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Trinidad & Tobago is an unusual outpost in the western hemisphere—despite being a small country, it has a throbbing economy and has considerable influence in its neighbourhood. While its Caribbean and South American neighbours flit between free market policies and socialist models, T&T has been remarkably stable and the Government is totally focussed on taking the economy further.
So when you think of Trinidad and Tobago and have visions of rum and cola, just remember that the country isn’t really dependent on tourists. In fact it is the oil and gas industry that has been the most important in Trinidad & Tobago for some time. It had been in long-term decline from the 1980s due to falling yields and low world prices.
More recently, however, new discoveries, increased foreign investment and a steady increase in world prices have reversed the trend. Trinidad signed a landmark agreement with nearby Venezuela, one of the world’s largest producers, to collaborate in all aspects of the oil and gas industries. Apart from oil and gas, Trinidad has the world’s largest deposits of asphalt.
T&T formerly had the most heavily regulated economy in the region but the state-controlled edifice was dismantled during the 1990s as part of an IMF-approved package of privatisation, fiscal and trade liberalisation. Trinidad & Tobago is a member of the Caribbean trading bloc,
CARICOM.
Overall, T&T has earned a reputation as an excellent investment site for international businesses. Successful reforms implemented have set economic growth on a roll, and foreign investment and trade flourished. The country enjoys a healthy trade surplus.
With its strategic position at the crossroads of the Caribbean and North and South America, Trinidad and Tobago offers an ideal base to penetrate markets throughout the hemisphere. For international investors, Trinidad and Tobago offers a wealth of natural resources, a well-developed human resource base, and the benefits of trade agreements with countries throughout the region.
Trinidad and Tobago has made a transition from an oil-based economy to one based on natural gas. Natural gas production averages over 3 trillion cubic feet per day (tcf/d). The petrochemical sector, including plants producing methanol, ammonia, urea, and natural gas liquids, has continued to grow in line with natural gas production, which continues to expand and should meet the needs of new industrial plants coming on stream in the next few years.
The Government has continued the sound macroeconomic policies of the previous regimes. Long-term growth looks promising, as Trinidad and Tobago further develops its oil and gas resources and the industries dependent on natural gas, including petrochemicals, fertilizers, iron and steel and aluminum.
Additional growth potential also exists in financial services, telecommunications and transport. Strong growth in Trinidad and Tobago over the past few years has led to trade surpluses, even with high import levels because of industrial expansion and increased consumer demand.
There are no currency or capital controls and the central bank maintains the TT dollar in a lightly managed, stable float against the US dollar.
Manufacturing has grown by leaps and bounds and the construction sector has seen growth due mainly to the Trinidad and Tobago Government investment in housing and infrastructure, and ongoing projects in the energy sector. There has also been a restructuring of the sugar industry.
Recognising the role that energy plays in the economic life of Trinidad and Tobago, where it was the source of at least a third of Governmental revenues, the Government is seeking to diversify the economy to reduce dependence on the energy sector and to achieve self-sustaining growth. The diversification strategy focuses on six main sectors: traditional manufacturing; a new technology-based industrial sector; tourism; financial services; agriculture; and small business.
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