Jagdeo is ill-informed about Trinidad and Tobago’s economy

Mar 28, 2022 Features / Columnists, Peeping Tom

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Kaieteur News – Second Vice President, Bharrat Jagdeo’s comments about the economy of Trinidad and Tobago falling apart and not likely to see the light of day in the future were undiplomatic, loose and intemperate. They were also ill-informed and off target.
The economy of Trinidad and Tobago is not falling apart. It has experienced negative real GDP growth in recent years, on account of the decline of its oil sector but to conclude that the economy of the twin-island is falling apart is a mischaracterisation.
It is true that the economy of Trinidad and Tobago has been highly dependent on oil and gas. But that has been the situation with most oil and gas economies.
Between 2010 and 2015, the oil and gas sector accounted for around 40 percent of Trinidad and Tobago’s Gross Domestic Product (GDP).
But what Jagdeo seems to have overlooked is that after only one year of oil production, oil accounted for 17 percent of Guyana’s GDP in 2020, and is expected to account for 40 percent of its GDP by 2024. So which is the more oil-dependent economy, Guyana or Trinidad and Tobago?
It is true that the economy of the twin-island Republic has been in decline since 2016. Its real GDP has undergone six years of contraction – by 6 percent, 2.7 percent, 0.7 percent, 0.2 percent, and 7.4 percent in years 2016, 2017, 2018, 2019 and 2020 respectively. It is estimated to have shrunk by almost 1 percent last year. And it is true that much of this decline has been due to the fall in its energy exports.
But while Trinidad and Tobago has its problems, its economy is not falling apart. Indeed, that country has the fifth highest per capita GDP in this part of the world. Guyana is listed among the three poorest in the western hemisphere.
Nor can Trinidad and Tobago be said to be suffering from the resource curse. If anything, it is Guyana which has long suffered from the resource curse.
Boasting timber, sugar, rice, bauxite, gold and other precious metals, Guyana still has one of the lowest per capita incomes in the western hemisphere despite a small population.
It is also Guyana which has more to fear from the Dutch disease than Trinidad. The twin-island Republic has had 100 years of oil production. But given Guyana’s plans to maximize production and benefits in the shortest possible time, it is the Cooperative Republic which has more to fear from Dutch disease than Trinidad and Tobago.
Jagdeo ought to know better than to depict Trinidad and Tobago as making the mistake of being dependent on oil. Services in Trinidad and Tobago accounts for more than 40 percent of that country’s GDP.
Trinidad and Tobago has a strong manufacturing and services sector. Jagdeo was Minister of Finance in Guyana when Seeram Bros. and DIPCON, Trinidadian firms, dominated road construction in Guyana. He also ought to appreciate the contribution which Trinidad Cement Limited and its locally incorporated subsidiary made to the infrastructural development of Guyana.
He must also be aware that Trinidad companies were strong competitors for the supply of medical equipment in Guyana’s health sector. Many Guyanese often seek medical attention and university education in that country.
Jagdeo is known to shop at Massy supermarket. One dismissed state employee said that she met him there and spoke to him about the termination of her services. This outlet is part of a giant Trinidadian manufacturing and retail chain.
When he was President, there were discussions with the Trinidadians about establishing a distillery in Guyana. Those discussions led to problems between his government and Yesu Persaud.  There is still stiff competition between local brewers Banks DIH and the Trinidadian firm Ansa McAl, with many feeling that the twin-island firm has the upper hand in the local market.
Trinidad’s manufacturing outstrips the rest of the Caribbean. In fact, Trinidad enjoys an envious trade surplus with most CARICOM countries.
When Guyana started to develop its oil and gas sector, Trinidad companies moved in. Without them, Guyana would have seen an invasion from firms outside of the region.
Trinidad and Tobago therefore, has a strong manufacturing and services sector.  Jagdeo, who was President for 12 years, needs to consider the state of Guyana’s manufacturing and services sectors relative to that of the twin island Republic.
Jagdeo is equally wrong to assume that the Trinidad and Tobago’s economy is not expected to see the light of day in the near future.
The International Monetary Fund in its Article 4 Consultation assessment, published this month, anticipates that the economy of the twin-island Republic will rebound and enjoy a 5.5 percent growth for 2022.
Trinidad holds lessons for Guyana but so do some of our local leaders. Having seen Jagdeo’s failure to turnaround the local sugar industry, Guyanese should be more concerned about his involvement in managing the natural resources sector, including oil and gas.
(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

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