Mahabir: T&T economy stagnant

Despite positive economic forecasts T&T’s economy remains stagnant and that is not going to change any time soon, economist and Independent Senator Dr Dhanasyar Mahabir has warned. In the feature address at the Penal/Debe Chamber of Commerce’s Christmas dinner at Canton Palace, San Fernando , Mahabir recalled that in 2008 his prediction of ten years of economic stagnation was shot down. “Five years later, we have seen a level of stagnation that we did not anticipate and the business community did no t expect,” he said.

Mahabir said he would like to change his prediction but has not seen any significant changes in the economy. “In 2008 when I said we were going to have ten years of economic decline I expected by 2012 for there to be some significant signs and I have not seen them, so regrettably I have to say I do not know when this period of stagnation will end,” he said.

Mahabir said if small medium or large businesses, review their sales figures they would find relatively flat sales, or downward decline with few exceptions. This  would indicate that contrary to projections of economic growth, T&T’s economy is not moving from its current position, he said.

“Every year you keep hearing the projections from the Ministry of Finance, the Central Bank and the much respected International Monetary Fund (IMF) that you are going to experience positive, significant and sustained economic growth,” he said, adding that even whenr such projections are made by the IMF, “we hear that there were some difficulties in wider economies and we were not able to realise the projected growth”,

Mahabir said at present T&T produces almost half the amount of oil it produced a decade ago even though oil prices are attractive. Convers1ely, natural gas prices are low and T&T has an abundance. He said while he did not want to be the bearer of bad news, it is clear that “our energy sector does not seem to be holding out the kind of optimism that we expected from it”. “We are not going to have the energy sector pulling us out as expected, those in the industry know that,” he added. 

According to Mahabir, there is not much government can do in the present circumstances because the source of the problem must first be found. “Finally after 50 years this economy really has to diversify. We cannot talk now. The diversification will have to come from the private sector,” he said. Mahabir said T&T has to begin exporting its expertise in oil and gas and penetrate markets outside of the region. He said more emphasis must be placed on doing business with Asia and Africa.

“Unless we diversify internationally I cannot give you a time line when we will begin to experience sustaining economic growth in the economy. I know this is a bit depressing, but we know there is a problem and we can fix it,” he said. Penal/ Debe Chamber president Sahid Hosein, while the area “seems to be booming, as a country we are at a crossroad”.

He said for improved business development and social mobility there must be good governance, proper constitutional arrangements, proper infrastructure, proper procurement and a public service that is properly managed with a understanding of their role. “The sooner, the better,” Hosein added.