The US Federal Reserve chairman Jerome Powell said in a 60-minute interview that a recovery won’t happen until the end of 2021. He expect US GDP to shrink in the second quarter around 30 per cent and unemployment to around 25 per cent. These numbers are similar or worst than the Great Depression but Jerome Powell said it will not be a depression. Fishermen do not say that their fish is stink. The situation is likely worst than the process.
The question is what is Trinidad and Tobago (T&T) going to do in this new global economic crisis triggered by COVID-19? Canada , Japan and Europe are also in recession. These countries are integral to global trade and global tourism.
A big part of T&T’s economy is oil and gas (almost 80 per cent of exports). But that will be anaemic for at least a year. A contingency plan is needed to strive in these challenging times. Based on many economist analysis, there will be deflation and later inflation.
The best strategy must include agriculture and agroprocessing because the cost of food will increase and supply of food is projected to decrease.
Secondly, Japan, China, US, UK and Europe have been creating over $9 trillion. This will lead to currency volatility. The US currency will after rising, devalue. It happened after the 2008 financial crisis but it will be greater since the quantitative easing is much greater. The Central Bank of T&T should buy precious metals ( gold and silver) for security.
The cold war between China and the US will heat up. Besides trade war, international diplomatic war, corporate sabotage and cyber war is likely.
T&T neutrality is unlikely but choosing any side will have serious repercussion. What is T&T going to do? Borrowing will lead to the IMF and compromise T&T sovereignty.