During the immediate post-colonial era, at the height of the Cold War, various developing countries experimented with the notion of nationalization. The nation’s most valuable and demanded resources and/or utilities were either partly or wholly nationalized. In some cases, the state became the exclusive controller, with such a monopoly, justified as being in the interest of ensuring access and benefits for the people. In other cases, usually with minerals or oil, state owned companies would exist alongside their private counterparts. While still a popular strategy in some circles, the concept of nationalization has waned in modern times, largely seen as a liability by investors and something heavily discouraged by economic organizations and institutions.
With the gradual collapse of South America’s ‘socialist experiment’ this view has solidified even more as countries like Brazil, Peru and Bolivia are now looking past their scandal and debt ridden state owned industries towards a more free market, capitalistic model. Venezuela perhaps stands as the lone exception to this paradigm shift, stubbornly clinging to its nationalized energy sector, food, utilities and even media despite dangerous levels of dissent, unrest and economic chaos. With its recent expulsion from Mercosur as a result of waning democratic institutions and a failure to meet its economic obligations, some have even taken to citing the Bolivarian republic as the poster child for why such overtures are a generally poor idea.
Shifting focus to Venezuela’s twin island neighbour, Trinidad and Tobago also finds itself in a dilemma regarding its various state-run establishments ranging from utilities to its national airline (CAL) and even Petrotrin, its state run energy company. According to some recent media reports, the malaise of poor management, corruption and fiscal inefficiency seems to be the unholy trinity of virtually every state-owned company with the repercussions ranging from abysmal productivity to staggering debt and operating costs. During more prosperous times such issues existed but rarely ever received firm action however, with reduced revenue from lower oil prices, the twin island republic finds itself in a similar but ultimately far less severe predicament to its mainland neighbour.
Interestingly enough, this ‘unholy trinity’ has historically been the state-run company’s greatest threat, not just in T&T but around the world. With little incentive to profit, innovate, take risks or go beyond meeting a general status quo, the national purse and by extension the taxpayer tends to feel the brunt of these ailments, more so when such a company controls a monopoly on a resource and generally delivers a lacking or underwhelming service. As a result, T&T now finds itself with various indebted state-run companies, looming layoffs for those like electricity provider T&TEC and frequent discussions of privatization for others like Petrotrin. Unless economic odds vastly improve in due course, the latter option may soon come to pass.
That said, perhaps it is indeed time for the fascination with nationalization to be retired or at least downscaled. Having been historically incriminated alongside numerous cases of debt, borrowing and economic slumps, a changed vision may be necessary for the modern era.