Putting TT to the test

This country’s main strength is its developed energy sector, with large reserves of natural gas, as well as infrastructure to extract its hydrocarbon resources. The country supplies refined products to the Caribbean region.

Other strengths must also take into consideration the substantial buffers which Trinidad and Tobago possesses.

Although falling, the country still boasts of reserves as reported by the Central Bank at end of October 2016 of $9,756.6 million, which is over ten months of import cover. There is also the added buffer of the existence of a Heritage and Stabilisation Fund (HSF) which is over US$5 billion. In addition, there is also a good stock of highly skilled workers and a well trained work force. The country boasts a number of training and development programs for the existing talent pool. Furthermore, the country has developed physical infrastructure in different locations to facilitate investment in Information and Communications Technology (ICT) such as the Tamana In-Tech Park.

Among other areas the country has also focused on Information Technology Enabled Services (ITeS); this will certainly provide the skills that new industries will require in the future. Although in a recession, the official unemployment figure is still low and there has been no capital flight reported nor exodus of persons from the country.

Admittedly there are a number of weaknesses. The economy continues to be dependent on the energy sector which accounts for more than 80% of exports, and a few years ago more than 40% of government revenues.

This makes the economy vulnerable to exogenous shocks such as global oil prices and it is anticipated that growth may deteriorate if prices remain structurally lower in the coming years.

Other weaknesses include the high salary costs when compared to countries such as India, Philippines, Columbia and Argentina.

This can discourage IT investors who may be put-off by the high labour costs. The country has a high incidence of crime, which forms part of the risk consideration of investors. In addition, the existence of Government bureaucracy may slow the completion of various infrastructure projects as well as the entry of IT service providers to the country. The limited scalability of the workforce and graduates may hinder the activities of service providers.

There are a number of threats to the Trinidad and Tobago economy that include further decrease in oil prices and debt levels crossing 56% of GDP. Any further decreases in oil prices will further reduce government revenues. If there is no success at fiscal consolidation then to finance the deficit the government will have to borrow, which will increase the debt and stifle growth.

As a small, open economy Trinidad and Tobago risks capital flight in response to its deteriorating growth outlook and the possibility of more substantial currency depreciation. The latter will impact inflation and ultimately the standard of living experienced by us all.

Despite the weaknesses and real threats facing the economy there are a number of opportunities that are available to the country. As an example, there has been progress on structural efforts to support the growth of the private sector – among these, labour reform, renewed privatization efforts thus providing opportunities for investment by the citizens and private sector, improved service provision, a strengthening of the non-banking financial sector and additional support for small and medium-sized enterprises in the non-energy sector – this can improve long-term growth prospects.

Other avenues can arise from the output of the local universities that added to the available talent pool. The existence of CARICOM as an enhanced market for ensuring economies of scale as well as acting as a coordinating center for providing outsourcing services is a resource to be exploited by our private sector.

While we must be pragmatic and although being apprehensive is normal when dealing with what appears to be a very dismal economic environment, we also have to look at the evidence of our economic environment.

The economy is facing major challenges that require strong leadership, an engaged population and sacrifices all round. In these circumstances, we must make use of the ability available and willingness work for country to utilize the strengths and opportunities that present themselves to rebuild our economy.