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WILD COOT: Oil vs solar energy

While I may still be disappointed about Republic Bank taking over the Barbados National Bank, I seem to recall it was offered to them on a monetary platter. Nevertheless, all decisions made with Trinidad cannot be regretted.


There was a time when fervent voices were raised right here in support of the heavenly manna of the PetroCaribe oil arrangement. Barbados took the high road and stuck to its arrangement with Trinidad.


That gentleman Niccolo Machiavelli once said: “When ills are recognised in advance (and only the prudent can do this), they are quickly cured. But when, having gone unrecognised, they are allowed to increase until everyone may recognise them, then remedy is no longer possible.” Was he also thinking of Barbados?


Part two of Mr Ronald Harford’s address to the Caribbean Bankers Association was published in the Barbados Business Authority on Monday, December 15. It contained a critical update of the future facing those Caricom territories that had opted to participate in the PetroCaribe arrangement. Every time that those countries purchased oil from Venezuela, they increased their national debt and the future liabilities of their children. Having based their economy on cheap oil, they now have to confront the possibility that the source will dry up and they will be constrained to buy on the open market and still face a huge sovereign debt.


But there is a smidgen of hope. There is a serious war going on regarding the price of oil. It has been quoted recently at US$53.68 a barrel despite the fires in Libya. Oil-producing nations are undergoing pressure to cut back on production so that the price of oil can rise. However, oil-producing nations wish to continue producing so as to keep the price falling.


They are aware of the inroads being made by solar energy producers that can make power available far cheaper with a free sun. Mark you, the solar operators are constantly reducing the installation cost, be it for household, business, motor vehicle or general everyday application. This puts increasing downward pressure on the price of oil from the oil producers.


The Wild Coot has no intimate knowledge of the oil pricing structure used by the Government of Barbados. He has no knowledge of the intimate arrangement of Trinidad and its customers for oil, but Trinidad’s oil price must reflect the going price of oil on the world market. It cannot be out of step.


Hence, at some time soon, we should see the price of gasoline, diesel and other oil products drastically reduced in Barbados, as is happening in the United States – or should we? No such thing. The finances of the Government are so precarious that it can ill afford to grant a reduction in diesel, gasoline or electricity; it wants the tax. Also, when we in Barbados mount an assault on the sun, we have limitations imposed so as to accommodate the viability of the Barbados Light & Power. Thus we will not gain the benefit of worldwide oil price reduction.


While we talk of countries taking advantage of the favourable rays of economic recovery, Barbados has been so mismanaged by political ineptitude that critical tools for recuperation cannot be applied. At the present time the model is broken. Mr Ken Hewitt’s article on Wanted: Task Force For Recovery, in which he cogently outlined the prior working model, will not come to fruition. A politician does not give up power.


So we are caught in a trap. Just when the world is restructuring, our house is not in order. The rich in the island and those foreign investors who see opportunity can take advantage of our situation.


Can we outline a solution? No! Not until we see the final extent of damage done. One banker, I believe in an effort to give us hope, surmises that the bottom has panned out. This cannot be so with the same political approach that has been a failure. Yes, we are seeing changes, but those changes merely obfuscate the situation rather than elucidate. Why not open the debate to argument?



Category/ies:Barbados Articles, Barbados News, News, Regional Articles, Regional News, Trinidad and Tobago Articles, Trinidad and Tobago News.
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