Tobago’s economy faces a challenge because it requires sustained growth of between seven and ten per cent annually for the next 40 years to stabilise, according to economist Dr Vanus James.
This stark assessment comes despite Chief Secretary Farley Augustine’s assurance that the Tobago House of Assembly’s (THA) budget presentation today will reflect a stabilised economy in some areas.
Augustine, who will be delivering his final budget presentation before giving up the Finance, Trade and the Economy portfolio, told reporters last week that today’s budget will demonstrate how the island’s economy has finally stabilised.
He said, “When I look over the data I think that we have efficiently stabilised elements of the Tobago economy. Over the last couple budget cycles, the focus was heavily on social intervention strategies coming out of COVID.”
He referenced the THA’s moves to increase salaries along with investments in the education, agriculture and health sectors to stimulate the economy post-COVID-19.
But, in what he described as a sobering picture of Tobago’s economic challenges—based on CSO and International Labour Organisation (ILO) data—Dr James said the island’s economic decline started in 2022, following the removal of the People’s National Movement from office.
He said there was an overall contraction of two per cent, with sectors like construction and agriculture plummeting by 35 and 30 per cent respectively.
“What has happened in Tobago in 2023, from the data provided by the CSO, is that we lost 700 of those kinds of high-quality jobs. People became discouraged from the fallout out of 2022 and left for better opportunity elsewhere,” James said.
“What that tells me is that the platform on which to rebuild an economy that has undergone the kind of collapse that took place in 2022, the tools and the skills needed to rebuild, they have been themselves now in 2023 deteriorating, and so the chance that the Tobago economy would have recovered significantly in 2023, there’s almost none.”
James criticised the THA for a lack of substantial investment projects, pointing out that key developments like the $70 million Friendship Connector Road project were not enough to keep the economy afloat.
“The private sector in Tobago lost its hold on 36 per cent of jobs in 2022 and that declined to 29 per cent in 2023. So the private sector would have to recover.”
He said Government spending constraints have further hindered economic recovery, with recurrent spending dominating the budget.
James argued that without significant new development spending, economic growth will remain sluggish.
“In 2023, there was no major injection of additional development spending beyond the previous year’s $300 million,” he said.
Meanwhile, Progressive Democratic Patriots leader Watson Duke said he isn’t excited about today and neither should Tobagonians.
“It would be the wish list of a child where the decisive governing policies and corrective action would be missing.”
Also addressing the budget, Minority leader Kelvon Morris said Augustine’s recent claim of a stabilised Tobago economy is difficult to accept, considering “the realities faced by the residents and businesses on the island … His assertions remain unsubstantiated and misleading.”
Morris said under Augustine’s tenure, Tobago has experienced a consistent decline in economic performance, a surge in joblessness and widespread reports of corruption.
“These issues undermine any assertions of stabilisation and raise serious questions about the effectiveness of his administration’s policies,” Morris said.
“Firstly, the persistent economic decline is evident in key sectors that drive Tobago’s economy, such as tourism and agriculture. Despite promises of revitalisation, these industries continue to struggle, with businesses closing and investment dwindling.
He added, “The local job market reflects this downturn, as unemployment rates remain high, and opportunities for young Tobagonians are scarce. Stabilisation should mean tangible improvements in these areas, yet, the current administration has failed to deliver such outcomes.”
Morris said true stabilisation and economic stability need solid action and visible progress.