GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

Se­nior econ­o­mist and head of the De­part­ment of Eco­nom­ics at UWI St Au­gus­tine, Dr Daren Con­rad is cau­tion­ing that re­cent back­pay dis­burse­ments to pub­lic-sec­tor work­ers are un­like­ly to de­liv­er the eco­nom­ic up­lift many an­tic­i­pat­ed, cit­ing shaky con­sumer con­fi­dence, labour mar­ket dis­tor­tions, and wors­en­ing glob­al con­di­tions.

Speak­ing dur­ing a sem­i­nar ti­tled, "The Im­pact of Back­pay Promis­es on the Macro­econ­o­my" host­ed by UWI Trade and Eco­nom­ics De­part­ment which took place on Mon­day evening, Con­rad said al­though back­pay typ­i­cal­ly in­jects short-term liq­uid­i­ty in­to the econ­o­my, the cur­rent cli­mate of un­cer­tain­ty has mut­ed its im­pact.

"De­spite the back­pay, with high de­grees of un­cer­tain­ty about the fu­ture or low ex­pec­ta­tions, there will not be much im­pact at the macro­eco­nom­ic lev­el.

"Peo­ple are not will­ing to spend as freely as they would have, had they been cer­tain about the fu­ture. There are too many un­cer­tain­ties built in­to the sys­tem that we miss," he ex­plained.

He an­chored his analy­sis on the In­ter­na­tion­al Mon­e­tary Fund’s lat­est fi­nan­cial sta­bil­i­ty re­port, which warns that the glob­al out­look for 2026 re­mains frag­ile, with “storm clouds on the hori­zon.”

This, he ar­gued, un­der­mines op­ti­mism about T&T’s near-term prospects, de­spite some pos­i­tive in­di­ca­tors show­ing up in the da­ta.

Re­cent na­tion­al fig­ures, he not­ed, re­flect GDP growth of just over four per cent as of 2024, with out­put trend­ing up­ward.

How­ev­er, he stressed that these im­prove­ments must be viewed in con­text. While the macro­eco­nom­ic in­di­ca­tors are not bleak, they co­ex­ist with deep­er struc­tur­al is­sues—most no­tably, a rapid­ly de­clin­ing en­er­gy sec­tor.

“Oil and the en­er­gy sec­tor is de­clin­ing rapid­ly. The en­er­gy sec­tor is be­ing de­plet­ed,” he stat­ed.

An­oth­er crit­i­cal chal­lenge is the his­tor­i­cal­ly low labour force par­tic­i­pa­tion rate, which Con­rad said ini­tial­ly caused con­cern un­til re­gion­al pat­terns were ex­am­ined. Age­ing pop­u­la­tions and ris­ing re­tire­ment ages across the Caribbean, he not­ed, have de­pressed labour par­tic­i­pa­tion across the board.

Yet T&T’s con­sis­tent­ly low un­em­ploy­ment rate, while su­per­fi­cial­ly pos­i­tive, masks sig­nif­i­cant weak­ness­es.

Con­rad al­so ques­tioned the gov­ern­ment’s re­cent de­ci­sion to is­sue back pay at a time when the fis­cal po­si­tion re­mains strained.

While ac­knowl­edg­ing that work­ers nat­u­ral­ly wel­come retroac­tive pay­ments, he sug­gest­ed the tim­ing rais­es dif­fi­cult eco­nom­ic ques­tions.

"I ques­tion the tim­ing of the back pay at a time when we re­al­ly fis­cal­ly can­not af­ford it, and it's yield­ing no net pos­i­tive re­sults in terms of macro­eco­nom­ic per­for­mance. So it makes you won­der, what was the think­ing be­hind the back pay? Now, of course, every­one likes to get back pay, and then, of course, we're not see­ing that move­ment in the econ­o­my, the uptick in small busi­ness ac­tiv­i­ty," he added.

Min­is­ter of Plan­ning, Eco­nom­ic Af­fairs and De­vel­op­ment Kennedy Swarats­ingh, who al­so spoke, de­scribed the Gov­ern­ment’s move to de­liv­er back­pay to pub­lic sec­tor em­ploy­ees as “a de­ci­sive step for­ward” in strength­en­ing the liv­ing stan­dards of work­ing-class cit­i­zens and re­in­forc­ing the coun­try’s con­sti­tu­tion­al com­mit­ment to so­cial jus­tice.