Maroc - NEWSDAY.CO.TT - A la Une - 23/Dec 03:24

When private sector becomes government client

THE EDITOR: The private sector in TT likes to describe itself as a partner in national development. In reality, it has become something far less credible: a long-term client of the state. This is not a rhetorical flourish. It is a structural condition that has been normalised over time. Increasingly, private sector performance is shaped less by innovation, productivity, and market expansion, and more by government spending, incentives, protection, and access. When the state tightens, business confidence collapses. When the state spends, growth briefly returns. That dependency alone should tell us something is deeply wrong. A genuine private sector leads. It anticipates demand, invests ahead of policy, and competes beyond domestic borders. It innovates not because it is encouraged to do so, but because survival depends on it. That is not the dominant behaviour we see today. Instead, many firms organise their strategies around public procurement cycles, tax concessions, import protection, and regulatory shelter. Lobbying has become a substitute for innovation. Compliance has replaced creativity. Risk-taking is postponed indefinitely because returns can be secured through alignment rather than performance. The result is a business culture that is cautious, inward-looking, and comfortable with mediocrity. This dependency is visible across sectors. In construction and infrastructure, business activity rises and falls almost entirely with government capital expenditure. In energy services, diversification is repeatedly discussed but rarely pursued beyond what the state finances or guarantees. In finance, product innovation remains shallow, with limited focus on funding productive enterprise or new industries. In retail and distribution, protected domestic markets and import dependence dominate, while regional expansion remains the exception rather than the rule. Meanwhile, research and development spending is minimal. Export capacity remains weak. Productivity growth is stagnant. Technology adoption lags global standards. These are not abstract indicators; they are the direct consequences of a private sector that has chosen insulation over innovation. What makes this situation particularly damaging is that it is self-reinforcing. A client-style private sector benefits from inefficiency, opacity, and policy inconsistency – because navigating those weaknesses becomes a competitive advantage. Firms that master access outperform firms that invest in capability. Over time, ambition is punished and conformity rewarded. Young and innovative businesses feel this most acutely. Without political access, legacy scale, or balance-sheet leverage, they struggle to compete in an environment where success depends on proximity to the state. Many either stagnate, relocate, or never start at all. The economy loses dynamism, and the illusion of stability replaces genuine growth. It is important to be clear: government policy has enabled this dependency. But the private sector has embraced it. No one forced businesses to abandon export ambition. No one compelled them to underinvest in technology or skills. No one required them to accept protection instead of competing. Dependency is a choice. A serious private sector does not ask the state to shield it indefinitely from competition. It asks for functional institutions, predictable rules, and efficient infrastructure – and then competes aggressively, including beyond national borders. It understands that discomfort is the price of progress. In TT, however, discomfort is avoided. When conditions tighten, the first response is not restructuring or innovation, but appeals for relief. When global competition intensifies, the answer is often protection rather than adaptation. When productivity stalls, the blame is externalised. This is not how economies transform. A private sector that cannot function without the state’s spending, guarantees, and protection cannot lead diversification, cannot anchor resilience, and cannot credibly claim to be a development partner. At best, it manages decline. At worst, it entrenches it. If TT is serious about economic transformation, the private sector must confront an uncomfortable truth: it has become part of the problem. Reclaiming relevance will require a deliberate break from dependency – towards exports, technology, skills investment, regional integration, and genuine competition. That shift will involve failure, consolidation, and discomfort. But without it no amount of policy reform will deliver sustainable growth. A client does not lead. And until the private sector chooses independence over access, it will remain exactly that. DR FUAD KHAN via e-mail The post When private sector becomes government client appeared first on Trinidad and Tobago Newsday.