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Raffique Shah


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Boom to bust...and we learned little

December 11, 2005
By Raffique Shah

FEW among us today, mostly those 40 years and older, will recall how the first oil boom impacted on the society. Before 1973 and the advent of Libya's Muammar Gadaffi as the strongest spokesman for oil-exporting countries, the great guzzlers of energy to the North paid us a paltry US$2 a barrel. That is hard to imagine today, but it is a fact. Gadaffi led OPEC to the dominant position it holds today by insisting that oil exporters be paid more for this all-important product that drove the industrial engine that was The North-from the USA and Canada to Europe and Japan. Trinidad and Tobago, a minute player in the scheme of things, enjoyed immense benefits from this windfall that lasted close to 10 years.

It was a period, much like today, when the Government of the day saw revenues it had never imagined coming into the coffers. To say that the country did not benefit from it is not correct. Massive highway projects were undertaken. Scores of modern secondary schools were built, manufacturing took a quantum leap, housing projects, both private and government, sprung up like wild mushrooms. And motor cars! In a short time, thousands of vehicles were added to make us the Caribbean country with the most vehicles per capita.

But there was also the negative side to the windfall, which impacted on us much the way winning the Lotto does to some silly-but-lucky-people. We learned how to blow money. Many in the middle-to-upper class bought or built houses that were well, palaces. At Carnival fetes, rum was replaced by the most expensive whisky. It was during that boom, with so much money flowing through the country, that "blue notes" ($100 bills) made their first appearance. Most people-there were those who were marginalised, who never saw any benefits from it-engaged in a spending orgy that was reminiscent of the Romans when their empire straddled the known world.

Then the crash came, sometime around 1981. Those who had tied themselves into mortgages that were beyond their means literally abandoned their houses. Many "palaces" sold for a song as the "oil-i-garchy" found itself stranded, penniless by comparison with what it enjoyed during the period of plenty. Finance houses that rode high during the boom crashed to earth with disastrous consequences for those who had invested money in them, and in instances, to those who were deemed "financial wizards". Oh, how the powerfully stupid had fallen!

It is also true that, even as more than half the population bathed in Roman baths, the other half saw little, if any, of the wealth that flowed through the country "like a dose of (Epsom) salts", to quote the late Michael Manley. The masses, by and large, remained out of the money-loop. That led the Black Stalin to sing one of his classics, "Run Something". Later, the Mighty Sparrow would join in with "Capitalism Gone Mad", an exceptional calypso that told of the good times that had passed us by.

Today we are in a similar position, and it seems we have learnt little from that disastrous episode in the country's history. In the case of government, while I agree with Cabinet that the city of Port of Spain needs to be thoroughly rehabilitated, I think they should start with the streets and sidewalks, many of which look like something out of the 18th century. The Government should focus on finding a permanent solution to the vagrancy problem. It should have derelict structures demolished and replaced by new ones. But we do not need "skyscrapers" to prove anything to anyone! What's the use of having 50-storey structures to impress foreigners when vagrants make their homes at the base of such buildings?

But if the Government is caught up in the wild spending spree that has gripped the country, what of individuals who may find themselves well-heeled today, but uncertain of what tomorrow may bring? It is no accident that close to 30,000 new or foreign-used vehicles are being registered every year. It is also no fluke that upscale restaurants, pubs and bars can be found just about everywhere. There are people who will pay $20 for a beer, just to be seen at these establishments. Forget the regular bars or restaurants or even the village groceries. Everyone now shops at establishments where they know prices are higher.

If we who were around learned anything from the "bust" that followed the first oil boom, it is that you use whatever comes to you wisely, that you save for the rainy day that is sure to follow. How and where you save or even better, invest, is something people need to be advised about. But if we don't, and signs are that a wild spending spree is underway, we are destined to pay a heavy price when the country's economic fortunes change.

(PT I)