Published Thursday 25th October, 2007
Last week we
reflected on the generally low level of economic and financial literacy
in our country. Given our aspirations, it is imperative that those
shortcomings are urgently addressed.
To put all this into
context, we need to cultivate the habit of making reasoned decisions
after studying the options and implications. Despite recent high levels
of national income, we need to understand that those are largely
windfall earnings and therefore we are enjoying a period of temporary
advantage. If we fail to place the moment in proper context there is a
real danger that we miss the opportunities. Indeed, it is probable that
we will create significant liabilities for future generations.
note, the controversial New Piarco Terminal is said to have cost some
$1.6 billion. The current wave of State office buildings in the capital
is costing at least $5.0 billion.
The issue being
addressed this week is the national long-term consequences of
“illiterate” leaders who either don’t know or don’t care. There is a
huge, wasteful and corrosive boom in office construction in our capital.
We detailed earlier in the series that some 2.3 million sq ft of State
offices are now under construction.
At a break-even rent
of $25 a sq ft, that equates to an annual bill for these new offices of
at least $700 million. Please note that this does not include
As set out in the
sidebar, we can see that the public statements on this matter by the
Minister of Planning & Development and the Prime Minister are
misleading, to say the least. They emphasise the minor consequences of
the State’s office building programme and are silent on the deeper
long-term implications. That could only occur in a country with low
levels of economic and financial literacy.
No leader in a
serious country would even consider making such a series of statements,
other than as part of general political humour. We are not serious and
the continuance of this attitude makes us all into a laughing stock.
For those who might
think that this criticism is directed only at the party in power, please
note that the Opposition is just as clueless, as shown by their silence
on the subject. There are no signs that they would have done any
differently. We also need to pause and consider the wider professional
responsibility in society beyond the politicians and civil servants.
What are we saying
I prefer not to start
with the cynical notion that our Prime Minister knows about this and
does not care. Let us instead assume that he is being poorly advised
since that might be more meaningful an avenue to pursue. To what extent
were these issues studied before the projects were started? Was a
comprehensive feasibility study done? If it was, we surely deserve to
have that published without further delay. If not, one can only ask why,
since there are people in the relevant positions of responsibility who
fully well know what is required.
We conclude by
returning to two earlier themes.
transient nature of our national wealth with the imperative that we
therefore do our very best with it. It is our responsibility to make
investments with today’s windfall that will generate foreign exchange
and employment into the future.
It seems that, as far
as our capital is concerned, we are now obliged to pay huge annual sums
to lenders for these buildings. The curious reader will be asking
whether in fact our political leaders knew all this or were they
tricked? Which leads us to the second point.
Even taking the “good
faith” assumption that the Prime Minister relied on his advisers and
having proper respect for that office, we can say that he now knows.
So what next?
Can we take actions
now to rescue this situation or at least prevent a recurrence. Do we
have the capacity to learn from our mistakes and start becoming a
learning, listening, reflective and mature society? That would be real
Afra Raymond is a
director of Raymond & Pierre Limited. Feedback can be directed to email@example.com.