Sandy’s tail

Not only are the member states of the Caribbean Community of Nations (Caricom), which themselves have been victims of hurricanes through the years, bracing for a rise in food prices, but there is expected to be a sharp drop off in remittances by nationals residing and working in eastern seaboard States of the United States. It should be noted that at least two Caricom countries — Haiti and Jamaica — were hit by Sandy and several persons were killed as it coursed its way through the Caribbean to the United States.

In some of the Eastern Caribbean countries remittances have been greater than the income generated by, say, agriculture or any group of industries. A great deal of the money, and in many cases all of it, which normally would have been remitted on a monthly basis from salaries of New York and New Jersey resident nationals will, in all probability, have to be diverted to repairing or rebuilding homes and the replacement of furniture, appliances, clothes and vehicles.

Although considerably less money is remitted to Trinidad and Tobago as a percentage of overall earnings, nonetheless it forms a not inconsiderable part of the revenue in some low income areas. Any adverse effect of the post Sandy value of the United States dollar in relation to other major currencies will have an uncomfortable effect on the Trinidad and Tobago currency, which is pegged to the US dollar, as the worth of the TT dollar in relation to these currencies will be adjusted downward, automatically.

This will mean that the landed cost of goods from these countries, whether food or non-food items, will rise. It is most likely that freight lines operating out of the United States to Trinidad and Tobago, as they would to other ports of call, would charge more. The end result will be that this country’s cost of living will rise. In addition, inasmuch as the United States is Trinidad and Tobago’s largest export market, what with the anticipated rise in freight costs, several exporters may think it expedient to readjust downward the cost of items shipped to the United States in a bid to remain competitive.

But although there may not be a pronounced loss of market share, nevertheless, because of the marked effect of hurricane Sandy on the ability of residents of New York and New Jersey to acquire goods and services to which they had grown accustomed, there will be a slide in the level of remittances to Trinidad and Tobago. A saving grace may be the affinity of persons living in the United States to obtaining goods on credit.

This country will have to seek to make up for any loss of market share in the eastern seaboard of the United States, through pursuing its present strategy of seeking to increase its market share in Latin America. Already, this approach, particularly in the area of liquefied natural gas (LNG) has proven to be realistic. Up to a couple of years ago, Trinidad and Tobago produced liquefied natural gas accounted for some 72 percent of the United States’ liquefied natural gas import market until there was a turn to the Latin American market.

Today, the United States is, increasingly, an exporter of liquefied natural gas. What hurricane Sandy has demonstrated, as far as Trinidad and Tobago is concerned, is the growing need for this country to explore and to seek to expand its share of the Latin American and Caribbean market. It is critical that we do this and, indeed, this would have been necessary even without the prodding of Sandy.

The response of the authorities in Sandy affected areas of the United States has shown that although no State, no nation can be 100 percent prepared for a hurricane that there are certain steps which can and must be taken such as the providing, identifying and equipping of evacuation centres to which affected persons living in different areas can go. Admittedly, while advance warning systems, radar, weather satellites and reconnaissance planes are among the strategies employed to track hurricanes and warn of their approach there is all too often the need for citizens to respond to instructions. On a more positive note, hopefully, our economy will be able not only to ride out the aftershocks of hurricane Sandy and the international financial crisis but to grow steadily.