University of the West Indies economist Dr Vaalmikki Arjoon has recommended that T&T use International Monetary Fund (IMF) expertise to "the fullest extent" and not just for advice on fiscal remodelling, expenditure cuts, and incentivising oil companies.
"We should have them assist us in correcting our balance of payments deficit through new ways to boost revenues from our increased exports and capital accounts, which does not involve a depreciation of our currency," he said.
"Trade reform conditions are also common in IMF support programmes, where 77 per cent of the countries that had such programmes over the last two decades implemented measures."
Arjoon said trade reform conditions are necessary now given the limited availability of foreign exchange to merchants and because of the repercussions the downgrade by rating agency Moody's could have on the economy. He said the downgrade could negatively affect T&T's terms of trade and trade credit internationally.
The economist also suggested that T&T seek IMF expertise for the push toward diversification. He said experts from the agency could advise on developing the International Financial Centre (IFC) which has an integral role in getting T&T out of the recession through diversifying the local financial market.
"Indeed, the IMF can assist us in attracting other global financial institutions to set up operations locally at our IFC, which will make the sector more competitive," he said.
"This can also assist with any capital flight issues where businesses and investors invest their funds abroad, which reduces the foreign exchange stocks locally.
"By making the local financial market more competitive through the IFC, better returns will be offered to investors locally and they may be more compelled to invest their funds here rather than abroad. It will also attract further foreign direct investment, as more international financial firms will feel compelled to invest here in our economy, which is integral for diversification, revenue generation and increasing our stocks of foreign exchange."