Economic Paper Trinidad and Tobago
Economic Paper Trinidad and Tobago
Jurgen Budike
Introduction
Trinidad and Tobago is one of the wealthiest and most developed nations in the Caribbean and is listed in the top 66 High Income countries in the world. Economic reforms adopted in the early 1990s had resulted in an average economic growth of 7.7 percent per annum, until the start of the world financial crisis in 2008, when the country began to experience a period economic downturn. This endured until 2012 when the economy slowly started to improve with an expected growth rate of 3.5% in 2013. It’s worth mentioning that the economic growth in general has been very unbalanced due to its high dependence on oil and gas. This sector accounts for around 40% of its GDP and 80% of exports, but only 5 percent of employment. The high dependence on oil and gas provokes certain internal and external economic challenges that need to be dealt with properly and sustainably. For this purpose the following seven sections of this paper are dedicated to give a macro-economic overview of the country’s economy. The first section discusses the role of established institutions in maintaining and balancing out the country’s economic growth. Section two discusses the main fiscal policy challenges in the light of the post-world financial crisis and how they are being resolved. The third section discusses the Central Bank’s monetary policy and its main challenges. Section four discusses the role played by the exchange rate regime, the country’s trade and International Finance. Section five discusses the country’s status on technology and innovation, intellectual property rights and industrial development. Section six discusses the environmental policy in the light of sustainable development. The last section gives an overview of wage and employment generation policies.
I. Institutions
It is commonly accepted that the wealth of a country is greatly determined by good institutions. But opinions widely differ on
Jurgen Budike
Introduction
Trinidad and Tobago is one of the wealthiest and most developed nations in the Caribbean and is listed in the top 66 High Income countries in the world. Economic reforms adopted in the early 1990s had resulted in an average economic growth of 7.7 percent per annum, until the start of the world financial crisis in 2008, when the country began to experience a period economic downturn. This endured until 2012 when the economy slowly started to improve with an expected growth rate of 3.5% in 2013. It’s worth mentioning that the economic growth in general has been very unbalanced due to its high dependence on oil and gas. This sector accounts for around 40% of its GDP and 80% of exports, but only 5 percent of employment. The high dependence on oil and gas provokes certain internal and external economic challenges that need to be dealt with properly and sustainably. For this purpose the following seven sections of this paper are dedicated to give a macro-economic overview of the country’s economy. The first section discusses the role of established institutions in maintaining and balancing out the country’s economic growth. Section two discusses the main fiscal policy challenges in the light of the post-world financial crisis and how they are being resolved. The third section discusses the Central Bank’s monetary policy and its main challenges. Section four discusses the role played by the exchange rate regime, the country’s trade and International Finance. Section five discusses the country’s status on technology and innovation, intellectual property rights and industrial development. Section six discusses the environmental policy in the light of sustainable development. The last section gives an overview of wage and employment generation policies.
I. Institutions
It is commonly accepted that the wealth of a country is greatly determined by good institutions. But opinions widely differ on