Friday, March 16, 2018

Dr. Rowley‘s Show Trial

Dr. Rowley’s cozy friendship with our Venezuelan neighbor and resident tyrant Nicolas Maduro is clearly rubbing off on him.  He’s adopted Maduro’s fondness for Conga line dancing, making rambling speeches and threatening political rivals with violence. It now appears that Dr. Rowley has also developed a taste for that favorite dish of the Maduro regime; public displays of ridiculous political propaganda. That’s because on Wednesday Dr. Rowley’s government held what it described as a “public education exercise” on the economics of the energy industry at the Hyatt Regency Hotel. Except the public wasn’t invited, and people educated in economics and the energy industry weren’t allowed to speak.

Dubbed “Spotlight on Energy”, the spectacle which was broadcast live on television contained all the hallmarks of a Russian style show trial. For six hours the leaders of the biggest foreign oil companies in T&T were made to listen to and were villainized by an insufferable panel of banal government bureaucrats and career politicians. All with the added torture of Stuart Young as MC.
Playing to the TV audience, Minister of Energy, Franklyn Khan - a multi-millionaire who made taxpayers pick up the tab for his medical bills - accused the multinationals of “not paying their fair share”. Energy consultant Tony Paul proudly proclaimed “we country, we oil”; conveniently forgetting that to extract “we” oil “we” need foreign capital and access to foreign technology; two things “we” don’t have.  Then, of course, there was Dr. Rowley himself who said that T&T was only getting the “crumbs from the table” from the energy sector and signaled that the government intended to renegotiate contracts on royalties.
You have to admire Dr. Rowley’s confidence. His government is currently struggling to operate a ferry between Trinidad and Tobago. Under his watch, state run oil refinery Petrotrin allegedly paid millions for oil it never received and there isn’t a single state enterprise that is profitable. Yet, he believes he can lecture BP and Shell about running a productive industry. Perhaps his next book should be “From Mason Hall to Delusion Village”.
There is nothing wrong with Dr. Rowley wanting to ensure that our energy sector is beneficial to as much people as possible. Also, the government has every right to negotiate with companies and get the best deal they can, but there was everything wrong with what happened on Wednesday. Call me crazy, but trying to publicly threaten and demonize foreign companies as marauding conquistadors is not the way to attract foreign direct investment.
Energy companies here already must deal with militant trade union leaders that live in a fantasy world where they are soldiers hiding in the Sierra Maestra alongside Che Guevara. When Ancel Roget arrogantly told BP to “take your platform and go”, that’s sadly what they did at the cost of hundreds of local jobs. Now BP and others must also contend with the delusions of Dr. Rowley’s government. As one prominent energy insider in attendance told me, “What the government tried to do (on Wednesday), was threaten the social right of companies to operate. It’s a risky negotiation tactic that could lead to lack of investment”.
Like his pal Maduro, Dr. Rowley appears to subscribe to the same flawed Marxist views on the economy.  As he kept reminding everyone on Wednesday, T&T’s oil and natural gas belongs to us and “we” should be benefitting as much as BP or Shell’s shareholders. The problem with that theory is that T&T’s oil has no inherent value. It’s only worth what others are willing to pay for it. And others will only pay for it providing that it can be extracted in the first place, and that requires enormous risk, capital and technical expertise. And that’s why encouraging investment from these companies is important. If you think T&T can have a profitable oil industry without these companies, ask yourself when was the last time you saw the government fix a pothole?
Creating a competitive investment climate which attracts companies, creates taxes for the state, and jobs for people should be our aim; not a pappyshow forcing people to listen to Stuart Young for six hours.
Perhaps the next time he meets Maduro, Dr. Rowley should ask him about the time Hugo Chavez increased royalties on oil companies in the name of “reclaiming Venezuelan sovereignty”. And why today, Venezuela, a country with the second largest oil reserves in the world is a place where people are hunting stray dogs for food.

No comments: