KEVON FELMINE

kevon.felmine@guardian.co.tt

While the Cen­tral Bank An­nu­al Eco­nom­ic Sur­vey, 2021, shows some im­prove­ment in eco­nom­ic ac­tiv­i­ty, econ­o­mist Dr Roger Ho­sein says peo­ple should not get car­ried away with the im­pres­sion that there was ma­jor growth.

As a guest on CNC3's The Morn­ing Brew Thurs­day, Ho­sein said the econ­o­my ap­peared more buoy­ant in 2021 be­cause 2020, when the COVID-19 pan­dem­ic hit, saw many busi­ness­es clos­ing down be­cause of re­stric­tions.

The Sur­vey re­vealed that dur­ing the first three quar­ters of 2021, labour pro­duc­tiv­i­ty in the non-en­er­gy sec­tor im­proved by 36.7 per cent, lead­ing to high­er pro­duc­tion lev­els and few­er hours worked. But Ho­sein said the true as­sess­ment was to look at 2021 in re­la­tion to 2019.

“If you have an econ­o­my with 100 stores and you close 40, then that would lead to a re­duc­tion in the lev­el of eco­nom­ic ac­tiv­i­ty in the coun­try. And if you move from 60 stores be­ing opened to 75 stores be­ing opened, then the lev­el of pro­duc­tion and lev­el of eco­nom­ic ac­tiv­i­ty would rise. So what we want to do is to dis­en­tan­gle them both,” Ho­sein said.

He said the mi­nor im­prove­ments should be an im­pe­tus to re­turn the econ­o­my to a path of growth at the lev­el it was in 2015. How­ev­er, as an oil and gas pro­duc­ing econ­o­my, dwin­dling nat­ur­al gas pro­duc­tion con­tin­ues to re­strain growth.

Ho­sein said nat­ur­al gas pro­duc­tion has to in­crease to boost out­puts of Liq­ue­fied Nat­ur­al Gas (LNG), methanol and am­mo­nia. While there was an in­crease in pro­duc­tion in the last two months, it was cer­tain­ly low­er than the peak in 2010. How­ev­er, Ho­sein said it could sup­port the needs of the glob­al econ­o­my.

Where T&T ben­e­fits great­ly are from the in­creased prices of LNG, am­mo­nia, na­tion­al gas and oil. Ho­sein said whether these high­er com­mod­i­ty prices would trick­le down to the com­mon man would be re­vealed in the mid-year rev­enue. He sus­pects the Gov­ern­ment would re­quest an ad­di­tion­al $3 bil­lion for ex­pen­di­ture.

“There is a lot of room for im­prove­ment, and one of the things that we want to keep our eyes on is the labour mar­ket be­cause the lat­est CSO fig­ure in­di­cates that the un­em­ploy­ment rate in the labour mar­ket in­creased to 5.7 per cent if I re­mem­ber cor­rect­ly. That was a 2020 num­ber. Who knows, to­day it could even be slight­ly high­er.”

Ho­sein said the Gov­ern­ment should keep mak­ing eco­nom­ic in­ter­ven­tions to keep the un­em­ploy­ment rate down. He said it should not just be about gen­er­at­ing em­ploy­ment but de­vel­op­ing ar­eas that gen­er­ate for­eign ex­change.

While the Russ­ian in­va­sion of Ukraine brought an in­crease in com­mod­i­ty prices, in­creas­ing the amount of for­eign ex­change T&T earns, there could be a day when they re­turn to 2018 lev­els.

If this hap­pens, Ho­sein said it is the pro­duc­tion side of the econ­o­my that will keep the coun­try pro­gress­ing. There­fore, it is im­por­tant to add fo­cus on non-en­er­gy pro­duc­ers that can earn for­eign ex­change.

Ho­sein said Min­is­ter of Trade and In­dus­try Paula Gopee-Scoon has to look at the num­ber of ar­eas with com­par­a­tive ad­van­tage for ex­port.

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