Trinidad’s economy in dire straits – Dr Roger Hosein

(Trinidad Guardian) While the International Monetary Fund (IMF) forecast economic growth of 2.1 per cent for T&T this year, economist Dr Roger Hosein warned yesterday that the economy was in dire straits. He said that while he has great respect for the IMF projection, he believes the agency is overly optimistic about T&T’s economic outlook.

In its latest Global Economic Forecast, the IMF said that T&T’s Gross Domestic Product (GDP) would grow 2.1 percent this year and 4.1 percent in 2022.

But according to Hosein, the last time the economy grew was in 2018 and that was just 0.1 percent.

He said the IMF’s projections were based on the numbers received from the natural gas and oil sectors but over the last four months of 2020 and the first three months of 2021 natural gas production has been in decline.

“I could be wrong but based on the evidence of the last seven months, my understanding of econometrics is that this 2.1 per cent could be wrong,” he said in his address at a business dinner hosted by a Full International Fellowship Gospel Business in Aberystwyth at Passage Asia Restaurant in Chaguanas.

Hosein said T&T’s GDP projection is still lower than the rest of the Caribbean and there is not much to celebrate.

“Between 2007 and 2021 we produced 4.379 billion barrels of oil and gas, so you would expect to see something significant. With the production of this oil and gas, we are seeing economic activity going backwards. This worries me deeply. So we have an economy that is about 17 per cent lower than in 2014 and that’s about 30 per cent to 40 per cent lower than in 2007, ”he said.

He added: “Before COVID-19 I was very worried about the economy of Trinidad and Tobago and then COVID-19 got even worse. Then I looked at the World Economic Outlook and that has concerned me. ”

Warning that the country is almost broke, Hosein noted: “We have some money in the Heritage and Stabilization Fund (HSF). If you look at the numbers most of the money was spent on transfers and subsidies. “

Hosein noted that the T&T workforce has been declining over the past few years but qualified by saying that he is not entirely sure of the reasons.

He called on policymakers to immediately form a task force to determine why the workforce is shrinking and what can be done to reverse it. To solve the problem, he proposes that the Government uses migrant labor in important sectors.

“There is a potential role for the Venezuelans here. My view is that the re-registration process must register all Venezuelans here. We want to make sure, we know who these Venezuelans are and their skills, ”he said, adding that migrants should not be working in the informal sector like bars, but in areas of the economy which has the potential to export.

“When you pass the bars in Gasparillo you will see Venezuelan women standing outside and looking for customers to come in. That’s my big concern. This is exactly where we do not want undocumented workers to go. So if you’re selling more Johnnie Walker alcohol, you need to have a foreign exchange. Then these same Venezuelans go to PriceSmart and they buy and send things home and they use foreign exchange, ”he said.

Hosein said the country’s Government must do its best to improve the ease of doing business as investments are needed to diversify the economy.