Last week in this space, un­der the head­line “Is Govt at­tempt­ing to stymie non-en­er­gy sec­tor growth?” this col­umn de­scribed as “con­testable” the opin­ion of the In­ter­na­tion­al Mon­e­tary Fund (IMF) team that vis­it­ed T&T this month that the cur­rent ad­min­is­tra­tion is “striv­ing to lift non-en­er­gy growth through greater em­pha­sis on im­prov­ing the busi­ness en­vi­ron­ment, en­cour­ag­ing trade and for­eign di­rect in­vest­ment and pro­mot­ing eco­nom­ic di­ver­si­fi­ca­tion.”

That com­men­tary ar­gued that there is lit­tle to no ev­i­dence that the Gov­ern­ment is try­ing to stim­u­late the non-en­er­gy sec­tor be­cause, in my view, the ad­min­is­tra­tion is:

• NOT putting in place mea­sures to im­prove the busi­ness en­vi­ron­ment;

• NOT do­ing near­ly enough to en­cour­age trade and for­eign di­rect in­vest­ment; and

• NOT putting in place poli­cies to pro­mote eco­nom­ic di­ver­si­fi­ca­tion.

In fact, this is what the IMF team had to say about eco­nom­ic growth in T&T, in its con­clud­ing re­port, is­sued on Feb­ru­ary 10, 2026:

“Eco­nom­ic growth is ex­pect­ed to re­main sub­dued in the near term be­fore grad­u­al­ly re­cov­er­ing over the medi­um term. The econ­o­my is es­ti­mat­ed to have grown by 0.8 per­cent in 2025, dri­ven by non-en­er­gy sec­tors.

“Re­al GDP growth is pro­ject­ed to mod­er­ate to 0.7 per­cent in 2026, as stronger growth in the non-en­er­gy sec­tor part­ly off­sets an an­tic­i­pat­ed de­cline in en­er­gy pro­duc­tion. Medi­um-term growth prospects are ex­pect­ed to im­prove as sev­er­al new en­er­gy projects, most no­tably Man­a­tee, come on­stream, lift­ing growth to around 2.9 per cent in 2027 and 3.5 per cent in 2028.”

My in­ter­pre­ta­tion of the above ex­cerpt from the IMF staff mis­sion’s con­clud­ing state­ment is that growth is like­ly to be sub-op­ti­mal in 2025 and 2026 and that they ex­pect the T&T econ­o­my to ex­pe­ri­ence fair growth in 2027 and 2028 when “sev­er­al new en­er­gy projects, most no­tably Man­a­tee, come on stream.”

In oth­er words, the IMF team ap­pears to sug­gest that T&T’s en­er­gy sec­tor will be pri­mar­i­ly re­spon­si­ble for growth in 2027 and 2028, rather than the non-en­er­gy sec­tor. It could be that the non-en­er­gy sec­tor is not ca­pa­ble of con­tribut­ing to growth in 2027 and 2028 be­cause of the Gov­ern­ment’s non-en­er­gy sec­tor poli­cies:

• Dou­bling of the du­ties and tax­es on the sale of al­co­hol and to­bac­co prod­ucts;

• Dou­bling of cer­tain Cus­toms fees;

• In­creased elec­tric­i­ty prices as a re­sult of a sur­charge that will take the form of a fixed, bill-lev­el charge of $0.05 per kWh for com­mer­cial and in­dus­tri­al cus­tomers;

• An as­set levy of 0.25 per cent, on the as­sets of com­mer­cial banks and in­sur­ance com­pa­nies op­er­at­ing in T&T. Com­mer­cial banks in T&T are al­ready sub­ject to a 35 per cent cor­po­ra­tion tax rate on their charge­able prof­its, which was in­creased from 30 per cent by for­mer fi­nance min­is­ter, Colm Im­bert, ef­fec­tive Jan­u­ary 1, 2018;

• In­crease in the con­tri­bu­tion rates charged by the Na­tion­al In­sur­ance Board by 3.0 per cent ef­fec­tive Jan­u­ary 5, 2026, fol­lowed by an­oth­er 3.0 per cent in­crease from Jan­u­ary 4, 2027. Com­pa­nies pay two-thirds (66.6 per cent) of that in­crease; and

• In­crease in the cost of nat­ur­al gas sold to light in­dus­tri­al and com­mer­cial cus­tomers in T&T by about 77 per cent.

It is clear that the Gov­ern­ment had the op­tion of plac­ing some of the di­rect bur­den of those high­er charges—such as the elec­tric­i­ty sur­charge and the Cus­toms fees—on in­di­vid­ual tax­pay­ers. The Gov­ern­ment chose, in­stead, to im­pose the full bur­den of these in­creas­es on the non-en­er­gy sec­tor.

Is it pos­si­ble for the non-en­er­gy, man­u­fac­tur­ing sec­tor to ex­pand, ex­port more prod­ucts, be­come more com­pet­i­tive, hire more em­ploy­ees, and even­tu­al­ly pay more tax­es, if the Gov­ern­ment has cho­sen to place the bur­den of rev­enue in­creas­es on it?

Counter-in­tu­itive­ly, the IMF team seems to think that it is pos­si­ble:

“T&T needs all en­gines of growth op­er­at­ing to build a more di­ver­si­fied, re­silient, and in­clu­sive econ­o­my. Oil and gas rev­enues have long un­der­pinned eco­nom­ic de­vel­op­ment and will con­tin­ue to sup­port medi­um-term growth, fis­cal rev­enue and ex­port earn­ings. How­ev­er, over the long-term, achiev­ing both hor­i­zon­tal and ver­ti­cal di­ver­si­fi­ca­tion will be es­sen­tial to nav­i­gate the chal­lenges of glob­al en­er­gy-mar­ket volatil­i­ty and to lay the foun­da­tions for sus­tain­able, broad-based, and in­clu­sive growth.

“IMF staff wel­come the au­thor­i­ties’ in­creased em­pha­sis on eco­nom­ic di­ver­si­fi­ca­tion. Guid­ed by the Man­i­festo 2025 and the Re­vi­tal­i­sa­tion Blue­print, their agen­da fo­cus­es on in­creas­ing pri­vate in­vest­ment in ma­jor projects, de­vel­op­ing agri­cul­ture and agro-pro­cess­ing, ex­pand­ing tourism and the cre­ative econ­o­my, pro­mot­ing a knowl­edge-based and in­no­va­tion-dri­ven econ­o­my, and strength­en­ing small and medi­um-sized en­ter­pris­es through im­proved ac­cess to fi­nance and a more sup­port­ive busi­ness en­vi­ron­ment.

“These ef­forts are com­ple­ment­ed by broad­er re­forms to en­hance eco­nom­ic re­silience and growth, im­prove gov­er­nance and reg­u­la­tion, up­grade in­fra­struc­ture, and in­vest in hu­man cap­i­tal.”

Again, it seems to me that the IMF team paid more at­ten­tion to the Gov­ern­ment’s “in­creased em­pha­sis on eco­nom­ic di­ver­si­fi­ca­tion” than on the poli­cies it has im­ple­ment­ed that seem des­tined to dis­cour­age “pri­vate in­vest­ment in ma­jor projects.”

Ex­tract­ing more tax rev­enue from the non-en­er­gy, ex­port-fo­cused sec­tor is not con­ducive to fa­cil­i­tat­ing that sec­tor to in­crease its con­tri­bu­tion to na­tion­al growth.

That con­clu­sion is based on the ex­pla­na­tion of what coun­tries need to do to grow their economies.

Ac­cord­ing to a de­f­i­n­i­tion from In­vesto­pe­dia, “Coun­tries grow their economies by in­creas­ing the pro­duc­tion of goods and ser­vices, typ­i­cal­ly mea­sured by GDP, through key dri­vers like in­vest­ing in in­fra­struc­ture, ad­vanc­ing tech­nol­o­gy, im­prov­ing hu­man cap­i­tal (ed­u­ca­tion/health), and pro­mot­ing in­ter­na­tion­al trade. Gov­ern­ments stim­u­late growth by fos­ter­ing in­no­va­tion, en­sur­ing po­lit­i­cal sta­bil­i­ty, and en­cour­ag­ing en­tre­pre­neur­ship.”

Ba­si­cal­ly, the em­pha­sis in that de­f­i­n­i­tion is on in­creas­ing the pro­duc­tion of goods and ser­vices. Cal­cu­lat­ed us­ing the ex­pen­di­ture ap­proach, the for­mu­la for ar­riv­ing at a coun­try’s gross do­mes­tic prod­uct (GDP) is Con­sump­tion + In­vest­ment + Gov­ern­ment Spend­ing + Net Ex­ports.

This coun­try has three prob­lems that place the fo­cus on pri­vate sec­tor in­vest­ment to dri­ve eco­nom­ic growth:

1) T&T has a fis­cal deficit prob­lem, which lim­its the abil­i­ty of Gov­ern­ment spend­ing on in­fra­struc­tur­al projects to con­tribute to the growth of the econ­o­my;

2) T&T does not have the fis­cal space to bor­row too much mon­ey to fund capex as the av­er­age cap­i­tal ex­pen­di­ture (capex) for the six-year fis­cal pe­ri­od 2020 to 2025 was $3.774 bil­lion. That is not enough to move the GDP nee­dle; and

3) T&T al­so has a prob­lem where­by much of the con­sump­tion of goods and ser­vices by pri­vate house­holds is dri­ven by im­ports, per­haps as much as 80 per cent.

Giv­en the cur­rent for­eign ex­change arrange­ments, in­creas­ing con­sump­tion by pri­vate house­holds is sim­ply go­ing to in­crease the un­met de­mand for for­eign ex­change.

There­fore, it seems ev­i­dent that for the do­mes­tic econ­o­my to grow, in­vest­ment by the pri­vate sec­tor that is fo­cused on in­creas­ing net ex­ports is key.

Giv­en the long-stand­ing is­sue of for­eign ex­change avail­abil­i­ty and the new is­sue of high­er tax­es, charges and costs, has the Gov­ern­ment cre­at­ed a cli­mate that would en­cour­age for­eign and lo­cal cap­i­tal to make new in­vest­ments in T&T?