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Dear Editor,
The Central Bank’s July 2024 Economic Bulletin reveals a troubling economic picture for Trinidad and Tobago, with significant issues in the energy sector, rising unemployment, a shrinking labour force, and a growing fiscal deficit.
While these challenges are concerning, even more alarming is the government’s persistent failure to address these problems with forward-thinking policies. Under the Rowley administration, there has been a distinct inability to move from rhetoric to meaningful action to shift the country towards sustainable growth.
At the core of the economic challenges is the over-reliance on the energy sector. The Bulletin shows a 10.3% year-on-year decline in energy output for the third quarter of 2023. This decline is the result of years of underinvestment in exploration and infrastructure, coupled with a lack of long-term strategic planning. The government’s failure to attract new upstream investments has left T&T stagnating, while other energy-exporting nations in the region have adapted to the evolving market and diversified their economies.
Despite ongoing promises of diversification, particularly in the non-energy sector, growth remains weak. The non-energy sector saw only a 1.3% increase during the same period. This sluggish performance demonstrates that the policies introduced thus far have been ineffective. The private sector, receiving insufficient support from the government, has struggled to grow, particularly in industries like manufacturing, agriculture, and digital services. A forward-looking policy that encourages innovation and investment is sorely needed, but the current administration continues to rely on outdated methods that fail to address modern economic challenges.
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The worsening labour market is another critical concern highlighted by the Bulletin. The unemployment rate rose to 5.4% in the first quarter of 2024, with youth unemployment surging to 19.2%. This surge directly reflects the administration’s failure to create opportunities for the younger generation. Without substantial investments in education, vocational training, and job creation in emerging sectors, young people are being left behind. Many may seek opportunities abroad, exacerbating the brain drain that is already a significant issue for the country. The government’s lack of youth-targeted employment programs represents a missed opportunity that could have significant long-term consequences.
Compounding the employment issue is the absence of support for small and medium-sized enterprises (SMEs), a sector recognized globally as an engine for job creation. Entrepreneurs face numerous barriers in Trinidad and Tobago, including bureaucratic red tape and limited access to financing. Instead of focusing on short-term political gains, the government should promote long-term strategies to foster entrepreneurship and innovation. However, there is no clear vision to support this critical sector, leaving businesses uncertain and hesitant to invest.
The administration’s fiscal mismanagement is another significant concern. The Bulletin notes a $4.3 billion deficit for the first nine months of the fiscal year 2023/24, driven primarily by declining energy revenues. Despite repeated warnings, the government has yet to implement necessary tax reforms, such as the long-delayed property tax system. This hesitation has led to increased borrowing, pushing public debt to unsustainable levels. The government’s failure to address the fiscal deficit with structural reforms leaves Trinidad and Tobago vulnerable to financial instability.
Furthermore, the country has failed to attract meaningful foreign direct investment (FDI). While other Caribbean nations have improved their business environments and positioned themselves as attractive investment destinations, Trinidad and Tobago lags behind. There is no clear policy to entice investors into high-growth sectors such as renewable energy, technology, and advanced manufacturing. Instead, the country remains dependent on the energy sector, missing out on opportunities to modernize and diversify its economy.
The government’s inaction in developing the digital economy is another missed opportunity. The Covid-19 pandemic highlighted the importance of a strong digital infrastructure, yet the administration has been slow to act. Expanding broadband access, modernizing government services, and incentivizing tech startups should have been key priorities. However, the Rowley administration’s lack of urgency in embracing digital transformation has left the country behind, as the global economy increasingly relies on technological advancements.
The rising cost of living further underscores the government’s inaction. Although overall inflation remains low at 0.7%, food prices continue to rise, disproportionately impacting vulnerable populations. The administration has done little to reduce the country’s dependence on imported food, and outdated agricultural policies continue to hold back the sector’s potential. With the right support, T&T could develop a thriving agricultural industry, but government negligence has left this opportunity largely untapped.
The Central Bank’s July 2024 Economic Bulletin exposes the systemic issues plaguing T&T’s economy, highlighting the Rowley administration’s failure to address them. From the energy sector’s decline to rising unemployment and fiscal mismanagement, the lack of effective long-term policies is evident. The administration’s reactive approach to economic challenges leaves T&T ill-prepared to compete in the global arena.
T&T is at a critical juncture. Bold leadership and decisive action are needed to implement structural reforms, diversify the economy, and create a sustainable future. The time for empty promises and short-term solutions has long passed. The country needs a government committed to enacting real change, one that can lead it toward a more prosperous and resilient future.
Rushton Paray
MP for Mayaro
