By GREGORY McGUIRE
Without the solid infrastructure of transportation, electricity, telecommunications and water , the potential for human and economic development of a town, region or country will be less than optimal, if not stifled outright. Nowhere is this in greater evidence than in the Trinidad counties of St. Patrick, St. David and Mayaro, and in Tobago. It is therefore disingenuous, to say the least, when those who should know better, opt to play political football with projects that are designed to realize the dormant potential of Trinidad and Tobago’s so-called “rural” communities in Trinidad and Tobago. I use the word “rural” cautiously because it is myopic to speak of rural and urban in this 5128 sq. km. island, which is smaller than the city of Chicago or Atlanta.
Over the last several weeks, there has been a rising tide of resentment against the highway to Point Fortin. Critics come from different interest groups and perspectives but are united, to my mind, by the bias, ignorance and arrogance of a north Trinidad, urban-centric mindset. Some objectors have challenged the cost, socio -economic benefits, governance arrangements and prioritization of this project. For one critic the Government was building a highway to serve 40,000 people while leaving an estimated 400,000 to suffer in the North Western peninsula. The critic fails to recognize that for over 100 years, St. Patrick and Mayaro counties and their adjoining marine areas have been, and continue to be the main source of Trinidad and Tobago’s wealth. Surely, if anyone should be complaining about uneven distribution of national hydrocarbon wealth, it should be the people in these communities! Ironically, a former PNM Minister has now referred to the project as the “Highway to nowhere” on the grounds that since the PP Government had scrapped the aluminium smelter, there was no longer need for a highway to Point Fortin. Such comments are rooted in barren political soil and evince the spokesman’s ignorance of his own party’s history. The Highway to Point Fortin was a promise made by the PNM’s first leader, Dr. Eric Williams, in the 1962 Budget speech, long before conception of the still-born aluminum smelter.
Before proceeding further, however, let me declare my various interests:
As someone who still considers Guapo, Point Fortin as “home”, I have a keen interest in seeing the initiation and completion of this project.
As an economist, I am drawn by the potential of infrastructural development as a necessary and conducive condition to economic development.
As an energy economist, I am committed to the quest to create effectives linkages between the offshore and onshore sector in promoting economic diversification through development of the non-energy domestic and indigenous sector.
As a national, I stand for equity in the distribution of national patrimony.
So there! Full disclosure.
Mindful that these criticisms are likely to escalate in the upcoming post-budget debate, it is useful to provide an objective framework for assessing this highway and similar infrastructure projects. Economic theory recognizes the importance of infrastructure in economic development. In neo-classical economics, new road infrastructure is acknowledged as an input in the production process, an enhancer to increase productivity of other factors including labour. Location theory sees infrastructure as a necessary though not sufficient condition for local economic growth and development. Roads infrastructure is an acknowledged catalyst for economic development. The contribution of the US Interstate Highway System (now called the Dwight Eisenhower National System of Interstate and Defense Highways) to broad-based economic development in the USA is well documented. In a more recent study (2004), the US Department of Transportation showed that access to interstate highway interchanges contributed significantly to earnings growth in rural areas. An important lesson to learn from this is the need for a national consensus on the National Highways Network infrastructure development plan in Trinidad and Tobago. Projects of this nature span different administrations and are too important to be stymied by short term narrow political interest.
It is undeniable that infrastructure development costs more per job generated in rural areas than in urban areas because of lack of economies of scale. However, conversations about these projects seldom cover the range of other macro and micro parameters that constitute a full socio-economic cost/benefit analysis. The Point Fortin Highway project provides a good case study for the application of a broader spectrum of parameters in assessing such projects. These include economic, social, environmental and governance factors.
Economic benefits of the highway projects are both short and long term The short term benefits are the direct and indirect jobs and income multiplier, created by the spend on the project . To that end, it is imperative that the Government ensures that such projects have an appropriate local content stipulation. The higher the local content is, the greater will be the income multiplier and the contribution to GDP. However, it is the longer term economic and social impacts that are often missed or ignored. A new road network provides more efficient transportation for both commodities and people, connecting business to suppliers and consumers and stimulating new business activity. Chaguanas is one community that has benefited tremendously from its easy access to main highways.
The Point Fortin region already makes a significant contribution to the economy although Atlantic LNG is a virtual enclave. As more economic activity comes to the La Brea and Union industrial estates a critical mass of industrial activity will create the demand sufficient to draw new business to the region. The new highway also opens up the market for both international and local tourism. For example, while we boast of the La Brea pitch lake being a wonder of the world, the percentage of the national population visiting the Lake remains embarrassingly small. The same can be said of the Devil’s Woodyard in Princes Town or the Company Villages in Moruga, which will benefit from a highway to Mayaro.
The Highway project also positively impacts on prospects for agriculture and fisheries – important sectors in the economic life of the Cedros and Icacos communities. The new infrastructure will likely see an increase in property values which not only benefits the Government in terms of its tax revenue but also enhances the wealth on small and large property owners.
A key element that transcends both economic and social spheres is the impact of the highway on internal migration patterns. Trinidad has seen a steady increase in urbanization and its attendant problems over the last thirty five years. The authorities have accepted this as the normal outcome of the development process. Physical infrastructure development initiatives, including planned highways, causeways and rapid rail have been geared to supporting the urbanization process. But it need not be so. A major driver for urbanization is simply that people can’t easily commute from their rural homes to their city jobs. They therefore seek to purchase or rent accommodation in the East-West corridor and Chaguanas, putting strain on the social and economic infrastructure in these areas. As the more educated and skilled migrate, communities are left bereft of leadership , exemplars and high income earners. Implementation of a National Highways system along with a policy of decentralization appears to be a more viable solution to this urban drift and its evils. Moreover, as less people migrate out of these communities tremendous social benefits are derived. These include the presence of thought leaders, mentors, role models, organizers and entrepreneurs who can contribute to the general improvement in the quality of representation and life in these communities. The improvement in economic conditions lowers unemployment rates and levels of social deprivation.
It would be foolhardy to assume that major infrastructure projects can be implemented on the basis of strong socio-economic benefits without considering the risks. Given Trinidad and Tobago’s recent experiences with mega projects, it is not surprising that the announcement that the capital outlay of TT$7 billion for the Point Fortin Highway has triggered alarm bells. There is need for a governance policy and framework for monitoring spending on such large projects. Questions are already been raised about the budgeted amounts for land acquisition. The Prime Minister’s appointment of an inter-ministerial oversight committee is a move in the right direction but we have been that way often enough to know that it is not nearly enough. Independent monitoring is a required condition. If we fail to do so, the touted socio- economic benefits could easily evaporate over a hot bed of corruption. If that happens, then we’ll surely be on the highway to nowhere.