The curse of the extractive economies:
In many ways, the two recessions are similar, with the oil curse leaving its mark on both. The non-hydrocarbon sector is incapable of carrying Trinidad and Tobago’s economy on its own. There are the same stories today as there were in the 1980s of declining incomes, lost jobs and the hopelessness that uncertainty brings. But the country did learn from the 1980s. The government now has a Heritage and Stabilization Fund that helps steady state expenditures by setting aside surpluses in the good years for distribution in the down ones. Although the fund’s resources are severely limited, its spending so far in the recession is one reason the current contraction has not been nearly as severe as it was in the 1980s.
That said, Trinidad and Tobago faces an environment today that is much less conducive to a solid recovery. Since 2000, there has been a marked increase in crime and violence, corruption and ethnic tensions in a country home to East Indians, Africans and many mixed identities. Those tensions have fed violent extremism, including from marginalized Muslims that make up only 8 percent of Trinidad and Tobago’s population of 1.3 million people. Many fear that this economic and social deterioration cannot be easily reversed, or even halted, if oil markets recover.
Read Robert Looney’s full article here.