Prime Min­is­ter Kam­la Per­sad-Bisses­sar’s an­nounce­ment that the Gov­ern­ment in­tends to di­vest sev­er­al state-owned en­ter­pris­es, in­clud­ing the Hilton Trinidad, Mag­dale­na Grand Beach and Golf Re­sort, Na­tion­al Quar­ries Lim­it­ed and the La Brea In­dus­tri­al De­vel­op­ment Com­pa­ny Lim­it­ed (LABID­CO), is a wel­come sig­nal that the State is re­con­sid­er­ing its role in com­mer­cial ac­tiv­i­ty.

Trinidad and To­ba­go can no longer af­ford to tie up scarce pub­lic re­sources in en­ter­pris­es that pri­vate op­er­a­tors may be bet­ter equipped to man­age. Mon­ey used to sus­tain un­der­per­form­ing busi­ness­es is un­avail­able for health­care, ed­u­ca­tion, in­fra­struc­ture and oth­er in­vest­ments that can strength­en the pro­duc­tive econ­o­my.

Pri­vate op­er­a­tors can bring fresh fi­nanc­ing, spe­cialised ex­per­tise and stronger in­cen­tives to im­prove pro­duc­tiv­i­ty, ex­pand mar­kets and cre­ate jobs. Suc­cess­ful di­vest­ment could al­so re­duce the risk of tax­pay­er-fund­ed bailouts and al­low the Gov­ern­ment to con­cen­trate on its core re­spon­si­bil­i­ties.

But pri­vate own­er­ship does not au­to­mat­i­cal­ly guar­an­tee bet­ter re­sults.

Sell­ing a pub­lic as­set gen­er­ates one-off rev­enue; it does not, by it­self, cre­ate sus­tain­able growth. Poor­ly ne­go­ti­at­ed trans­ac­tions could de­prive the coun­try of fu­ture in­come or sur­ren­der valu­able as­sets be­low their true worth. The ob­jec­tive must there­fore be not sim­ply a sale, but demon­stra­ble long-term eco­nom­ic ben­e­fit.

Di­vest­ment should form part of a co­her­ent eco­nom­ic strat­e­gy, in­clud­ing a com­pre­hen­sive eval­u­a­tion of State as­sets, whether prof­itable, loss-mak­ing or con­sid­ered to be strate­gic.

In tourism, new in­vest­ment in the Hilton and Mag­dale­na prop­er­ties could im­prove ac­com­mo­da­tion, ser­vice stan­dards and mar­ket­ing, help­ing to at­tract vis­i­tors, gen­er­ate for­eign ex­change and sup­port busi­ness­es across the tourism val­ue chain.

The case is par­tic­u­lar­ly im­por­tant for To­ba­go, where im­proved air ac­cess through the ANR Robin­son In­ter­na­tion­al Air­port must be matched by ad­e­quate ac­com­mo­da­tion and tourism ser­vices. The Mag­dale­na should con­tribute mean­ing­ful­ly to that ef­fort rather than re­main a bur­den on tax­pay­ers.

Sim­i­lar­ly, a more ef­fi­cient­ly op­er­at­ed Na­tion­al Quar­ries could sup­port con­struc­tion and in­fra­struc­ture de­vel­op­ment through re­li­able ag­gre­gate sup­plies and im­proved pro­duc­tiv­i­ty, while LABID­CO could at­tract in­vest­ment that ex­pands in­dus­tri­al ac­tiv­i­ty and em­ploy­ment.

How­ev­er, each trans­ac­tion must be judged by its con­tri­bu­tion to the pro­duc­tive econ­o­my, not sim­ply the sale price.

Cru­cial­ly, di­vest­ment must not be­come an av­enue for po­lit­i­cal pa­tron­age or the trans­fer of pub­lic as­sets to favoured in­ter­ests at bar­gain prices. Gov­ern­ment must en­sure that its pro­gramme does not pro­vide op­por­tu­ni­ties for a priv­i­leged few to ac­quire pub­lic wealth on favourable terms.

In­de­pen­dent val­u­a­tions, open com­pet­i­tive ten­der­ing, pub­lished se­lec­tion cri­te­ria and rig­or­ous over­sight must there­fore be non-ne­go­tiable. Suc­cess­ful bid­ders should be se­lect­ed on mer­it, fi­nan­cial ca­pac­i­ty and cred­i­ble de­vel­op­ment plans, with mea­sur­able in­vest­ment com­mit­ments that can be en­forced.

The Gov­ern­ment must not mis­take the dis­pos­al of as­sets for eco­nom­ic re­form. With­out trans­paren­cy, prop­er val­u­a­tion and en­force­able com­mit­ments, di­vest­ment risks re­plac­ing state-sec­tor in­ef­fi­cien­cy with pri­vate-sec­tor priv­i­lege.

Ul­ti­mate­ly, every sale must de­liv­er tan­gi­ble ben­e­fits for T&T. Any­thing less would leave tax­pay­ers car­ry­ing the cost while oth­ers reap the re­wards.