Wednesday, November 30, 2022

High oil, gas prices distracted T&T for years from transformative growth – UWI Lecturer

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What will it take for Trinidad and Tobago to fix its economy? It is the question Economist and Senior Lecturer at the University of the West Indies, Dr. Roger Hosein continuously ponders when reflecting on the state of affairs in his home country.

During his participation in an online discussion by the Institute of Commonwealth Studies, Dr. Hosein explained, in great detail, that Trinidad has been distracted for years by high oil and gas prices, all the while failing to restructure its economy and implement key mechanisms that would give birth to sustainable growth.

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The cost of this distraction, he said, is that the economy has experienced years of poor performance. With gas prices as high as they are due to the Russia-Ukraine war, Dr. Hosein said it’s déjà vu all over again for him.

According to Dr. Hosein, Trinidad is being lured into the trap of going after the high gas prices while failing to take steps that would lead to transformative change. He said there is even a lack of aggression in moving towards renewable energy, a stark contrast to what obtains in Guyana.

The economist said, “What we have is the low electricity cost in Trinidad and Tobago which makes it easy to use electricity and therefore the drive and the incentive to go into renewable energy, although there have been many announcements, it’s not there in the aggressive way we would want so as to create transformative economic change.”

With the invasion of Ukraine by Russia, Dr. Hosein said Trinidadians are seeing rapid increase in energy revenues which in turn slows transformative interventions in non-oil industries. “So, you already have comments being made to the extent that the economy is improving, revenues are improving and things of that nature and once those types of comments start to circulate, it reduces the drive of the policymakers to make deep-rooted changes, and our economy, in reality, has been doing terrible,” expressed the economist.

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Dr. Hosein was keen to note that the Caribbean Community (CARICOM) legacy producer was ranked as the ninth worst-performing economy in the world in the time period 2016-2021.

In the time period 2009 to 2021, the statistics are similar. He said, “We are one of the top 15 worst-performing economies in the world and in the time period 2025, 2026, and 2027 using [International Monetary Fund] IMF forecasted data, we remain in that category. So, on one hand, you have this poor economic good performance but on the other hand, once you have elevated price of oil and gas, there is a reduction in the drive for transformative change.”

In light of what is taking place in his homeland, he said it is critical that Guyana and Suriname, relative newcomers to the offshore oil and gas arena, take “a deep dive look into the various dimensional effects of this oil boom/energy boom.”

The UWI Senior Lecturer said it is imperative that CARICOM nations not only set and comply with targets for oil-related production, but also for renewable energy production. Avoidance of oil dependence and its inherent perils must remain a priority, the economist appealed.

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