Po­lit­i­cal par­ties are elect­ed to im­prove on their pre­de­ces­sors’ per­for­mance. Po­lit­i­cal cam­paigns iden­ti­fy the weak­ness­es and fail­ures of the ex­ist­ing gov­ern­ment and promise to im­prove on that per­for­mance by set­ting out the pri­or­i­ties they will ad­dress. The as­sump­tion is ei­ther that there are suf­fi­cient re­sources to ful­fil those promis­es or that the new gov­ern­ment has peo­ple with the rel­e­vant skills and ex­per­tise to make the nec­es­sary changes.

The re­al­i­ty is that avail­able re­sources are al­ways scarce and shaped by eco­nom­ic con­di­tions. That is why an Amer­i­can po­lit­i­cal strate­gist coined the phrase “It’s the econ­o­my, stu­pid,” mean­ing that fi­nan­cial well-be­ing is the sin­gle most im­por­tant fac­tor de­ter­min­ing how peo­ple vote or re­spond to a gov­ern­ment. It em­pha­sis­es that vot­ers ul­ti­mate­ly care most about jobs, wages, and their per­son­al cost of liv­ing, out­weigh­ing all oth­er po­lit­i­cal or so­cial de­bates.

The PNM as­sumed of­fice in 2015, fac­ing weak en­er­gy prices and de­clin­ing nat­ur­al gas pro­duc­tion. The ad­min­is­tra­tion in­ter­pret­ed its key task as sur­viv­ing, keep­ing things tick­ing over un­til the en­er­gy sec­tor re­vived. Apart from the brief respite in 2022 and 2023 when the war in Ukraine raised en­er­gy prices, par­tic­u­lar­ly the price of am­mo­nia, that boom nev­er came. The PNM ad­min­is­tra­tion sought to raise tax­es, where pos­si­ble, from those best able to pay (those earn­ing $1 mil­lion and above), with pe­ri­od­ic dips in­to the Her­itage and Sta­bil­i­sa­tion Fund, whilst man­ag­ing pub­lic ex­pen­di­ture to pro­vide the prover­bial soft land­ing. Mean­while, for­eign ex­change out­flows con­tin­ued, and the for­eign re­serves fell.

The re­sult was con­tin­ued deficit fi­nanc­ing and in­creased bor­row­ing, there­by rais­ing the na­tion­al debt, for­eign and lo­cal, to un­prece­dent­ed lev­els, with a cor­re­spond­ing de­cline in the coun­try’s in­ter­na­tion­al cred­it rat­ings. Crit­i­cal de­ci­sions, such as deal­ing with the long-de­layed pub­lic-sec­tor ne­go­ti­a­tions, cre­at­ed dis­sat­is­fac­tion which was easy to ex­ploit. It al­so failed to find mech­a­nisms to grow the econ­o­my be­yond the Man­a­tee and Drag­on nat­ur­al project. The clo­sure of the Petrotrin Re­fin­ery and the in­crease in the mur­der rate, with lit­tle im­prove­ment in the de­tec­tion rate, added to pub­lic dis­sat­is­fac­tion. The ad­min­is­tra­tion found it­self in cog­ni­tive dis­so­nance, con­tin­u­ous­ly promis­ing a boom whilst try­ing to ex­plain its ex­pen­di­ture con­straints.

The UNC cap­i­talised on the grow­ing pub­lic dis­sat­is­fac­tion, par­tic­u­lar­ly among pub­lic ser­vants who had been forced to en­dure 12 years (four ne­go­ti­a­tion pe­ri­ods) with­out salary in­creas­es, while in­fla­tion erod­ed their buy­ing pow­er. This did not com­pare well with the salary in­creas­es award­ed to min­is­ters and se­nior pub­lic ser­vants. How­ev­er, the eco­nom­ic re­al­i­ty had not changed: nat­ur­al gas pro­duc­tion was still de­clin­ing; the like­ly sav­iours, Man­a­tee, were still one year away, and the Drag­on project was still un­set­tled.

The Re­vi­tal­i­sa­tion Blue­print fo­cus­es on the con­struc­tion sec­tor and re­lies on for­eign pri­vate-sec­tor in­vest­ment. The tar­get­ed source of these funds was the Gulf States. Since the ini­tial out­reach to po­ten­tial in­vestors from these coun­tries, the war in the Gulf may have af­fect­ed their abil­i­ty to in­vest in these projects or changed their in­vest­ment ap­petite, if not pri­or­i­ties. Many of these states have suf­fered tremen­dous in­fra­struc­ture dam­age, which will re­quire re­con­struc­tion. How the hos­til­i­ties in the Gulf will end is yet un­set­tled and will af­fect the sums like­ly to be di­rect­ed to our mar­ket.

The oth­er area of fo­cus is the Min­istry of Trade, In­dus­try and Tourism’s di­ver­si­fi­ca­tion plans. In a pub­lic pre­sen­ta­tion at the Hy­att on May 27th, the min­is­ter iden­ti­fied sev­er­al strate­gic ob­jec­tives that are meant to “un­lock Trinidad and To­ba­go’s non-en­er­gy eco­nom­ic po­ten­tial.” The pur­pose is to achieve sus­tained in­vest­ment to fa­cil­i­tate eco­nom­ic growth and di­ver­si­fi­ca­tion by im­prov­ing the ease of do­ing busi­ness, im­prov­ing the qual­i­ty of na­tion­al goods and ser­vices, and es­tab­lish­ing “a na­tion­al tone that Trinidad and To­ba­go is open for busi­ness”.

The spe­cif­ic ob­jec­tives are to in­crease non-en­er­gy ex­ports to USD 2 bil­lion in 2027 and USD 5 bil­lion by 2030, and to dou­ble tourism’s con­tri­bu­tion from 6% to 12% of GDP by 2030, rep­re­sent­ing USD 1.7 bil­lion in eco­nom­ic val­ue. These ini­tia­tives are sup­port­ed by a na­tion­al tar­get of US$3 bil­lion in new in­vest­ments by May 2027. Avail­able CSO da­ta does not al­low a mean­ing­ful as­sess­ment of these tar­gets. Con­fi­dence sur­veys sug­gest that the busi­ness sec­tor re­mains op­ti­mistic. Last week, in­ter­na­tion­al rat­ing agency Moody’s up­grad­ed Trinidad and To­ba­go’s out­look from Neg­a­tive to Sta­ble, cit­ing stronger ex­ter­nal prospects, pre­sum­ably due to the in­crease in en­er­gy prices.

Ad­vance in­for­ma­tion on the 2026 Mid-Year bud­get re­view sug­gests that the deficit will in­crease by $2.9 bil­lion. This is mod­est, as the orig­i­nal bud­get es­ti­mates did not in­clude the $6.8 bil­lion in back pay owed to pub­lic sec­tor em­ploy­ees for the pe­ri­od 2014-19. The con­cern is that these un­paid amounts are be­ing pushed in­to 2027 on the pre­sump­tion that the en­er­gy sec­tor’s rev­enue out­look will be bet­ter.

The key point is that the fi­nance min­is­ter’s re­al­i­ty is broad­ly sim­i­lar to that faced by for­mer min­is­ter Im­bert. BPTT Man­akin/Couci­na is not at the drilling stage. Exxon’s drilling cam­paign is still in the mo­bil­i­sa­tion stage. There has been no fi­nal in­vest­ment de­ci­sion on Wood­side’s Ca­lyp­so project. Fur­ther, Shell is en­ti­tled to ac­cel­er­at­ed cost re­cov­ery on Man­a­tee’s rev­enues. Al­so, many petro­chem­i­cal plants re­main idled, lim­it­ing the up­side po­ten­tial of any en­er­gy price in­creas­es.

Pub­lic sec­tor ne­go­ti­a­tions for the 2020-2025 pe­ri­od are still to come and for­eign ex­change short­ages re­main a fact.

Mar­i­ano Browne is the Chief Ex­ec­u­tive Of­fi­cer of the UWI Arthur Lok Jack Glob­al School of Busi­ness