PUTTING COUNTRY FIRST

Meanwhile, even as Trinidad and Tobago does this it should seek to develop and implement strategies to prolong the availability of the country’s crude oil and natural gas deposits through effectively limiting the volume of the country’s crude and gas which can be exploited in any given year. In turn, Government should accelerate plans for Trinidad and Tobago to be made the financial centre of the Caribbean, including northernmost South American States. The minister of finance can begin by introducing financial measures aimed at facilitating potential investors accessing needed capital. These would lead to, in the short and medium term, the Central Bank, for example, putting in place mechanisms leading to a decline in the cost of capital.

Meanwhile, the finance minister has not only, for the past several years, embarked on a policy of a low corporation tax structure, but has, from this year, in addition to already low personal income taxes, increased the annual tax free allowance to $60,000. This has led to the availability of more money for spending and, ipso facto, increased business activity and/or investment on the Stock Exchange.

Inflationary pressures, however, still remain a problem. Last week, the Central Bank Governor at the launch of the second pamphlet in a series on inflation pointed out that not only Government, but the private sector as well, contributed to the inflationary pressures on the national economy. Governor Williams hinted at another component in inflationary pressures – wage increases – and called for the realisation that there must be increased productivity before higher wages. In the same way that unfavourable financial and fiscal measures can act as deterrents to increased domestic, regional and international investments in the country, a high wage structure without accompanying productivity can also prove to be a disincentive.

This means that the principal stakeholders in the urgent need to develop Trinidad and Tobago’s non-energy sector to take the country forward in a post crude oil and natural gas age – Government, the domestic private sector, unionised and non-unionised wage earners – should recognise and accept their individual responsibilities to ensure the nation’s social and economic progress. Instead of the private sector blaming the Government and labour blaming both, each has a major role to play in taking the country forward.

In turn, all should contribute to the stabilising and eventual reduction of inflationary pressures and the continued improvement of Trinidad and Tobago’s investment climate. Trinidad and Tobago has relied for far too long, first on crude oil and later on crude and natural gas. Now it must develop strategies to cope with the around the corner situation of when its energy reserves run out. China, a major user of imported crude and natural gas, has demonstrated that it is not necessary for a nation to be an energy exporter for it to enjoy significant growth.

China has effectively curbed inflationary pressures and, in the process, penetrated, successfully, the world’s major markets, through the rapid development, albeit with the help of foreign investment, of a low cost non-energy sector. Trinidad and Tobago’s future economic survival demands that it brings a non-energy sector to maturity as rapidly as possible.