It should be standard operating practice to review the key challenges likely to emerge in the short (one year), medium (three years), and long term, and to devise strategies that would allow us to progress and grow. The future is determined by what we do in the present. Whilst it is impossible to avoid making mistakes, one should always try to minimise them.
In January 2025, this column suggested that President Donald Trump’s second presidential term would continue “the reversal of the long-standing movement to free trade led by the USA” and concluded that “the liberal world order of freer trade appears to be over.” It noted that the increased geopolitical tension “will impact T&T’s initiative to access Venezuela gas.” It noted that although the wars have continued, energy prices had fallen to “a more normal level” with negative consequences on the government’s expenditure capacity. This outlook became a reality in 2025.
Whilst a different political party forms the governing administration, Trinidad and Tobago’s objective facts and development challenges remain unchanged. The fiscal weaknesses identified in Colm Imbert’s affidavit of June 3, 2024, remain uncorrected. The government is spending more than it collects in tax revenues. Consequently, its debt-to-GDP ratio is rising unsustainably, its diversification efforts are limited, and its foreign exchange reserves are declining rapidly. The decision by rating agency Moody’s to downgrade Trinidad and Tobago’s outlook to negative is a clear indication that 2026 will be challenging.
Trump’s tariffs had a limited effect on global economic growth, though China’s trade surplus reached a record USD 1.2 trillion. World economic growth is expected to decline marginally in 2026 compared to 2025. Natural gas remains the key economic driver, accounting for 80-90 per cent of foreign exchange earnings. Whilst production has stabilised, even if it grows, it is insufficient to keep all the Pt Lisas plants open or the gas liquefaction plants operating at full capacity. The fight with Nutrient is not about port fees. That is a US$20 million distraction. The real fight is about a long-term contract for sufficient gas to keep the plant operating profitably and surviving weak energy prices.
The key point is that T&T is a mature hydrocarbon province and must drill exploration wells continuously to maintain output. Output has been falling continuously since 2013, with a short spurt from Angelin and Juniper. Much is expected of the new Exxon exploration effort, but the usual caveat about putting all our eggs in one basket applies. Similarly, recent events in Venezuela may delay the commissioning of the Manatee project.
Whilst President Maduro has been extracted from Venezuela by US special forces, the regime remains intact, with Delcy Rodríguez (who indicated that contracts and agreements with T&T were ended because of T&T cooperating with the USA) as the new President. President Trump’s press secretary reports that the Venezuelan regime is cooperating with Washington. But it is too soon to tell whether this “cooperation” will extend to T&T interests. Even if Venezuela reinstates its agreement and the Manatee field pans out, it is not a game-changer. Accessing gas from the Manatee field amounts to only a holding operation, as its daily production is insufficient to reopen the closed Pt Lisas plants.
Whilst there is still more oil and gas to be discovered in T&T, the responses of US oil executives to President Trump’s requests to invest in Venezuela should remind us that investment is based on comparable returns. ExxonMobil’s CEO dismissed Venezuela as “uninvestable”. Currently, oil is plentiful on the international market and therefore relatively cheap, as OPEC members cannot agree to reduce output. No one will invest in a country if returns from other countries are better.
This implies that diversification efforts must be intensified. However, even with “quick” short-term wins, replacing the energy sector requires much work and investment. The gap between energy and non-energy exports is significant. The numbers suggest that T&T non-energy exports amounted to TT$16 billion in 2025, compared to TT$70 billion in energy exports. Since most inputs for non-energy exports are imported, narrowing the gap requires significant investment and substantial foreign exchange. Access to foreign exchange will be a critical concern for most non-energy sector businesses in 2026.
The Minister of Trade, Investment, and Tourism, announced ambitious targets to boost non-energy exports by US$2 billion (TT$13.6 billion) in two years and US$5 billion (TT$34 billion) within five years, part of a national strategy to diversify the economy beyond oil and gas, focusing on manufacturing and services with strong private sector collaboration. This means that those sectors must grow by 300 per cent in five years, which is unrealistic. In 15 years, perhaps, if the relevant investment decisions are made in the next two years.
To earn more foreign exchange, the country must be more competitive internationally. That means improving productivity. Improving productivity means we must work harder and adjust the capital-to-labour ratio. This cannot happen overnight and therefore requires measured progress. It also means that the nature of labour relations and the basis of wage negotiations must change to be based on productivity gains.
Accessing capital and improving the climate for additional foreign investment in areas outside of the energy sector requires significant policy changes and improvements in the enabling environment.
Mariano Browne is the Chief Executive Officer of the UWI Arthur Lok Jack Global School of Business.
