 percent of nonminkng GDP. Xbsorpt ion rose f u r t h e r af ter !975 a s spending from t h e w i n d f a l l a c c e l e r a t e d , a s shown i:: Figure 1. Over 1974-78 e x t r a revenues were used a s follows: ( 1 ) 70 percent was saved abroad, transforming c u r r e n t d e f i c i t s i n t o u s u r p l u s e s which averaged 10 percent of 1976 nonuining GlIR eve-r. 1974- 78. ( 2 ) 12 percent w a s i n v e s t e d dome.stically *.. (3) 18 percent was consumed. A s shown i n Fignre 1 , r e l a t i v e t o o t h e r e x p o r t e r s savings doroad was e x t r e n a l y l a r g e , and domestic i n v e s t n e n t was i n i t i a l l y modest. Consumption out of w i n d f a l l gains was f a i r l y high a f t e r 1975. ( 1 ) Savings abroad. By 1978 i n t e r n a t i o n a l r e s e r v e s reached USSL .8 b i l l i o n , up from USS47 n i l l i o n i n 1973. Reserves were used t o e s t a b l i s h a & high i n t e r n a r i o n a l c r c 6 i t r a t i n g ; l o a n s of US3157 3 i l l i o n and USS112 n i l l i o n were negotiated i n 1977 and 1978. S t r i c t c a p i t a l co.ltrols l i m i t e d o u t l l o r ; ~ ; a e d i u n and long t e r n debt w a s US$417 n i l l i o n a t t h e end of 1978. ( 2 ) Domestic i n v e s t a e n t . The l a ~ ~ e sa lcl o c a t i o n s were f o r : ( a ) E economic and s o c i a l i n f r a s t r ~ c t u r e ,(5) gas-based i n d u s t r i d l i z a t i o n , and (c) n a t i o n a l i z i n g and "saving" e x i s t i n g i n d u s t r i e s . Only i ~ a l fof the TTS4 t i l l i o n catmarked "Funds f o r Long-Term Development" had been spent by the c l o s e or 1978. Of the funds a c t u a l l y used, approximately half vent i n t o econonic i n f r a s t r u c t u r e - t r a n s p o r t a t i o n , ?ewer, and wate. and. one f i f t h went to s o c i a l inf r a s t sture-education and housing. I n £r a s t r u c t u r a l i n v e s t a e n t w a s seen a s labor using and ained t o e l i n i n a t e a n i n f r a s t r u c t u r a l backlog a c c u ~ u l a t e di n the l a t e 1966s. I n s t e a d of accepcing iUIOCO's proposal to export l i q u i i l e a n a t u r a l gas (LNG) t o t h e United S t a t e s , i n 1975 the government created a task f o r c e co plan gas-based i n d u s t r i a l i z a t i o n . It experisented with different r o n s of ownership, refusing j o i n t ownership proposed by the m u l t i n a t i o n a l s when i t bought out t h e i r o i l r e f i n e r i e s but accepting t h i s i n two fertilizer piants, taking a 51 percent equity stake. Foreign p a r t r ~ e r swere responsible f o r technology, managenent, and marketing. Attempts t o n e g o t i a r e o t h e r j o i n t ventures collapseci because the d e s i r e t o spend o i l revenues led the gove,, ~ nnt e t o downplay r i s k a o r e than p r i v a t e partners. Tn 1976 it planned a j o i c t s t e e l venture where the s t a t e uould own 67 percent and Hoesch-Zstel, Kawasaki and ' l i t s u i the balance. Later i n 1976 governnenc cancelled the agreenenc on the grounds t h a t (i) t e r n s offered by the p r i v a t e i n v e s t o r s were poor, ( i i ) t h e i r denanas f o r f i s c a l i n c e n t i v e s vere unreasonable and ( i i l ) :heir s a l e s s t r a t e g y excluded North Xnerican markets.. the s t a t e went ahead on its own, relying on four i n t e r n a t i o n a l companies to develop tile plant on c o n t r a c t d e s p l t a ~ a r n i n g s - of market access p r o b l e m and of a low race of return. dy the end of 1378 1 - TTS240 A l l i o n had been spenc on the project. - Impatient w i ~ hslow ?regress, i n 1977 the gover$ent a l s o abandoned plans t o build a gas-based aluninuz smelt e r with Guyana and Janaica. .*other p a r t n e r , .;ational Suuthrcire, comnitted co only 10 ?ercenc of the equicy and began f e a s i b i l i t : ~s c u d i e s . However, the goal of c r e a t i n g new i n d u s t r i e s was l a r g e l y s i d e t r a c k e d i n t o taking over d e c l i n i a - i n d u s t r i e s t o m a i n t a i n jobs. I n 1974--78 TTS1.67 b i l l i o n (one year's o i l revenues) was s p e n t i n a c q u i r i n g 40 companies i n c l u d i n g t h e purchase of remaining c o n t r o l i n the l a r g e Caroni sugar r e f i n e r y (government had acquired a s j o r i t y s h a i e i n 1969), and a TTS93.6 n i l l i o n buy- out of Royal Ducch S h e l l ' s r e f i n e r y (renamed t h e T r i c t o c r e f i n e r y ) , the z e c c n ~ l a r g e s t i n t h e country. This clove was popular, especially wich the a i l i t a n t o i l workers' union which saw it a s a s t e p towards n a t i o n a l i z i n g the l a r g e r Texaco r e f i n e r j . ( 3 ) Domestic Consumption. R i s i z g subsLdies f o r food, 5 l e l and u t i l i t i e s a b s o r j e d TT$760 n i l l i o n i n L974--78. O i l p r i c e s v e r e held to nalf i n t e r n a t i o n a l l e v e l s ; u c i l i t y companies began t o . r u n l d r g e o p e r a t i n g u e r i c i t s having been unable t o r a i s e r a t e s s i n c e t h e end of che 19611s and i n one c a s e 1937. Consumer j r i c e s t h e r e f o r e rose l e s s r a p i d l y than o t h e r p r i c e s ; s e e Figure 3, and d e f l a t e d consunption ( a s neasured i n n a t i o n a l accounts) r o s e s h a r p l y r e l a t i v e t o nominal consunpcicn, a s shown i n Figure 1. By 1978 s u b s i d i e s were estimated t o account f o r more than 7 percent or G3P and recorded f i s c a l s u b s i d i e s accounted f o r 22 percent of o i l revenues: s e e Figure 2. Labor :as a l s o s u b s i d i s e d d i r e c t l y . The s c a t e P u b l i c -darks progran (DESID) provided 10,000 jobs, esploying 2.5 percent of the t o t a l workforce a t wages f a r above those p r e v a i l i n g i n a g r i c u l ~ u r e . O v e r a l l p u b l i c s e c t o r employment ex?anded from 86,000 t o 158,gOU--from l e s s than a q u a r t e r t o n o r e than a t h i r d of t h e n a t i o n a l coral. E. -- Trinidad and Tobago: Relative Prices and Wages Relative Prices Trade weighted Real Exchange 140 120 100'-!//- a umer prices/ - 80 * Xonmining output Def lacor Xeal Wage Trends - - Sugar .. - /F'urniture and Wood products * - - S t r u c t u r a l Change i n Trinidad's Economy: "The Dutch Disease" A g r i c u l t u r a l out Output \ Nonnining Tradeab l e s / Sonmining GDP II I I \ : \ ' 1 Citrus Output \ (1910-72 100) u' 3c. R e s u l t s Over 1974-78 Secause of t h e c a u t i o u s response t h e main cnnsequences of the p o l i c i e s i n i t i a t e d during t h e f i r s t shock were not t o appear u n t i l l a t e r . .Uthough a l a r g e r e s e r v e cushion had been b u i l t up, and i n t e r e s t payments on f o r e i g n a s s e t s were t o mount t o $100million i n 1978, r e c u r r e n t expenditures had begun t o r i s e ( t h e r e were stla11 f i s c a l and c u r r e n t balance d e f i c i t s i n 1979). Investment i n d e c l i n i n g i n d u s t r i e s d i v e r t e d revenues i n t o s u b s i d i z i n g l o s s e s ; i n t h e case of t h e sugar i n d u s t r y , governnent had t o cover o p e r a t i n g l o s s e s of lTS247 n i l l i o n i n 1977-78. ~ a n a ~ e n e nd ti f f i c u l t i e s compounded t h e p o l i t i c a l l y expeaient use of nuch of t h e w i n d f a l l t o make it impossible t o r e v e r s e a g r o u l n g ' s t r u c f u r a ~ s h i f t i n f a v o r of nontradeables shown a s t h e " ~ u t c hDisease" i ~ d i c a d o-zi.,n,,, Figure 4. Programs t o expand domestic food production were poorly conceived. Despite a p l e c t i f u l supply of l a n d , i n a p p r o p r i a t e s i t e s ana farmers were chosen f o r new r u r a l p r o j e c t s ( P o l l a r d , 1981). Unly a q u a r t e r of t h e o u t l a y s f o r food s u b s i d i e s went t o producer i n c e n t i v e s . P r i c e c o n t r o l s squeezed p r o f i t s a r g i n s and food i n p o r t s r o s e s h a r p l y f r o n TT$161 u i l l i o n i n L973 t o ;TSb58 much i n 1978. The d e c l i n e of t h e export s e c t o r , notably s u g a r , is d e a l t with i n Section IV. Xanuf a c t u r i n g continued t o be o r i e n t e d t o t h e domes t i c narket , whose 5. I s n a l l s i z e i n h i b i t e d economies of s c a l e , c o n p e t i t i o r ~and v e r t i c a l linkages: T.JO t h i r d s c o n s i s t e d of f i n a l s s s e n b l y of i a p o r t e d products, notably c a r k i t s - and food processing, with low added value. I a p o r r c o n t r o l s r e d u ~ d i c o n p e t i t i v e p r e s s u r e t o produce q u a l i t y products (Sandoval 1983, + r i g h t B b 1981). l i e f i l w r j a c t i v i t y f e l l by $0 percent. Venezuela, which had suppLiea txo t h i r d s of Trinidad ar.d Tobago's crude, c u t .back outpuc and i n t e r n a l i z e a i t s refining while l e g i s l a t i o n i n the United S t a t e s increasingly favored domestic r e f i n e r i e s . I n c o n s t a n t 1970 d o l l a r s t h e a i n i n g s e c t o r ' s s h a r e i n t o t a l GDP d e c l i n e d t o only 7.0 percent; r r i n i d a d was s t e a d i l y i n c r e a s i n g r t s dependence on an o i l s e c t o r contracEing i n r e l a t i v e t e r n s . I n f l a t i o n was q u i t e moderate due t o p r i c e c o n t r o l s and tne openness of t h e economy: the boom caused a jump t o 22 per c e n t i n 1974 which f e l l t o 17 percent then t o around 10 per cent. T r i n i d a d and Tobago had devalued by 22 percent a g a i n s t t h e weak US Dollar i n 1975-77. T h e r e a f t e r , it maintained a fi: f i n i s t r y of A g r i c u l t u r e 1983). The governnent had planned t o s h i f t resources from e x p o r t t o domestic crop production, but more than a decade af ter t h a t decisio21, 70 percent of t h e a r a b l e land remained i n export crop production and t h e poorly p e r f o m i n g e x p o r t s e c t o r received n o s t of t h e subsidized farm i n p u t s . I n 1983 T r i n i d a d and Tobago produced one f i f t h of i t s r i c e needs f r o n r a m s chat dveragea 0.5 h e c t a r e s , y i e l d e d about 2 tons per & c t a r e and took only one crop a n n u a l l y . i n t h a t year t h e domestic s e l l i n g p r i c e f o r rice yas US$S17 a ton; t h e s u b s i d i z e d p r i c e guaranteed t o f a r a e r s was USS825 which w a s s a i d t o be i n s u f f i c i e n t t*>cover c o s t s ( A g r i c u l t u r a l S t a t i s t i c s O f f i c e 1983). I n c o n t r a s t , mechanised r i c e farms i n Suriname could provide income over U S ~ ~ U O U p e r h e c t a r e a t i n t e r n a t i o n a l l y c o m ~ e t i t i v ep r i c e s i n about 25 uanaays (one t h i r d the l a b o r r e q u i r e d i n T r i n i d a d and Tobago) and a t lower u n i t l a b o r c o s t s . Reversing O i l Dependence 3y 1981 proven recoveranle o i l r e s e r v e s were e s t i n a t e d a t 603 m i l l i o n b a r r e l s or ten-years supply, and oj.1 p r i c e s were f a l l i n g . Xs l a t e a s the middle of 1981 gas-based i n d u s t r i e s were projected t o y i e l d enough revenue t o o f f s e t t h e d e c l i n e i n o i l u n t i l LXG exports and t h e downstream i n d u s t r i e s could be developed i n t h e l a t e 1980s (Rampersad 1981b). At 1983 l e v e l s of prL-duction, proven gas r e s e r v e s represented 54- y e a r s ' supply and probable r e s e r v e s could extend c h i s t o 70 years. The proposed l a r g e LSG export p r o j e c t had a l e a d t i m e of f i v e t o six y e a r s , s o t h a t much depended on t h e p e r f o m a n c e of t h e f i r s t round or Point L i s a s gds- bas2d projects coning on stream. V. GAS-BASED IXDUSTRIALIZXTION 5 . 1 . The Appeal of Gas-Based I n d u s t r i a l i z a t i o n " ' The f i r s t Phi4 government encouraged c a p i t a l - i n t e n s i v e exporc p r o j e c t s - while p r o t e c t i n g i n p o r t - s u b s t i t u t i ~ g industry. The f i r s t gas-based factcr:? Q - - b u i l t i n the l a t e 1950s near P o i n r L i s a s produced f e r t i l i z e r f o r export. I n 1966 t h e Point i i s a s I n d u s t r i a l ~ e y e l o ~ m e nCorporation was forned t o pronote t gas-based in dust^ but najor developcent did not cone u n t i l the f i r s t o i l boon. I n 1974 t h e g o v e r m e n c s of Trinidad and Tobago, Jamaica, and Guyana agreed t o conduct f e a s i b i l i t y s t u d i e s of a jointly-owned s m e l t e r a t Point Lisas. .L?lOCO had put f o r t h an a l t e r n a t i v e p r o p o s a l f o r an LXG p l a n t chat would have absorbed the g r e a t e r p a r t of gas r e s e r v e s while y i e l d i n g USs15 m i l l i o n i n tax revenues-less t h a n one q u a r t e r of o i l revenues a t t h e t i m e ( X i n i s t r y of ?o-troleurr. 1971). The ?iiZOCO prop0s;rl r-Jas r e j e c t e d i n favor of gas-based i n d u s t r y , but t h e r e is no evidence t h a t t h e a l t e r n a t i v e s v e r e s y s t e u a r i c a l l y ccnpared. Though t h e government d i d envisage 50 labor- i n t e n s i v e douns t ream process i n g p l a n t s , c a p i t a l - i n t e n s i v e heavy i n d u s t r y was t o dominate t h e f i r s t decade ~f Point L i s a s ' s development .. Gas-based p r o j e c : ~ wer2 j u s t i f i e d on t h e grounds t h a t they could ( i ) a t t r a c t o u t s i d e f i n a n c i n g a t f a v o r a b l e L n t e r e s t r a t e s ( l e a v i n g o i l revenues f o r o t h e r uses: Government financed only one t h i r d of t h e average v e c c u r r ) , (:i) g e n e r a t e n e t f o r e i p exchange earnings and ( i i i ) provide s u b s t a n t i a l revenues through taxes arid r e t u r n s on s t a t e e q u i t y . Though they p r o a i s e d few permanent jobs, c o n s t r u c t i o n em?loynenc, the l a b o r demnds of t h e Fro j e c t e i downstream f a c t o r i e s and t h e p e m n e n t pool cf s k i l l e d n a t i o n a l s t o be generated by t h e p r o j e c t s v e r e considered a s benef its (!EC 1981). But a l s o important was a s t r o n g n a t i o n a l i s t dppeal i n t h e ?rospecc of l e a p i n g from a p l a n t a t i o n ecoqomy t o a technol.ogicallq s o p h i s t i c a t e d s t a t e . Secause of t h i s , t h e government ignored t h e n a i n disadvantages of gas-based i n d u s c r i a l i z a c i o n : ( i ) j.t p r o j e c t e d the p r o b l e m of a n i n e r a l econoEy i n t o enclave i n d u s t r i g 1 --- ? diversification, (Fi) it postponed r e f o m in the nonhydrocarbon seccors and - (i i i ) it depended on Arolatile external narkecs . . I a 1975 t h e governnent concluded a g r e e n e n t s x i c h W . d . Grace co build a l a r g e annonia p l a n t and with r h r e e s t e e l f i n s :o c o n s t r u c t a DXI/sceel u n i t . I n 1976 it agreed t o a j o i n t h o c o f e r t i l i z e r plant. L a t e r lt explored proposals f o r an aluminm s n e l t e r with National Southwire, an LNG terminal w i t h Tenneco and a d c o n , a urea p l a n t with Agrico-Chemicals and a methanol f a c i l i t y with Borden. Bot a l l schemes were implemented before t h e second o i l boom w a s punctured. Gas-based p r o j e c t s a r e highly c a p i t a l - i n t e n s i v e . This r a i s e s pressure f o r premature e n t r y when i n f l a t i o n is expected t o be high and r e a l i n t e r e s t r a t e s law, a s over t h e mid-1970's. X t y p i c a l vencure such a s t h e rnethanol p l a n t might have a t h r e e year c o n s t r u c t i o n period and be two t h i r d s loan . .., . . financed. Repayment would be over 8 years durir.ug Ghich t i n e - C h e . . . p C a ~ ~ r + ~ . : r l d be depreciated. Thereafter government would o-.-.-Ckr: : >hin~,:+ .~8&&.; .5311ld, be . . expected t o l a s t f o r anocher 10-20 years and would be a b l e t o undercut new p l a n t s b u i l t at higher prices and facing l a r g e c a p i t a l charges. 5.2 Problens of Entry: t h e Case of S t e e l . I n 1977, a f t e r withdrawing from the planned j o i n t s t e e l venture the government began its own venture through ISCOTT. It called for a plant witn 750,000 tons sf b i l l e t and a 450,000 t o n DRI u n i i with a scrap complement. 3ut a n t i c i p a t i o ~ sof scrap shortages prompted the a d d i t i o n of a second D R I I L u n i t , adding 25 percent t o c o s t s and unbalancing t h e production chain. The second D R I u n i t and a construction-cost - overrun of 30 percent r e s u l t e d i n a - f i n a l c a p i t a l c o s t o@L:S$500 n i l l i o n , requiring s u b s t a n t i a l new financing a t - high i n t e r e s t r a t e s . !e Since t h e domestic m r k e t was only 60,000 tons, two t h l r d of production was targeced t o the southeastern United Scates where efficient n i n i - n i l l s a r e among the a o s t competitive i n t h e world (!3arnetc and scnursch 1983). ISCOTT'S u n i t c o s t s a s s m i n g f u l l c a p a c i t y f o r t h e f i r s t DKI u n i t and 80 percent c a p a c i t y f o r t h e b i l l e t p l a n t were US$ &LO/tonne coopared t o US$ 270/tonne f o r t h e n i n i n i l l s . A m r k e t i n g survey had warned t h a t ISLOTT woula need t o r:qdercut its U.S. c o m p e t i t o r s by 1 5 p e r c e n t , but a s u c c e s s i u l 19b2 anti-dumping s u i t imposed a 14 p e r c e n t penalty o n ISCOTT (Chambers 1984). T h i s l e f t t h e p l a n t w i t h t o t a l l y inadequate markets and annual. c a p i t a l charges of more t h a n USS100 m i l l i o n . The worst-case p r o j e c t i o n f o r ISCOTT q u i c k l y became o v e r l y o p t i m i s t i c ; cumulative los'ses t o A p r i l 1982 were almost TT$400 m i l l i o n , e q u a l t o one f i f t h of 1979 o i l revenue (Caribbean Contact 1982). I n 1983 t h e governnent was r e p o r t e d t o be c o n s i d e r i n g mothballing t h e p l a n t . The unexpectedly s e v e r e world r e c e s s i o n t h a t began i n 1 9 8 1 i n v a l i d a t e d r e z l i n t e r e s t rate, r e l a t i v e - p r i c e and demand p r o j e t ; i ~ ~ ~ r ,AS ~ + late a s 1980 t h e OECD was f o r e c a s t i n g t h a t g l o b a l s t e e l consumption would almost double t o 1400 n i l l i o n t o n s by t h e y e a r 2000. Xore r e c e n t p r o j e c t i o n s i n d i c a t e a rise of only 20 p e r c e n t , t o 900 d l l i o n tons, w i t h almost a l l t h e r e d u c ~ i o nfrom i n d u s t r i a l c o u n t r i e s ( B a r n e t t and Schorsch 1983). Slarginal, exporz-oriented new p l a n t s such a s ISCOTT's were t h e a o s t s e r i o u s l y a f f e c t e d . T r i n i d a d and Tobago would have had a second c r i p p l i n g i n v e s t s e n t had it proceeded with plans for a 150,000-ton a l u n i n u n smelzer. I r o n i c a l l y t h e p r i n c i p a l reason f o r abandoning t h e p r o j e c t was t h e government's i n p a t i e n c e L w i t h t h e l a c k of progress i n e n t e r i n g t h e i n d u s t r y i n tise t o capcure t n e widely-anticipated boom i n aluninirnum p r i c e s . By 1980 t h e government vas c l o s e t o zgreement on a j o i n t v e n t u r e w i t h N a t i o n a l Southwire f o r a US$500 - a i l l i o n s m e l t e r :o s t a r t up in 1984. It equired an estimated n e t a l ?rice of 6 - USS0.92 a pound i n 1982 d o l l a r s , b u t i n 1982 t h e ? r i c e of a l u n i n u n c o l l a p s e d t o USSO.S3 a pound and excess c a p a c i t y nay persis: i n t o the 1980s (Vais 1982). The prudent d e c i s i o n n o t t o proceed s u g g e s t s a n important r o l e f o r p r i v a t e e q u i t y parzners i n heightening the s e n s i t i v i t y of s t a t e c o r p o r a t i o n s t o r i s k . 5.3 Ranking t h e Options: Comparative Returns from Gas-Based I n d u s t r y Table 1 compares t h e seven gas-based p r o j e c t s b u i l t , under c o n s t r u c t i o n , o r proposed f o r P o i n t L i s a s by the end of t h e second o i l boom. A11 c o s t s a r e based on i n d u s t r y e s t i m a t e s of t h e o p e r a t i n g c h a r a c t e r i s t i c s of the P o i n t L i a a s p l a n t s . These c o s t s a r e expressed i n 1982 US d o l l a r ; ; they t o t a l f o u r and a half t h e 1980 o i l windfall. E s t i n a t e s assume t h a t t h e p r o j e c t s o p e r a t e a t designed c a p a c i t y . I n columns X and B t h e netbacks on gas i n p u t s r'sc- ~s ~f .~xr,racs5i~w &Pe lower, would any t r u e rent accrue t o the government. The prices compare t o t h e $4.50 border p r i c e f o r Mexican and Canadian gas i n 1982, the $2.80-$3.40 range f o r new wells i n the United S t a t e s and $7.30 f o r deep gas i n t h e United S t a t e s . The main r o l e of LXG is t h e r e f o r e t o enable government t o o b t a i n a posssibly high, though r i s k y , r e t u r n on domestic investments; only an LiiG p r o j e c t using gas from the o l d e r , cheaper, f i e l d s would have generated a Large r e n t component .-11 * -I / The e s t i n a g d c o s t s of gas e x p l o r a t i o n and gas &athering d i f f e r oy a r a c i o of about 10-to 1. Yuch of the discrepancy l i e s i n the uncertainty of exploring and gathering and i n t n e nore s c a t t e r e d f i e l d s co oe prospected i n the l a t e r proposal. These f i e l d s a l s o Lie i n deeper x a t e r chan tne f i r s t generation of gas f i e l d s . V I . CONCLUSION. The experience of T r i n i d a d and Tobago over t h e Last decade i l l u s t r a t e s t h e p o l i t i c a l and economic o b s t a c l e s t o avoiding i n c r e a s e d dependence on n a t u r a l r e s o u r c e r e n t s . D e s p i t e i n i t i a l l y c a u t i o u s f i s c a l p o l i c y , t h e p o l i t i c a l need t o d i s t r i b u t e r e n t widely a c r o s s t h e economy l e d t o t h e r a p i d grovth of s u b s i d i e s t o consumers, l a b o r and f a i l i n g firms. Tnis u s e of t h e w i n d f a l l was e s p e c i a l l y pronounced r e l a t i v e t o t h a t of cooparator c o u n t r i e s , because of T r i n i d a d ' s d e n o c r a t i c p o l i t i c a l system and t h e v u l n e r a b i l i t y f e l t by t h e government t o organized p r o t e s t a f t e r 1970. While r e a l consumption b e n e f i t e d from s u b s i d l e s and p r i c e c o n t r o l s , t h e s e , t o g e t h e r with wage i n c r e a s e s , r e a l a p p r e c i a t i o n and t h e extensi-on- ,d?' "public odnets h i p undernined a g r i c u l t u r e and manufacturing, t h e s e c t o r s producing nonhyarocarbon t r a d e a b l e s . Windfalls financed t h e pos tponenent of fundamental change needea t o a r r e s t a g r i c u l t u r a l d e c l i n e and improve manusacturing's.coapetitiveness. I.. Over 1972-81 c o n t r a c t i o n i n t h e s h a r e of nonnining t r a d e a b l e s i n nonmining bDP r e l a t i v e t o its n o m was t h e g r e a t e s t i n t h e s a n p l e of comparator c o u n t r i e s . Thus, although T r i n i d a d and Tobago ended the second o i l boom with SUS2.6 b i l l i o n i n n e t a s s e t s abroad its econony was f a r nore oil-dependent than e v e r before, a s revealed by t h e magnitude of f i s c a l and c u r r e n t account r L d e f i c i t s i n 1982-83. Its attempts to diversify had emphasised gas-based i n d u s t r y , t h e r e t u r n s on much of which, e s p e c i a l l y s t e e l , promised t o be - - low. Eagerness t o spend oil'jrevenues l e d t h e government t o downplay t h e r i s k involved i n such l a r g e p r o j e 8 t s and t o "go it alone" which conpounded h n a r k e t i n g problems when demafld f o r e c a s t s proved t o be o v e r o p t i n i s t i c because it had no dounstrean foreign partners. Gas-based i n d u s t r y has pre-enpted cheaper gas from LNG--the one p r o j e c t which could have y i e l d e d a p p r e c i a b l e r e n t , t o supplement t h a t f r o n o i l . R e l a t i v e t o o t h e r o i l c o u n t r i e s T r i n i d a d ' s experience over the o i l booms has nad some p o s i t i v e f e a t u r e s . Its citizens have reaped large consumption g a i n s and i t ended with a s u f f i c i e n t reserve cushion t o a d j u s t smoothly t o f a l l i n g o i l revenues. The danger over the nexs few y e a r s i s t h a t p o l i t i c a l c o n s i d e r a t i o n s w i l l s o slow t h e adjustment process t h a t t h e councry e n t e r s i n t o crisis a s have t h r e e of its f i v e comparators, Ecuador, Nigeria and Venezuela. REFEKENCES A g r i c u l t u r a l S t a t i s t i c s S e c t i o n (1983) S t a t i s t i c a l Revie2 1983, X n e o , P o r t of Spain. ~ u t y ,R. X. (1976) Caribbean sugar factory s i z e and s u r v i v a l , Annals A s s o c i a t i o n of . h e r i c a n Geographers, vol. 66, 00. 76-88. huty, R. M. (1983) Gas-based e x p o r t s a s a n LDC energy s t r a t e g y : Trinidad and Tobago, Unpublished Working Paper, P r i n c e t o n , February. a a r n e t t , D. F. and Schorsch, L. (1983) S t e e l : Upheaval i n a Basic I n d u s t r y , B a l l i n g e r Publishing Co., Cambridge. Beckford, G. L. (1972) P e r s i s t e n t Poverty, Oxford U n i v e r s i t y P r e s s , Oxford. a i e n e n , H. (1983), " O i l Revenues and P o l i c y Choice i n Nigeria," World uank, S t a f f Working Paper Number 592, Airg3st.- - Black, J. K. et a l . (1976) A r e a Handbook f o ~ ~ z r i n i d adnd,'[eQa,52$,. F i r s t -. d E d i t i o n , U.S. Government PrLnCi'ng O f f i c e , Washington. Bobb, E. (1978) Report of t h e Commi:tee t o Review Government Expenditure, Government P r i n t e r , P o r t of Spain. Srewster, H. (1972) The growth of enploynent under export-based underdevelopment, S o c i a l and Econonic S t u d i e s , vol. 21, pp. 152-169. 3rocm, 3. er a l . (1983) Worldwide investment a n a l y s i s : t h e c a s e of aluminuu, World Bank S t a f f Working Paper 603, Yimeo, Washington. Caribbean Contact (1982) T r i n i d a d ' s O i l Problems, v o l . 10 no. 6 , October. Caroni (1975) Ltd. (1978) D i r e c t o r s ' Report and Accounts 1977, Ploonan - P r i n t e r s , Couva. C e n t r a l h c k pf Trinidad and Tobago (1981) Annual Report, \Lineo, P o r t UL Spain. C e n t r a l Bank of Trinidad and Tobago (1982a) B e l a t i o n s h i p between ~ n f l a t i o nana d e c l i n i n g p r o d u c t i v i t y , Ximeo, Port of S p a i n . d - C e n t r a l %nk of Trinidad and Tobago (1982b) hnu"a1 iieport, ;ti=eo, Yort or Spain. -- L - * Chanbers, G. (1987) Address of t h e 23rd Conventien of t h e ?:.i;.f, Xineo, or^ or Spain, October 1. Chamgers, G. (1984) 3udget Speech, Governnent " i n t e r , Port or Spain. Chenery, H. 3. and Syrquin, X. (1975) Patterns of Development 1550-70, Oxford University Press, New York. Citibank (1979) Jrinidad and Tobago Investment Guide, Litibank, ;Jew York. Corden, W. X. and J. P. ?teary (1982), "Booming Sector and De-Zaduscridlization i n a S m l l Open Economy, Economic J o u r n a l 92, December, pp. 825-848. Energy Information Administration (1983) The Petroleum Resources of Venezuela and Trinidad and Tobago, EIX, Washigtan. Gelb, A. (1982) O i l and development: the c a p i t a l importing o i l exporters i n t h e 1970s, Unpublished Working Paper, Xmeo, Washington. Gelb, A.H. (1984) "Adjustment to Windfall Gains: A Comparative Analysis of O i l Exporting Countries", Paper presented t o Conference on Adjustment t o External Shocks, F i n a f r i c a , Milan, November. Girvan, N. ( 1970) LmCs and dependent underdevelcprnec~,in yineral-export economies, S o c i a l and Economic S t u d i e s , v a l , 19, pp: +A 225%- Governnent of Trinidad and Tobago (1375) h h l t e paper on .;bz+:-*~&'4&75Y Government P r i n t e r , Port of Spain. Government of Trinidad and Tobago (1980) Accounting f o r the P e t r o d o l i a r , Covernment P r i n t e r , Port of Spain. Governnent of Trinidad and Tobago (1981) White Paper on Xatural Gas, Government P r i n t e r , Port of Spain. Governnent of Trinidad and Tobago (1982) Review of the Economy 19b2, Government P r i n t e r , Port of Spain. Government of Trinidad and Tobago (1983) Review of the Economy 19H3, - Governnent P r i n t e r , Port of Spain. IADB (1979) Fcqnomic and S o c i a l Progress i n L a t i n America, M B , -... Washington. IADB, (i9833 Economic and S o c i a l Progress i n Latin America, I-WB, Uashington. ICF (19b2) Xlaska Natural G a s Development: an Economic a s e s s m e n t of % r i n e - - System, ICF, Washington. .a 2 Karl, T. L. (1982), "The P o l i t i c a l Economy of Petrodollars: O i l and Democracy - i n Venezuela," Ph.D. Thesis, Stanford University, S t a n f o r d , - California. - - Landell :tills (1979) Landell :tills Commodity Studies: Sugar, Xemeo, Longon Lewis, Y.X. < 1950)I n d u s t r i a l development of the B r i t i s h 'Jest Zndies, Caribbean Econoalc Xeview, vol. 2, no. 1 , pp. 1-01. - Lewis, W. A . , (1972) St?-tenent t o the Second Annual Governor's Board :leeting, St. Lucl.a, L e t t e r ~ o r t hPress, 3arbados. Liscom, W.L. (1982) The Energy Decade, B a l l i n g e r , Cambridge. Lowenthal, 3. (1972) West Indian S o c i e t i e s , Oxford University Press, Oxford. Harshall S i l v a , J. (1984) "Ecuador: Q u a n t i f i c a t i o n , D i s t r i b u ~ i o nand E f f e c t s of t h e O i l %nus, 1973-82," Report f o r .RPU 672-49, World Bank, Decernber . X n i s t e r of S t a t e E n t e r p r i s e s (1982: Address t o ehe Xational 2etroleun Xanufacturing Conpany, Ytxeo, Tort of Spain, Septenber 10. X i n i s t r y of Agriculture (1983) Food and A g r i c u l t u r a l Policy, Xmeo, port of Spain. X i n i s t r y of Energy and X n e r a l Resources (1982) The Trinidad and Tobago Petroleum Industry: Yid-Year Review !982,. Ximeo, Port of Spain. --* H i n i s t r y of Petroleum (1971) X study ofa Trinidad I.2G plant, Xneo, 2 o r t of Spain. XEC (1979) .Annual Reporc of t h e !iational Energy Corporation, :.timoe, Port of Spain. hTEC (1981) ? r e s s Release: Gas-3ased Industry, :.timeo, Port or Spain, J u l y 8. Niering, !? .S. ( 1982) Trinidad: Energy Policy i n T r a n s i t i o n , Petroleun Economist, Septerber, pp. 361-363. Parsan, E.V. (1951) .An evaluation of the o r g a n t s a t i o n and development of the f e r t i l i z e r industry i n Trinidaa and Tobago, Unpublished r~.Sc., JWI, St. Augustine. Pollard, B.J. (1981a) The personal f a c t o r i n the success of a g r i c u l t u r a l development schemes, Journal of Develo?ing Areas, vol. 15, pp . 561- 584. 4 P o l l a r d , H.J. (1981b) Food Production and Trinidad's hoce market: an u n f u l f i l l e d p o t n e t i a l , Journal of Tropical Geography, vcl. 5 1. Ranpersad, F. (1981a) The r o l e of a g r i c u l t u r e i n TrinidaL's oil-producing environment, In: Jaycees (1981) Our Economy i n Tomorrow's WoFld, Jaycees, Port of Spain. w -- Ranpersad, F. (1986b) On the c o n t r i b u t i o n of the petroleun industry C B chc- nation'sweconony, Xineo, Port of Spain, October 9. Xenwick D. (1982) A f u t u r z f o r the OXR, Caribbean and Kest i n d i e s Chronicle August, pp. 12-29. Republic of TrF2idad and Tobago (1353) I n f o n a t i o n Yenorandurn f o r t h e US3110 Y i l l i o n Loan, GovermecZ ? = i n t e r , ?or= of Spain. Xichard, J.?. (1982) Z-erg2.g enerzy and cher,ical a u p l i c a t t o n s f o r xechanol: -03 3 0 r E ~ n i L i e sf o r l e v e l o ? i n s c o u n t r i e s , u o r l d hak, Xasningcon. Sandoval, J .Y. ( 1982) Scats capL:alim is a pe~roleun-bas+d economy: t h e c a s e of T r i n i d a d and Tobago, In: . ~ b u : s l e y , F. and Cohen, Y. !!383! Crisis i n