Economy
From The Report: Trinidad & Tobago 2016
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At first glance, the newly elected government of Trinidad and Tobago faces a formidable first year, marked by one of the deepest slumps in energy prices seen in recent decades. According to provisional data by the Central Bank of T&T, the twin-island economy contracted by 2.1% in 2015, with GDP down 3% year-on-year in the fourth quarter of the year, reflecting a 5% contraction in the energy sector and a combined 1.8% decline in non-energy sectors. Meanwhile, government revenue fell by 6.2% in FY 2014/15, with a 35% decline in energy collections outstripping increases in non-energy and capital receipts. As a result, authorities have embarked on a programme of fiscal austerity and are ramping up efforts to diversify the TT$175.99bn ($27.1bn) economy. According to IMF projections, GDP growth is expected to resume in 2017, but not before an estimated contraction of 1.1% in 2016.

This chapter contains interviews with Paula Gopee-Scoon, Minister of Trade and Industry; Jorge Familiar, Vice-President for Latin America and the Caribbean, World Bank; and Gervase Warner, President and Group CEO, Massy Holdings; as well as a viewpoint from Jeffrey Sachs, Director, the Earth Institute at Columbia University.

Articles from this Chapter

Overview

Adjusting policy: Although lower energy revenues have impacted public finances, the country benefits from a number of safety buffers
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At first glance, the newly elected government of Trinidad and Tobago, which took office in September 2015, faces a formidable first year, marked by one of the deepest slumps in energy prices seen in recent decades. This has pushed the economy into recession and forced the authorities to embark on a difficult programme of fiscal austerity. However, the crisis is not without opportunity for the country’s new leadership and may also be the moment for new policies aimed at economic diversification…

Analysis

Steps to change: The government’s fiscal policy introduces measures to cut public spending and increase revenue collection
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In late 2015 and early 2016 the newly elected government of Trinidad and Tobago took three major steps to set the policy for FY 2015/16 – which ends on September 30, 2016 – and immediately beyond it. The first of these was the budget announced by the new administration on October 5, 2015, only a few weeks after it had taken office. The second came in December of the same year, when Keith Rowley, the new prime minister, made some key announcements about the intended use of foreign currency reserves…

Interview

Trade appeal: OBG talks to Paula Gopee-Scoon, Minister of Trade and Industry
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Interview:Paula Gopee-Scoon What is the potential for the creation of new industrial clusters in Trinidad & Tobago? PAULA GOPEE-SCOON: In addition to the Point Lisas petrochemical cluster, our economic history has also seen the creation of the largest manufacturing sector in the region. The sector contribution to GDP averages 8% and accounts for approximately 55,000 jobs. Many of our manufacturers are net foreign exchange earners running sophisticated operations. We see immediate room…

Interview

Managing diversity: OBG talks to Jorge Familiar, Vice-President for Latin America and the Caribbean, World Bank
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Interview:Jorge Familiar How can Trinidad and Tobago improve its ranking for ease of doing business? JORGE FAMILIAR: T&T has shown great leadership in improving its business climate in recent years. The Doing Business 2015 report featured the Caribbean country among the top 10 improvers worldwide. Among its key achievements, T&T succeeded in making insolvency resolution easier by introducing a new restructuring proceeding. It also strengthened the rights of secured creditors during…

Analysis

Economic backbone: Initiatives help secure funding and opportunities for small and medium-sized enterprises
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Contributing a significant percentage to GDP and providing work for a large part of the workforce, small and medium-sized enterprises (SMEs) comprise a vital part of the Trinidad and Tobago economy. According to the T&T Chamber of Industry and Commerce (TTCIC), there were more than 20,000 SMEs operating in the country as of 2011 – the latest year for which data is available – employing around 200,000 staff and representing approximately 30% of the nation’s GDP. A small enterprise in T&T…

Interview

Enacting key reforms: OBG talks to Gervase Warner, President and Group CEO, Massy Holdings
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Interview:Gervase Warner In what ways is the drop in oil and gas prices impacting non-energy industries? GERVASE WARNER: In Trinidad and Tobago the fortunes of oil and gas, government spending and the overall economy are all correlated. Successive governments have so far run significant deficits, financed by borrowing and some state enterprise initial public offering. The energy sector slowdown has still not significantly impacted government spending. The 2016 budget was larger than the 2015…

Viewpoint

Energy transfer: Jeffrey Sachs, Director, the Earth Institute at Columbia University, on the global energy market and climate change
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There is no doubt 2016 is going to be a difficult year for energy exporters, including Trinidad and Tobago. Inflation-adjusted oil prices have experienced a lot of volatility over the last 70 years; however, the recent decline was relentless, unpredicted and to some extent unpredictable. There is a future, but one has to think strategically about how to get there. The market is volatile because, at least in the short term, both supply and demand are relatively elastic, which means that small changes…

Analysis

Aiming for revival: Targeting a reduction in costly food imports and bolstering the development of agricultural products with high value added
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While the agriculture sector of Trinidad and Tobago has experienced a steady decline in recent decades, the government is looking to reinvigorate growth, with a focus on value-added and niche products. More than a century ago, sugar cane cultivation was the economy’s dominant economic activity, but sugar production has declined, and much of the old plantation land has been redistributed. Agriculture represented 4.2% of GDP in 1984, according to the Ministry of Agriculture, Land and Marine Resources,…