Monday, July 16 2012

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MANAGING THE REVENUE: Richard Auty (second from left), Professor Emeritus of Economic Geography at Lancaster University, makes a point at the Revenue ...

Energy company BP Trinidad and Tobago has partnered with the University of the West Indies (UWI), St. Augustine Campus, to identify measures and techniques to improve revenue management practices in the oil and gas-driven economy of Trinidad and Tobago.

BPTT, which is the largest individual contributor to national income, was the sole sponsor of a three-day conference on Revenue Management in Hydrocarbon Economies, organised by the Trade and Economic Development Unit, a research cluster in the Department of Economics, UWI.

The conference, held at the Hyatt Regency Hotel, Port-of-Spain, attracted several leading economic thinkers in the world, as well as prominent persons in the local financial and energy sectors.

At the formal opening ceremony, Minister of Planning and the Economy, Dr. Bhoendradatt Tewarie, told delegates that recommendations arrived at during their deliberations “might dovetail” into policy decisions of the Government.

“Your conference is very timely on the important topic of revenue management. We face a challenge in Trinidad and Tobago on the revenue side and on the expenditure side. Policy decisions are critical in deciding trends as we plan for next year,” the minister said.

Giving a breakdown of expenditure patterns in Trinidad and Tobago for 2011/2012, Dr. Tewarie disclosed that a high 53 percent was spent on social support and subsidies, with 30 percent on the service sectors (including housing, education, health, as well as small and micro-enterprise development). Nine per cent went to economic services (such as energy, agriculture and transport), while public services (including national security) accounted for eight percent of Government spending.

On the revenue side, Minister Tewarie said that Government’s share of revenue from the energy sector reached 55 percent in 2007/2008, dropped to 49.5 per cent in 2009 and climbed to 57.5 per cent in 2011. He noted that Government has been operating without the collection of property taxes which accounted for $82 million in 2007 and pointed out that “a major restructuring of other businesses is needed to occupy a small space of the energy sector”.

Dr. Tewarie lamented that the level of productivity in Trinidad and Tobago was way below what was required of a developing country, adding that the competitiveness of the country also left a lot to be desired.

Norman Christie, Regional President, BP Trinidad and Tobago, said the conference was “time as well as fortuitous because bpTT and several other major companies are, at this time, actively preparing to explore deep waters around this country for new resources of oil and gas which have been the lifeblood of Trinidad and Tobago since the beginning of the last century”.

“How well or how poorly we have utilised the revenue from our petroleum resources will continue to be the subject of debate for some time. While this may be discussed during the course of this conference, this is not the principal purpose of the conference. I believe that what this conference is hoping to achieve is the development of a GPS-like instrument to guide us to a sustainably prosperous economic future for Trinidad and Tobago,” Christie said.

Christie gave the assurance bpTT was fully committed to the long-term success of Trinidad and Tobago, despite current challenges facing natural gas businesses due to depressed natural gas prices and escalating costs.

Main presenter at the conference was Richard Auty, Professor Emeritus of Economic Geography at Lancaster University. Prof. Auty has advised many multi- and bilateral agencies on economic development issues, including the World Bank, UNCTAD, the US State Department and the Royal Institute for International Affairs. He is the author of several books and publications on resource-driven development and the political economy of economic development.