Senior Reporter
geisha.kowlessar@guardian.co.tt
Trinidad and Tobago risks social upheaval if economic transformation leaves large sections of the population behind, economist Dr Ralph Henry has warned.
Henry said growing inequality, low labour force participation and inadequate support for displaced workers could undermine social cohesion. Drawing parallels with unrest in 1937, 1970 and 1990, he said economic restructuring must create opportunities for ordinary citizens, not just growth on paper.
“We cannot ignore the issue of conditional transfers because we have to deal with the poor, because the economy is still going through structural transformation. Some people are hard done by the transformation process, and short-term employment has to be supported to ensure social cohesion. Otherwise, we can have situations that we have had before, as in 1937, 1970 and 1990,” Henry said.
“This is a very explosive country, and if people feel that the distribution of income is working against them, that all the structures are working against them, we never know where the explosion might come from.”
He was speaking at a pre-budget forum hosted by the University of the West Indies, St Augustine, on Wednesday.
Henry said the country’s immediate priorities should include strengthening technical and vocational education and training, modernising infrastructure and improving public services to boost productivity and competitiveness.
“This is where a lot of productivity issues have to be addressed,” he said.
He also called for better economic data and monitoring systems to support policymaking. Routine wage and productivity dashboards, he suggested, could inform discussions among employers, labour representatives and the State.
Henry said competitiveness remained central to economic diversification, which would require a workforce capable of producing goods and services for international markets.
“The issue of competitiveness has always been there,” he said. “One has to always be concerned with the border price of labour, which would allow us to produce goods and services that could be competitive in the international economy.”
Henry also pointed to concerning labour market trends. While unemployment has risen in recent years, labour force participation has fallen from about 65 per cent more than a decade ago to roughly 55 per cent in 2025.
“The question is, where is this happening?” he asked.
He suggested that some people may be earning incomes in the informal and underground economies, outside formal employment channels.
“My hypothesis is that we have a huge underground economy and people might not be working or looking for work or registering for work, but they putting down rock,” he said, linking illegal economic activity to crime, drugs and guns.
Finance Minister Davendranath Tancoo did not respond to questions about Henry’s comments or when the Government would unveil its fiscal package.
Former finance minister Professor Winston Dookeran said policymakers should focus on development rather than simply pursuing higher growth rates.
“The issue that now emerges on the scene is the issue of development as opposed to growth,” he said. “You can have high growth and low development. You can therefore end up with underdevelopment rather than high and persistent levels of development.”
Dookeran said the challenge was to find a growth path that could deliver sustainable progress while improving citizens’ welfare.
“What is the warranted growth path of the country’s economy? What is the growth path that will create a high-level equilibrium?” he asked.
He said growth should be measured not only by GDP, but also by savings, investment, productivity and “endogenous growth”—growth that builds both the economy and people’s capabilities.
Dookeran also stressed the importance of social inclusion, arguing that traditional approaches centred on government spending had not adequately addressed inequality and vulnerability.
“It is not a question any more of expenditure generating benefits. That thesis has been thrown out by experience,” he said.
He suggested that the National Insurance Scheme could become the basis of a revamped social security institution, incorporating workers, self-employed people and vulnerable groups into a stronger support system.
Energy Chamber executive member Hafiz Ali urged policymakers to look beyond current energy constraints and prepare for future opportunities.
Ali said oil production had fallen from about 220,000 barrels per day in 1977 to about 50,000 in 2024. Despite the decline, he said, energy would remain central to the country’s economic future.
“Energy will be the cornerstone of the economy of Trinidad and Tobago in the next decade and beyond,” he said.
