The per­pet­u­al theme since in­de­pen­dence has been the need for eco­nom­ic growth, to im­prove the coun­try’s stan­dard of liv­ing and di­ver­si­fi­ca­tion, and to en­sure against de­pen­dence on the en­er­gy sec­tor. Over the years gov­ern­ments fo­cused their in­vest­ment ex­pen­di­ture on ed­u­ca­tion and in­fra­struc­ture de­vel­op­ment be it roads, schools, of­fice build­ings or hos­pi­tals. It has al­so fa­cil­i­tat­ed lo­cal and for­eign in­vest­ment by tax in­cen­tives or build­ing in­dus­tri­al es­tates. There are over 20 such es­tates, the most im­por­tant of which Point Lisas, Point Fortin and La Brea, have been as­so­ci­at­ed with the en­er­gy sec­tor. Oth­er es­tates geared to man­u­fac­tur­ing have not fared as well as these es­tates.

The oth­er ma­jor area of ex­pen­di­ture has been sub­si­dies and trans­fer pay­ments which now ac­count for more than 50 per cent of the Gov­ern­ment’s an­nu­al bud­get up from 30-35 per cent in the Man­ning era. The ini­tial rea­son for this ap­proach was the ar­gu­ment that all should share the en­er­gy sec­tor rev­enues. Whilst this ob­jec­tive may have been laud­able if it were in­sti­tut­ed on a tran­si­tion­al ba­sis, it al­so comes with sig­nif­i­cant down­sides if in­sti­tut­ed per­ma­nent­ly.

The first is that many have come to be­lieve and ex­pect that such ex­pen­di­ture is nor­mal and ought not to be with­drawn. Sec­ond, when en­er­gy sec­tor rev­enues de­cline, main­tain­ing such ex­pen­di­tures cre­ates a fis­cal im­bal­ance. Third, the fis­cal im­bal­ance dis­places oth­er pri­or­i­ty ex­pen­di­tures. The fourth is that some house­holds be­come de­pen­dent on the State. The key point to note is the State can­not spend its way out of a de­pres­sion as the TT dol­lar is not an in­ter­na­tion­al­ly trad­ed cur­ren­cy and can­not be used to pay for ex­ports. In­creased state ex­pen­di­ture in­creas­es the na­tion­al debt and de­pletes for­eign ex­change re­serves ir­re­triev­ably.

The 2015-2021 de­pres­sion end­ed be­cause en­er­gy prices in­creased due to the post-COVID re­cov­ery and the war in Ukraine. En­er­gy prices have since de­clined as has nat­ur­al gas pro­duc­tion mod­er­at­ing any growth prospects. Whilst Lo­ran Man­a­tee will ini­tial­ly re­verse the de­cline in nat­ur­al gas pro­duc­tion it does not solve the coun­try’s long-term is­sue or im­prove the di­ver­si­fi­ca­tion ef­fort. If giv­en the fi­nal sanc­tion by Shell it will not come on stream un­til 2026 as sug­gest­ed by the en­er­gy min­is­ter. Get­ting gas from the Drag­on Field is more prob­lem­at­ic.

The next few years will be dif­fi­cult for the gov­erned and the Gov­ern­ment. It re­quires a pa­tient ap­proach fo­cused on the ba­sics and the avoid­ance of ex­trav­a­gance even as the sprint to the 2025 na­tion­al elec­tion gains mo­men­tum. Low­er en­er­gy prices will mean that the for­eign re­serves will con­tin­ue to de­cline. In­fla­tion is like­ly to be mod­er­ate, but this is coun­ter­bal­anced by the im­ple­men­ta­tion of prop­er­ty tax­es and elec­tric­i­ty rates and the in­evitable ar­gu­ment of falling re­al wages. In ad­di­tion, the sus­tain­abil­i­ty of the Na­tion­al In­sur­ance Fund must be ad­dressed us­ing a mul­ti-tiered ap­proach in­volv­ing rais­ing the re­tire­ment age, and the con­tri­bu­tion rate.

Man­ag­ing these eco­nom­ic vari­ables will be dif­fi­cult enough. Man­ag­ing the crime sit­u­a­tion will con­tin­ue to be chal­leng­ing. The uni­ver­sal pub­lic out­cry over crime demon­strates that the of­fi­cials re­spon­si­ble for main­tain­ing law and or­der are dis­com­bob­u­lat­ed. Avail­able ev­i­dence sug­gests that the pro­lif­er­a­tion of gang vi­o­lence is as­so­ci­at­ed with make-work pro­grammes and gov­ern­ment projects. Ad­dress­ing vi­o­lent crime and fis­cal pri­or­i­ties will re­quire a mul­ti­dis­ci­pli­nary ap­proach and un­con­ven­tion­al de­ci­sions.