Raphael John-Lall

Uni­ver­si­ty of the West In­dies (UWI) Pro­fes­sor of Eco­nom­ics, Roger Ho­sein is con­fi­dent that T&T can har­ness Venezue­lan labour and turn it in­to T&T’s next en­gine of growth.

In a state­ment to the Busi­ness Guardian, Ho­sein ex­plained how the tens of thou­sands of Venezue­lan mi­grants who live in T&T can help in­vig­o­rate T&T’s econ­o­my.

His state­ment comes at a time when the Gov­ern­ment has re­duced the num­ber of work per­mits for Venezue­lans who can work in T&T legal­ly and has stat­ed its in­ten­tion is to de­port hun­dreds of those who are in T&T il­le­gal­ly.

“T&T stands at a cross­roads. With the en­er­gy sec­tor in struc­tur­al de­cline and man­u­fac­tur­ing strug­gling to re­gain lost ground, the coun­try’s eco­nom­ic en­gine is sput­ter­ing be­low ca­pac­i­ty. Yet, amid this malaise lies an un­tapped op­por­tu­ni­ty hid­ing in plain sight, the tens of thou­sands of Venezue­lan mi­grants who have crossed the Gulf in search of eco­nom­ic sta­bil­i­ty. If man­aged strate­gi­cal­ly, this Venezue­lan in­flux could catal­yse a new phase of di­ver­si­fi­ca­tion and growth,” Ho­sein said.

He ar­gues that about half of the Venezue­lans work in the in­for­mal econ­o­my with­out any sort of pro­tec­tion.

“An es­ti­mat­ed 60,000 Venezue­lans now work in T&T, but on­ly a very lim­it­ed amount of them are reg­is­tered based on com­ments by var­i­ous ex­pert com­men­ta­tors. Of those em­ployed, rough­ly half work in the in­for­mal econ­o­my, with min­i­mal le­gal pro­tec­tion or so­cial in­sur­ance cov­er­age. Even among those in for­mal jobs, most work out­side reg­u­lat­ed frame­works mean­ing that a sig­nif­i­cant por­tion of the labour force op­er­ates in the shad­ows: pro­duc­tive, yes, but dis­con­nect­ed from tax­a­tion, train­ing, and for­mal sec­tor link­ages.”

Ho­sein is an ad­vo­cate of for­mal­is­ing all Venezue­lan mi­grants in T&T. He said new­ly ar­rived mi­grants tend to ex­hib­it ex­cep­tion­al work dis­ci­pline, be­ing three times less like­ly to be ab­sent from work than na­tive em­ploy­ees, large­ly be­cause they must prove their val­ue and over­come bar­ri­ers of lan­guage and recog­ni­tion.

He re­ferred to the Unit­ed King­dom’s Na­tion­al In­sti­tute for Eco­nom­ic and So­cial Re­search (NIESR), which adds an­oth­er lay­er of in­sight: mi­grant labour rarely dis­places na­tives, in­stead, it com­ple­ments them, en­hanc­ing firm flex­i­bil­i­ty, pro­duc­tiv­i­ty and spe­cial­i­sa­tion.

“Yet, cur­rent pol­i­cy has failed to cap­ture these ben­e­fits. Ba­sic es­ti­mates show that in 2024, the im­port-sub­sti­tut­ing (MS) sec­tor would have been 7.2 per cent small­er, the non-en­er­gy ex­port (NEX) sec­tor 0.6 per cent small­er, and the non-trad­able (NT) sec­tor 3 per cent small­er with­out Venezue­lan work­ers (based on the as­sump­tion that 16,000 Venezue­lans are reg­is­tered as was the case in 2019 and us­ing da­ta from the In­ter­na­tion­al Or­ga­ni­za­tion for Mi­gra­tion’s (IOM) da­ta-track­ing ma­trix to de­ter­mine how much peo­ple are work­ing in the MS, im­port sub­sti­tut­ing, NEX, non en­er­gy ex­ports and NT: non trade­able sec­tors).

“The da­ta un­der­score their con­tri­bu­tion to out­put, par­tic­u­lar­ly in dis­tri­b­u­tion, re­tail, and house­hold ser­vices.”

Mi­grants must work in pro­duc­tive sec­tors

Ho­sein spoke about the trad­able and non-trad­able sec­tors.

The trad­able sec­tor refers to in­dus­tries whose goods and ser­vices can be sold and con­sumed across na­tion­al bor­ders such as man­u­fac­tur­ing, agri­cul­ture and cer­tain types of ser­vices.

In con­trast, non-trad­able goods and ser­vices can on­ly be bought and con­sumed where they are pro­duced.

To put it sim­ply, the econ­o­mist ar­gues Venezue­lan mi­grants in T&T are work­ing in the wrong sec­tors.

“The IOM da­ta high­lights a struc­tur­al prob­lem: most of these mi­grants are con­cen­trat­ed in non-trad­able ac­tiv­i­ties, where val­ue-added and ex­port link­ages are min­i­mal. This im­bal­ance lies at the heart of a deep­er struc­tur­al dis­tor­tion best ex­plained through the Ry­bczyn­s­ki mech­a­nism. When im­mi­grant labour ex­pands dis­pro­por­tion­ate­ly and much of it re­mains un­reg­is­tered, the re­al­lo­ca­tion of re­sources favours low skill, labour-in­ten­sive ac­tiv­i­ties at the ex­pense of cap­i­tal-and tech­nol­o­gy dri­ven sec­tors.”

He added that the in­flow of un­reg­is­tered Venezue­lan work­ers has there­fore re­shaped not on­ly the em­ploy­ment land­scape, but al­so the pro­duc­tive struc­ture of the econ­o­my. Be­cause most of this labour op­er­ates in in­for­mal, low-wage sec­tors, it adds lit­tle to cap­i­tal for­ma­tion, in­no­va­tion or pro­duc­tiv­i­ty growth.

He al­so said more specif­i­cal­ly a rise in in­for­mal, low-wage em­ploy­ment in non- trad­ables such as do­mes­tic ser­vices and pet­ty com­merce does not sim­ply ab­sorb ex­cess labour, it en­cour­ages a redi­rect­ing of cap­i­tal and en­tre­pre­neur­ship away from man­u­fac­tur­ing and ex­ports. In­vestors and busi­ness own­ers fol­low the eas­i­er prof­its in ser­vice dis­tri­b­u­tion and re­tail rather than in­vest­ing in plant, equip­ment or ex­ports.

The re­sult is a slow burn ver­sion of the “Dutch Dis­ease,” where an abun­dance of un­reg­u­lat­ed labour, in­stead of oil rents, crowds out the pro­duc­tive base of the econ­o­my, he added.

“To neu­tralise this per­verse dy­nam­ic, the for­mal­i­sa­tion of the Venezue­lans work­ing in T&T is not op­tion­al; it is es­sen­tial. The State must de­sign a sys­tem that brings mi­grant work­ers un­der reg­u­lat­ed em­ploy­ment, tax­es, and train­ing frame­works trans­form­ing an un­priced ex­ter­nal­i­ty in­to a growth in­put. One pol­i­cy op­tion is a struc­tured work per­mit frame­work, which chan­nels mi­grants to­ward labour scarce, high-pro­duc­tiv­i­ty sec­tors such as man­u­fac­tur­ing and agro-pro­cess­ing.”

T&T’s man­u­fac­tur­ing sec­tor pro­vides a clear case in point, he said.

The ca­pac­i­ty util­i­sa­tion rate mea­sures the per­cent­age of an or­gan­i­sa­tion’s po­ten­tial out­put that is ac­tu­al­ly be­ing re­alised. The ca­pac­i­ty util­i­sa­tion rate of a com­pa­ny or a na­tion­al econ­o­my may be mea­sured in or­der to pro­vide in­sight in­to how well it is reach­ing its po­ten­tial.

He point­ed out that be­tween 2014 and 2023, ca­pac­i­ty util­i­sa­tion slipped from 70 per cent to 64.1 per cent, while em­ploy­ment fell from 50,400 to 39,800 in 2024.

He said the fol­low­ing sim­u­la­tion il­lus­trates the po­ten­tial and where the mi­grants could be placed.

“If all 60,000 mi­grants were reg­u­larised and reg­is­tered and their em­ploy­ment re­dis­trib­uted, 25 per cent in man­u­fac­tur­ing, 50 per cent in non-en­er­gy ex­ports, and 25 per cent in non-trad­ables (as com­pared to the cur­rent sit­u­a­tion where it is dis­trib­uted 89 per cent in NT, 5 per cent in NEX and 6 per cent in MS), re­al out­put in the non-en­er­gy ex­port sec­tor could rise to over $21.7 bil­lion, while out­put in the im­port sub­sti­tut­ing sec­tor (treat­ed here as do­mes­tic agri­cul­ture) would ex­ceed $990 mil­lion. The non-trad­able sec­tor would de­cline from $99.2 bil­lion to $92 bil­lion. The as­sump­tion is that the sec­tors can em­ploy the new as­signed em­ploy­ment num­bers.”

He sug­gest­ed a com­ple­men­tary in­no­va­tion could be the cre­ation of a PLEA pass­port, a na­tion­al cre­den­tialling sys­tem mod­elled on the En­er­gy Cham­ber’s cer­ti­fi­ca­tion frame­work. This sys­tem would for­mal­ly ver­i­fy mi­grants’ skills, match them to do­mes­tic labour short­ages, and en­sure com­pli­ance with labour reg­u­la­tions. It would al­so al­low firms to plan around a pre­dictable, cer­ti­fied mi­grant work­force, re­duc­ing the risks as­so­ci­at­ed with in­for­mal­i­ty and labour mar­ket un­cer­tain­ty.

In prac­tice, the PLEA pass­port could serve three strate­gic goals:

1. Raise pro­duc­tiv­i­ty by align­ing mi­grant labour with in­dus­tri­al de­mand, es­pe­cial­ly in man­u­fac­tur­ing and agri­cul­ture.

2. Re­duce in­for­mal­i­ty by in­cen­tivis­ing reg­is­tra­tion and of­fer­ing le­gal work sta­tus in ex­change for com­pli­ance.

3. En­hance ex­ter­nal com­pet­i­tive­ness by grow­ing ex­port-ori­ent­ed em­ploy­ment.

Giv­en T&T’s age­ing pop­u­la­tion, he said a young mi­grant work­force world off­set T&T’s de­clin­ing labour force.

“Mi­grants are young and eco­nom­i­cal­ly ac­tive and 44.5 per cent are aged 25-34, com­pared to a lo­cal work­force that is ag­ing rapid­ly. Prop­er­ly in­te­grat­ed, this de­mo­graph­ic shift could off­set T&T’s de­clin­ing labour force par­tic­i­pa­tion rate and in­ject dy­namism in­to sec­tors starved of new en­trants.”

He con­clud­ed by say­ing that as en­er­gy rev­enues wane, the Venezue­lan work­force of­fers a pos­si­ble lever for eco­nom­ic trans­for­ma­tion, pro­vid­ed pol­i­cy­mak­ers have the vi­sion to see be­yond short-term pol­i­tics and recog­nise the long-term arith­metic of in­clu­sive growth.

“The path for­ward lies not in clos­ing the door, but in open­ing it in­tel­li­gent­ly.”