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A wake up for State enterprises

Saturday, September 1, 2018

Many Caribbean governments, faced with the same scenario as Dr Keith Rowley’s administration, have failed to make the tough decision made this week.

If truth be told, many state-owned enterprises have become a burden and have long passed the rationale for their establishment.

Many of these enterprises were a response to the call decades ago that national ownership was in our best interest. The socialists’ call for controls of the “heights of the economy” rang true at that time.

Those were times when the private sector was not ready or prepared to undertake the potential risks of ownership and operation.

Petrotrin’s history shows that the amalgamation of multiple operations was intended to benefit from economies of scale with distinct roles for each unit inherited from the multi-nationals.

But the failure of a portion of Petrotrin is reflected in the enormity of the operation and the changing circumstances of the refinery business.

Political considerations came into play over the period of realisation that the refinery portion of the company was not going to be profitable in the long run, with the prospect of several thousands severed.

It is that realisation that haunts many Caribbean governments as they must decide whether to bite the bullet and pay the price of their decision at the polls, as many remember from the National Alliance for Reconstruction administration.

Now that the decision has been made the days ahead are going to be ringing with contrasting positions.

But if we are to face up to reality, Petrotrin could turn out to be the model for tightening the operations of stateowned operations and delivering real value to the taxpayers who have seen their earnings sinking into a black hole.

This is a time for all those involved in government enterprises to realise the country no longer can absorb the kind of losses racked up by Petrotrin and other companies.

This situation is a test case that demonstrates the requirement for firm resolve to achieve a turnaround in our economic fortunes.

We are no longer the wealthiest country in the Caribbean, and the world market activities dictate the level of revenue derived.

Finally, the OWTU must face the fact that our refinery operations have for a long time not been profitable, and the long-term prospects are such that we cannot peg our debt service on an operation that lacks continued viability.

Tough as the decision will be for the workers affected, we can only hope that the board fashions a programme which will serve to cushion the effect of this week’s decision.

We hope that all avenues will be sought to not only ensure that there is a reasonable financial package to sustain the workers but that an immediate programme is launched to deal with the traumatic impact that will inevitably affect them and their families.


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