Pitfalls Wise Governments Should Avoid.

First Published: 2004-06-19

Strategically, a viable modern nation needs redundant (i.e., multiple and competitive) transportation, communications, and energy infrastructures in order to ensure both national survival and economic growth. A vibrant national energy policy that supports a growing number of commercial energy suppliers and fuel alternatives is critical for any nation's future.

Recent indications towards nationalization of fuels distribution in The Bahamas would lead to severe economic crises in the future as the nation's energy supplies become politicized and eventually subverted by public sector inefficiencies.

Today, the global markets have moved the price of fuels higher, but these same market forces will compete to bring the prices back down as new supplies are developed and enter the market (this is already happening). In fact, the biggest threat and bottleneck to the global fuels supply comes from the shrinking refinery capacity worldwide, especially in the Western Hemisphere.

The Government should resist the temptation to interfere in the global market: it will only lead to even higher prices. With few exceptions (none that I can think of) governments that compete with the private sector by acquiring and operating commercial services consistently fail.

Entering into failing propositions is a pitfall that all wise governments should avoid.

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