GEISHA KOW­LESSAR ALON­ZO

Ahead of the up­com­ing na­tion­al bud­get pre­sen­ta­tion, T&T faces a com­plex con­ver­gence of labour mar­ket con­trac­tion and fis­cal re­align­ment.

The coun­try’s labour mar­ket reg­is­tered sig­nif­i­cant con­trac­tion in the first quar­ter of 2026, as to­tal na­tion­al un­em­ploy­ment rose by 6,200 in­di­vid­u­als to reach 31,900, up from 25,700 record­ed in the fourth quar­ter of 2025, ac­cord­ing to da­ta from the Cen­tral Sta­tis­ti­cal Of­fice (CSO).

Over the same pe­ri­od, the num­ber of peo­ple with­out jobs and ac­tive­ly seek­ing work in­creased by 5,800, ris­ing from 21,300 in 2025Q4 to 27,100 in 2026Q1.

These sta­tis­tics co­in­cide with ma­jor pub­lic sec­tor re­struc­tur­ing ahead of the up­com­ing na­tion­al bud­get pre­sen­ta­tion, in­clud­ing the wind­ing up of the Com­mu­ni­ty-Based En­vi­ron­men­tal Pro­tec­tion and En­hance­ment Pro­gramme (Cepep)—which re­sult­ed in the can­cel­la­tion of con­tracts for over 300 con­trac­tors and af­fect­ed an es­ti­mat­ed 10,500 work­ers—work­force re­duc­tions in the Un­em­ploy­ment Re­lief Pro­gramme (URP) and the sus­pen­sion of the Mil­i­tary-Led Aca­d­e­m­ic Train­ing (Mi­lat) pro­gramme, im­pact­ing 200 trainees and 50 staff mem­bers.

Ac­cord­ing to the Draft Es­ti­mates of Ex­pen­di­ture 2026, to­tal re­cur­rent ex­pen­di­ture for the Min­istry of the Peo­ple, So­cial De­vel­op­ment and Fam­i­ly Ser­vices was TT$5.988 bil­lion for fis­cal 2026

T&T econ­o­mist Dr Dave Seer­at­tan and re­gion­al econ­o­mist Bar­ba­di­an Je­re­my Stephen em­pha­sised that the up­com­ing fis­cal pack­age must ur­gent­ly move be­yond pas­sive trans­fer pay­ments to rec­on­cile pub­lic spend­ing ef­fi­cien­cy, tar­get­ed tran­si­tion sup­port and pri­vate sec­tor-led job cre­ation.

Fis­cal pri­or­i­ties and the ef­fi­cien­cy im­per­a­tive

Seer­at­tan high­light­ed that over the past two decades, suc­ces­sive ad­min­is­tra­tions have al­lo­cat­ed an av­er­age of 35 per cent of to­tal an­nu­al pub­lic ex­pen­di­ture to­ward so­cial de­vel­op­ment.

“T&T has a very gen­er­ous wel­fare state. On av­er­age, dif­fer­ent ad­min­is­tra­tions have spent on av­er­age about 35 per cent of to­tal ex­pen­di­ture on so­cial de­vel­op­ment, a sig­nif­i­cant al­lo­ca­tion, over the last 20 years.

“This re­flects the high pri­or­i­ty giv­en to so­cial de­vel­op­ment by suc­ces­sive ad­min­is­tra­tions, of­ten in spite of tighter fis­cal space. For ex­am­ple, the per­sis­tent fis­cal deficits we have ex­pe­ri­enced over the last decade have not re­sult­ed in sig­nif­i­cant cur­tail­ment of ben­e­fits. That is not a sus­tain­able po­si­tion, but does not im­ply aus­ter­i­ty since this ap­proach is gen­er­al­ly coun­ter­pro­duc­tive, lead­ing not on­ly to low­er wel­fare lev­els and high­er pover­ty rates but al­so to re­duced to­tal fac­tor pro­duc­tiv­i­ty and slow­ing growth,” Seer­at­tan ex­plained.

How­ev­er, Seer­at­tan cau­tioned that main­tain­ing high ex­pen­di­ture with­out op­er­a­tional ef­fi­cien­cy is un­sus­tain­able over the medi­um term. Cru­cial­ly, he warned pol­i­cy­mak­ers against us­ing the up­com­ing bud­get to im­pose blan­ket aus­ter­i­ty.

“This does not im­ply aus­ter­i­ty, since this ap­proach is gen­er­al­ly coun­ter­pro­duc­tive,” Seer­at­tan ex­plained adding, “Rather, the chal­lenge is to in­crease the ef­fi­cien­cy with which these pro­grammes are man­aged.”

He point­ed out that mas­sive fi­nan­cial in­vest­ments have his­tor­i­cal­ly failed to yield cor­re­spond­ing im­prove­ments in na­tion­al so­cial in­di­ca­tors, not­ing that this gap be­tween spend­ing and tan­gi­ble re­sults stems from sys­temic bot­tle­necks, in­clud­ing poor tar­get­ing, high ad­min­is­tra­tive over­heads, mis­man­age­ment, and uni­ver­sal price sub­si­dies that as­sist high­er-in­come groups.

Fur­ther­more, Seer­at­tan said tem­po­rary re­lief schemes have cal­ci­fied in­to per­ma­nent trans­fers, cre­at­ing gen­er­a­tional de­pen­den­cies among vul­ner­a­ble house­holds.

“Across the globe, these pro­grammes are plagued by prob­lems re­lat­ed to poor tar­get­ting, high ad­min­is­tra­tive costs, mis­man­age­ment and cor­rup­tion. The prob­lem of poor tar­get­ting, that is, en­sur­ing that the ben­e­fits go to the in­di­gent pop­u­la­tion, is par­tic­u­lar­ly per­va­sive. The ap­proach we have tak­en to uni­ver­sal sub­si­dies and gen­er­alised trans­fers has not helped.

“Ad­di­tion­al­ly, in many cas­es, pro­grammes that are meant to be tem­po­rary as­sis­tance to help vul­ner­a­ble peo­ple get back on their feet turn in­to per­ma­nent trans­fers be­cause vul­ner­a­ble in­di­vid­u­als are not in­cen­tivised to tran­si­tion off the pro­grammes. This can re­sult in sec­tions of the pop­u­la­tion de­vel­op­ing de­pen­den­cies on the pro­grammes. Some of the em­pir­i­cal re­search in this area, show­ing that of­ten the same fam­i­lies re­main on pub­lic as­sis­tance pro­grammes, some­times over gen­er­a­tions, bear this out,” he ex­plained.

Tran­si­tion dy­nam­ics for dis­placed work­ers

The sharp rise in first-quar­ter un­em­ploy­ment di­rect­ly re­flect­ed pub­lic sec­tor re­struc­tur­ing and com­pa­ny clo­sures.

The gov­ern­ment al­lo­cat­ed $7 mil­lion to wrap up CEPEP’s li­a­bil­i­ties and op­er­a­tions and while the ad­min­is­tra­tion de­fends these clo­sures as nec­es­sary fis­cal mea­sures to erad­i­cate ad­min­is­tra­tive waste, elim­i­nate “ghost gangs” and re­move state fund­ing as­so­ci­at­ed with crim­i­nal el­e­ments, the abrupt re­moval of these safe­ty nets has placed im­me­di­ate strain on thou­sands of fam­i­lies.

Seer­at­tan warned that phas­ing out lega­cy pro­grammes with­out clear in­ter­me­di­ate buffers leaves vul­ner­a­ble house­holds ex­posed as the gov­ern­ment at­tempts to tran­si­tion to­ward longer-term labour mar­ket mech­a­nisms, such as the Min­istry of Fi­nance’s Em­ploy­ment Fund.

“The risk with this ap­proach is that in the tran­si­tion from the old ap­proach to the new, fam­i­lies that have no al­ter­na­tive in­come flows ex­cept from these pro­grammes may fall through the cracks,” Seer­at­tan cau­tioned, stress­ing the need for ex­plic­it tran­si­tion­al safe­ty nets in the bud­get al­lo­ca­tions.

“The gov­ern­ment may, there­fore, want to put in place tran­si­tion­al arrange­ments which sup­port fam­i­lies that fall in­to this group. The gov­ern­ment may al­so want to in­tro­duce in­ter­ven­tions for vul­ner­a­ble in­di­vid­u­als who can­not ac­cess pro­grammes for which they qual­i­fy be­cause they don’t have prop­er doc­u­men­ta­tion or don’t know how to ap­ply. They may al­so want to ra­tio­nalise the num­ber of small, over­lap­ping pro­grammes that serve the same peo­ple through re­forms which re­duce the num­ber of pro­grammes but in­crease the ben­e­fit thresh­old and dig­i­tal­i­sa­tion that would clean up ben­e­fit rolls to re­duce ad­min­is­tra­tive costs and im­prove tar­get­ing,” he added.

Re­gion­al pri­or­i­ties and pol­i­cy slip­page

Mean­while, Stephen de­liv­ered a sharp cri­tique of pol­i­cy ex­e­cu­tion across the re­gion, char­ac­ter­is­ing Cari­com so­cial safe­ty nets as well-in­ten­tioned on pa­per but con­sis­tent­ly un­der­mined by im­ple­men­ta­tion de­lays and shift­ing po­lit­i­cal agen­das.

Re­flect­ing on the gap be­tween pol­i­cy an­nounce­ments and on-the-ground out­comes, Stephen de­scribed the per­sis­tent slip­page as “rather dis­ap­point­ing, but from a so­cial as­pect... ex­pect­ed of Caribbean regimes.”

He not­ed that while so­cial pro­tec­tion ini­tia­tives are rou­tine­ly high­light­ed dur­ing an­nu­al bud­get pre­sen­ta­tions, their ac­tu­al de­liv­ery falls well short of ex­pec­ta­tions, ex­plain­ing that “so­cial pro­grammes tend to sound re­al­ly good, but they’re painful to say, and not much com­fort from them ac­tu­al­ly be­ing im­ple­ment­ed in a time­ly man­ner.”

Ac­cord­ing to Stephen, these de­lays stem from how in­di­vid­ual mem­ber states de­fine their im­me­di­ate eco­nom­ic and po­lit­i­cal pri­or­i­ties rather than es­tab­lish­ing re­al­is­tic im­ple­men­ta­tion tar­gets.

“Some­thing that con­sis­tent­ly hap­pens in Bar­ba­dos, con­sis­tent­ly hap­pens in Guyana, are [not] set to be re­al­is­tic to be­gin with, be­cause again, each coun­try has pri­or­i­ties,” he ob­served.

Il­lus­trat­ing these re­gion­al dis­par­i­ties, Stephen point­ed out how strate­gic choic­es dic­tate which sec­tors re­ceive swift ex­e­cu­tion and which face de­lays.

“Ja­maica pri­ori­tis­es agri­cul­ture, in a sense, over ed­u­ca­tion, rel­a­tive­ly, since it’s more po­lit­i­cal­ly ex­pe­di­ent to do so,” Stephen not­ed.

In con­trast, “Bar­ba­dos pri­ori­tis­es tourism—any time­line re­gard­ing tourism is al­ways met with speed.” How­ev­er, sec­ondary pri­or­i­ties in Bar­ba­dos, in­clud­ing ed­u­ca­tion, health­care, and broad­er so­cial as­sis­tance, en­counter re­cur­ring ad­min­is­tra­tive in­er­tia.

“Any­thing else that comes to this point must have an ap­pro­pri­ate so­cial safe­ty net, and sort of have time­line slip­page... they aren’t nec­es­sar­i­ly achieved in time­line.”

Stephen high­light­ed sim­i­lar trade-offs in T&T, where in­dus­tri­al and eco­nom­ic ven­tures take prece­dence over di­rect so­cial sup­port.

He not­ed that it is “clear that T&T pri­ori­tis­es cer­tain in­dus­tries, cer­tain ini­tia­tives by bud­get over wel­fare and so­cial, es­pe­cial­ly if just one or two could be im­ple­ment­ed with­in a year.”

The un­der­ly­ing is­sue, Stephen ar­gued, is en­trenched in the ide­o­log­i­cal and op­er­a­tional frame­work of re­gion­al gov­er­nance. “Truth­ful­ly, the dog­ma of some coun­tries—the way that some coun­tries op­er­ate—that comes up in how they pri­ori­tise,” he re­marked.

As a re­sult, crit­i­cal wel­fare ini­tia­tives are fre­quent­ly side­lined de­spite gov­ern­ments “pre­sum­ably hav­ing enough of a bud­get to ac­tion so­cial pro­grammes.”

Pol­i­cy roadmap for so­cial de­vel­op­ment

To rec­on­cile ris­ing un­em­ploy­ment fig­ures with fis­cal sus­tain­abil­i­ty in the in­com­ing bud­get, Seer­at­tan pre­sent­ed a four-point strate­gic roadmap for state so­cial re­form:

* The first pri­or­i­ty cen­tres on es­tab­lish­ing tar­get­ed tran­si­tion­al frame­works that of­fer tem­po­rary in­come-sup­port mech­a­nisms to pro­tect dis­placed work­ers and vul­ner­a­ble house­holds mi­grat­ing away from lega­cy pro­grammes like Cepep and URP in­to struc­tured em­ploy­ment funds;

* Sec­ond, the state must im­ple­ment di­rect ac­cess and out­reach in­ter­ven­tions for in­di­gent in­di­vid­u­als who qual­i­fy for state ben­e­fits but re­main ex­clud­ed due to doc­u­men­ta­tion bar­ri­ers or com­plex ap­pli­ca­tion pro­ce­dures.

* Third, gov­ern­ment pol­i­cy should ex­e­cute sys­tem­at­ic pro­gram ra­tio­nal­i­sa­tion and thresh­old ad­just­ments by con­sol­i­dat­ing over­lap­ping, small-scale so­cial ini­tia­tives in­to uni­fied pro­grams with high­er in­di­vid­ual ben­e­fit thresh­olds to re­duce ad­min­is­tra­tive du­pli­ca­tion; and

* Fourth, the ad­min­is­tra­tion must ac­cel­er­ate com­pre­hen­sive dig­i­tal­i­sa­tion and da­ta in­te­gra­tion across state agen­cies, de­ploy­ing cen­tralised dig­i­tal reg­istries and au­to­mat­ed com­pli­ance au­dit­ing to clean ben­e­fit rolls, elim­i­nate du­pli­cate claims, re­duce ad­min­is­tra­tive costs, and im­prove ben­e­fit tar­get­ing.

As Par­lia­ment pre­pares to de­bate the na­tion­al es­ti­mates, both econ­o­mists agree that the suc­cess of the bud­get will de­pend not on the to­tal amount of state spend­ing, but on how ef­fec­tive­ly fis­cal al­lo­ca­tions build hu­man cap­i­tal, in­cen­tivise pri­vate sec­tor ex­pan­sion, and dri­ve mea­sur­able so­cial de­vel­op­ment out­comes.