To­day is East­er Sun­day. To Chris­tians, it sym­bol­is­es the tri­umph of hope and res­ur­rec­tion—a new be­gin­ning. Oth­er re­li­gious fes­ti­vals around this time (Passover, Holi, Vesak, Nowruz, Ra­madan) do not share the same the­o­log­i­cal sig­nif­i­cance as East­er but re­flect sim­i­lar themes of re­new­al, re­birth and hope. The align­ment of these fes­ti­vals is dri­ven by the sea­son, as they all co­in­cide with spring. Spring rep­re­sents re­birth, fer­til­i­ty and new life, mak­ing it a nat­ur­al time for re­li­gions to cel­e­brate re­new­al, whether in na­ture or through spir­i­tu­al re­demp­tion.

This year, spring has co­in­cid­ed with sev­er­al ma­jor con­flicts: the war in Ukraine, the war in the Mid­dle East, and on­go­ing con­flicts in the Con­go, Yemen and So­ma­lia. While the lat­ter may be viewed as re­gion­al con­flicts, the po­ten­tial for con­flict in­volv­ing Iran threat­ens to have a ma­jor glob­al sys­temic ef­fect, with cas­cad­ing con­se­quences across en­er­gy, trade, in­fla­tion, geopol­i­tics and fi­nan­cial sta­bil­i­ty. The im­pli­ca­tions can be un­der­stood through five ma­jor trans­mis­sion chan­nels.

Trinidad and To­ba­go, like oth­er Cari­com mem­bers, is an open econ­o­my that de­pends heav­i­ly on trade and is now a net im­porter of fu­el. The longer these con­flicts per­sist, the greater the lev­el of in­fra­struc­tur­al dam­age and the wider the im­pact on the glob­al econ­o­my. Guyana, as a net ex­porter of fos­sil fu­els, is well-po­si­tioned to ben­e­fit from ris­ing oil prices. Trinidad and To­ba­go’s out­look, how­ev­er, is mixed. We are a gas-based econ­o­my with de­clin­ing re­serves, and much de­pends on the suc­cess of on­go­ing ex­plo­ration and any gains from ac­cess­ing Venezuela’s near­by gas fields.

In ad­di­tion to the im­pact of the con­flict in the Mid­dle East, un­set­tled labour is­sues are like­ly to have a sig­nif­i­cant fi­nan­cial im­pact on the Gov­ern­ment’s fi­nances. Hav­ing agreed to a 10 per cent wage set­tle­ment with the Pub­lic Ser­vices As­so­ci­a­tion, it was in­evitable that oth­er unions would seek sim­i­lar terms. Now that the Na­tion­al Union of Gov­ern­ment and Fed­er­at­ed Work­ers (NUGFW) and the Chief Per­son­nel Of­fi­cer (CPO) have agreed to a 10 per cent wage in­crease for dai­ly-rat­ed work­ers, cov­er­ing two bar­gain­ing pe­ri­ods (2014–2019), fur­ther set­tle­ments along these lines can be ex­pect­ed. Protest­ing teach­ers and nurs­es will like­ly de­mand sim­i­lar treat­ment.

The bar­gain­ing pe­ri­od 2020–2025 re­mains out­stand­ing. As these set­tle­ments re­late to past pe­ri­ods, they can on­ly ad­dress cost-of-liv­ing ad­just­ments and there­fore will have no im­pact on pro­duc­tiv­i­ty go­ing for­ward. We are now at the be­gin­ning of a new bar­gain­ing pe­ri­od (2026–2028), and there is on­ly a small chance that agree­ments for this pe­ri­od will be con­clud­ed in time to have any mean­ing­ful ef­fect.

Nei­ther the PSA em­ploy­ees’ set­tle­ment, nor the NUGFW set­tle­ment, nor the im­pact of in­creased Na­tion­al In­sur­ance con­tri­bu­tions was in­clud­ed in the bud­get, hence the rel­a­tive­ly small pro­ject­ed deficit of $3.9 bil­lion. Nor have back­pay oblig­a­tions been set­tled. The NUGFW set­tle­ment alone is es­ti­mat­ed at $2.6 bil­lion, demon­strat­ing the size­able fis­cal im­pact of these pay­ments. We will learn in the mid-year bud­get re­view (due in May) how Min­is­ter Dav­en­dranath Tan­coo in­tends to ad­dress these out­stand­ing oblig­a­tions. The cen­tral is­sue re­mains un­changed: there is in­suf­fi­cient rev­enue to meet these com­mit­ments. Rev­enue from the Man­a­tee project is at least a year away—as­sum­ing no ac­cel­er­at­ed cap­i­tal al­lowances re­duce the tax­es payable to the State.

There may be a pos­i­tive uptick in nat­ur­al gas and petro­chem­i­cal ex­ports due to the con­flict in the Mid­dle East. The ques­tion, how­ev­er, is whether this will be suf­fi­cient to meet these back­pay oblig­a­tions or whether the Gov­ern­ment will need to bor­row, there­by in­creas­ing the na­tion­al debt. Ul­ti­mate­ly, how strong are the Fi­nance Min­is­ter’s bal­anc­ing skills?