Dear Editor,
It was reported in multiple media outlets that some in Trinidad and Tobago were perturbed by a comment that Vice President Jagdeo made about the economy of Trinidad & Tobago. The VP, while explaining why Guyana must use its oil wealth to diversify the Guyanese economy, made reference to the Trinidad economy. He said that the Trinidad economy was heavily reliant on gas, something that Guyana should avoid. In fact, growth is represented in all aspects of the budget, from agriculture to technology. He was arguing that Guyana should learn the lesson of Trinidad and use its new found wealth to diversify the Guyanese economy. The leadership in Trinidad and Tobago may not want to hear it but, did the VP say anything that was not obvious to everyone?
Let us examine the facts. Foreign Direct Investment in Trinidad in 2021 was -0.5 percent. The implications are that there is a flight of investments from Trinidad. This would have a direct impact on employment, consumption and ultimately the circular flow of economic activity. https://data.worldbank.org/indicator/BX.KLT.DINV.WD.GD.ZS?locations=GY. According to the Central Bank of Trinidad and Tobago GDP growth was -7.7 % in January 2021. This has been the trend since 2018. Talk to any businessman in Trinidad and they will tell you that their business is either at a standstill or that they are just covering costs. They can’t even get US dollars to conduct international business.
In fact, in a recent interview published in Newsday (03/17/2022) French Ambassador Didier Chabert was quoted as saying “It is important for TT to improve its business environment, something that needs to be of strong concern to institutions. It is not my personal point of view, but in the World Bank’s ranking of doing business, TT placed at 105th position.” He further stated that “There is need to improve some infrastructures such as stable WiFi and easy internet access. In the case of legal issues, access to the judicial system must also be easy. If TT wants to be at the forefront of the economy of the region, it needs to improve the climate of doing business.” Clearly, Trinidad did not focus on those key macroeconomic factors such as inflation, gross domestic product (GDP) national income, and unemployment levels when it had the flow of revenues from oil. The VP is correct is saying that Guyana’s economic focus through is national budget seeks to address these concerns now and in the future with oil revenues.
The VP observations are also are well supported as many Trinidadians have been flocking to the shores of Guyana looking for investment opportunities. There is nothing wrong with that. From the public information that is available Guyana welcomes all investments. However, investments from Trinidad and Tobago must not displace Guyanese. The Economist magazine reported in its country profile that “The People’s Progressive Party/Civic led by the president, Irfaan Ali, has embarked an ambitious national development plan backed by windfall oil earnings. It will support public investment and double-digit growth. A revival of state-owned enterprises and investment in infrastructure are priorities. Coronavirus control through vaccination is making slow progress. Inflation and currency appreciation pressure will grow. The current-account balance will move into surplus in 2022. https://country.eiu.com/guyana”. This is what the VP is saying, focus the oil revenues on economic long term growth.
Sincerely,
Tilokie and Sherlock Depoo
