GEISHA KOW­LESSAR-ALON­ZO

Se­nior Re­porter

geisha.kow­lessar@guardian.co.tt

Econ­o­mists are urg­ing Gov­ern­ment to pri­ori­tise crit­i­cal na­tion­al chal­lenges in the 2026 Bud­get, in­clud­ing crime re­duc­tion, ed­u­ca­tion re­form, agri­cul­tur­al re­vi­tal­i­sa­tion, tourism de­vel­op­ment, and the ur­gent re­struc­tur­ing of the Na­tion­al In­sur­ance Scheme (NIS).

They said these ar­eas are seen as piv­otal to restor­ing eco­nom­ic sta­bil­i­ty, en­hanc­ing so­cial re­silience, and se­cur­ing long-term eco­nom­ic sus­tain­abil­i­ty for the coun­try.

The fis­cal back­drop for the up­com­ing fis­cal pre­sen­ta­tion is sober­ing.

In mid-2025, Stan­dard & Poor’s down­grad­ed the na­tion’s eco­nom­ic out­look from sta­ble to neg­a­tive, cit­ing struc­tur­al vul­ner­a­bil­i­ties and slug­gish re­form mo­men­tum. Com­pound­ing this, the Cen­tral Bank re­port­ed a 2.1 per cent con­trac­tion in GDP for the first quar­ter of 2025, with de­clines record­ed across both the en­er­gy and non-en­er­gy sec­tors—a clear sig­nal that the econ­o­my is un­der strain.

In Sep­tem­ber, Fi­nance Min­is­ter Dav­en­dranath Tan­coo cau­tioned the pub­lic to “ta­per” ex­pec­ta­tions, not­ing that gov­ern­ment promis­es would be de­liv­ered over a five-year pe­ri­od rather than all at once and that the bud­get would like­ly re­sult in a fis­cal deficit.

The 2025 Bud­get was based on an oil price of US$77.80 per bar­rel, which was con­sid­ered op­ti­mistic at the time, giv­en glob­al mar­ket soft­en­ing.

Guardian Me­dia reached out to Dr Vaalmik­ki Ar­joon and In­dera Sage­wan, who shared their per­spec­tives on the up­com­ing fis­cal pre­sen­ta­tion.

Ar­joon be­lieves ed­u­ca­tion, na­tion­al se­cu­ri­ty, and health would “al­most cer­tain­ly” com­mand the high­est al­lo­ca­tions.

“Ed­u­ca­tion an­chors our hu­man cap­i­tal agen­da, which is key for a more di­ver­si­fied, tech­nol­o­gy-dri­ven econ­o­my. Health will con­tin­ue to ab­sorb sig­nif­i­cant re­sources due to chron­ic-care bur­dens, wait­ing lists, and the need to re­place age­ing equip­ment and ex­pand di­ag­nos­tics. On na­tion­al se­cu­ri­ty, in­vest­ment in crime re­duc­tion, bor­der con­trol tech­nolo­gies, and in­tel­li­gence ser­vices is in­dis­pens­able to safe­guard cit­i­zens and en­cour­age in­vest­ment,” he ex­plained.

Greater pri­or­i­ty may al­so be placed on cap­i­tal ex­pen­di­ture, the most pro­duc­tive form of state spend­ing, which was large­ly un­der­fund­ed from 2016 to 2024, av­er­ag­ing on­ly $3.75 bil­lion an­nu­al­ly, Ar­joon added.

“In­creas­ing this al­lo­ca­tion redi­rects re­sources to­ward high-mul­ti­pli­er in­vest­ments–ex­pand­ing port in­fra­struc­ture, agro-pro­cess­ing ca­pac­i­ty, dig­i­tal pub­lic ser­vices, and up­grad­ing trans­port and ur­ban in­fra­struc­ture to un­lock pri­vate sec­tor pro­duc­tiv­i­ty,” he fur­ther ex­plained.

By strength­en­ing these growth en­gines, Ar­joon said, the bud­get could stim­u­late wider busi­ness ac­tiv­i­ty and gen­er­ate high­er rev­enues from tax­es on in­come and prof­its, which ac­count for over 60 per cent of gov­ern­ment rev­enue, and ul­ti­mate­ly po­si­tion the econ­o­my to close the fis­cal gap with­in a few years.

To help plug gaps in tax col­lec­tion, Gov­ern­ment could al­so con­sid­er in­tro­duc­ing a sys­tem of e-in­voic­ing, which would record all busi­ness trans­ac­tions dig­i­tal­ly in re­al time, Ar­joon said, adding that this would im­prove tax com­pli­ance, es­pe­cial­ly for VAT and cor­po­ra­tion tax­es, as it re­duces un­der­re­port­ing by giv­ing the BIR in­stant ac­cess to ac­cu­rate sales da­ta.

On the rev­enue side, Ar­joon pre­dict­ed the oil price for 2026 may range be­tween US$55 and $60 per bar­rel.

This takes in­to ac­count like­ly OPEC+ pro­duc­tion in­creas­es, glob­al sup­ply growth, and in­ven­to­ry build-ups, as well as pos­si­ble un­cer­tain­ty and con­trac­tion in trade re­sult­ing from US tar­iff ac­tions. The gas price should be in the $4.50 to $5 range, al­so due to in­creased sup­ply from the US, Qatar, and Cana­da in 2026 and trade un­cer­tain­ties.

In his mid-year re­view, the Min­is­ter of Fi­nance ad­just­ed the oil and gas prices to US$66 and US$5 per mmb­tu, re­spec­tive­ly.

Tan­coo may al­so tar­get spend­ing in high-im­pact sec­tors such as agri­cul­ture and tourism, align­ing with the ad­min­is­tra­tion’s broad­er goals of eco­nom­ic trans­for­ma­tion.

Sage­wan: Fo­cus on agro-pro­cess­ing

Agro-pro­cess­ing of­fers a com­pelling val­ue propo­si­tion for Trinidad and To­ba­go’s eco­nom­ic trans­for­ma­tion.

Sage­wan ad­vised that by fo­cus­ing on this sec­tor, the coun­try can si­mul­ta­ne­ous­ly pur­sue two crit­i­cal ob­jec­tives:

• Ex­port Ex­pan­sion: Agro-pro­cess­ing cre­ates a path­way for pro­duc­ing val­ue-added goods for in­ter­na­tion­al mar­kets, there­by ini­ti­at­ing a sus­tain­able stream of for­eign ex­change earn­ings.

• Food Im­port Re­duc­tion: With strate­gic re­source al­lo­ca­tion and pol­i­cy sup­port, agri­cul­ture can rapid­ly im­pact the na­tion’s high food im­port bill.

Tourism re­mains one of the most ac­ces­si­ble and im­me­di­ate av­enues for for­eign ex­change in­flows.

Its eco­nom­ic foot­print ex­tends far be­yond ho­tel rev­enues, touch­ing every lay­er of so­ci­ety.

“It is one of the low­est-hang­ing fruits that can al­low us to earn for­eign ex­change that fil­ters through­out the so­ci­ety from the very point where the tourist lands in the air­port or the port, be­cause the taxi dri­vers, the tour op­er­a­tors, the shops, and the small kiosks where peo­ple sell their sou­venirs–all of these peo­ple will ben­e­fit im­me­di­ate­ly from the for­eign ex­change that can flow and cir­cu­late in the econ­o­my,” she added.

Re­struc­tur­ing NIS

The Fi­nance Min­is­ter is un­der pres­sure to mod­ernise out­dat­ed sys­tems such as the NIS run by the Na­tion­al In­sur­ance Board (NIB), which has been flagged as fi­nan­cial­ly strained.

The 11th ac­tu­ar­i­al re­port on the NIB, which was re­cent­ly made pub­lic, sug­gest­ed that with­out in­ter­ven­tion, the NIS fund is un­sus­tain­able, with as­sets due to be ex­haust­ed by 2033 to 2034 due to an age­ing pop­u­la­tion pro­file.

On Sep­tem­ber 25, it was re­port­ed in the me­dia that Tan­coo promised to speak about the state of the NIS. The min­is­ter was al­so re­port­ed as say­ing that he was con­fi­dent the prob­lem was iden­ti­fied.

Econ­o­mist and a for­mer deputy gov­er­nor of the Cen­tral Bank Dr Ter­rence Far­rell not­ed that his­tor­i­cal­ly, po­lit­i­cal ac­tors have in­flu­enced NIS de­ci­sions, of­ten in­creas­ing ben­e­fits with­out ad­just­ing con­tri­bu­tion rates.

He added that while such moves may win short-term pub­lic ap­proval, they un­der­mine the sys­tem’s long-term vi­a­bil­i­ty.

“In the past, our politi­cians have got­ten in­volved in in­flu­enc­ing the de­ci­sions on the na­tion­al in­sur­ance sys­tem, and we are now pay­ing the price for that be­cause the NIS is look­ing at a sit­u­a­tion of po­ten­tial in­sol­ven­cy,” Far­rell ex­plained.

The 2025 Bud­get for T&T, pre­sent­ed on Sep­tem­ber 30, 2024, out­lined a pro­ject­ed deficit of $5.517 bil­lion, with to­tal ex­pen­di­tures of $59.741 bil­lion and rev­enues of $54.224 bil­lion.

Ed­u­ca­tion-$7.512B

Health-$7.571B

Na­tion­al Se­cu­ri­ty-$6.113B

Pub­lic Util­i­ties-$3.221B

In­fra­struc­ture-$1.862B

Rur­al De­vel­op­ment & Lo­cal Govt-$1.771B

Trans­port-$1.410B

Agri­cul­ture-$1.184B

Hous­ing-$750M