Last week, be­fore the Min­is­ter of Fi­nance pre­sent­ed the FY2027 Bud­get, I in­tro­duced five ques­tions at the end of the col­umn to pro­vide a frame­work for eval­u­at­ing the Bud­get pre­sen­ta­tion. These were as fol­lows:

* Does the Bud­get es­tab­lish a cred­i­ble path to­wards stronger sus­tain­able eco­nom­ic growth?

* Does it cre­ate the con­di­tions for high­er pro­duc­tive em­ploy­ment?

* Does it im­prove the en­vi­ron­ment for pri­vate in­vest­ment?

* Does it in­crease ex­ports and sus­tain­able for­eign ex­change earn­ings?

* Does it move the fis­cal po­si­tion to­wards greater sus­tain­abil­i­ty?

The bud­get is now be­fore us, so let’s use those ques­tions to com­ment. What fol­lows is a di­rec­tion­al as­sess­ment on­ly as this year in a short­er pre­sen­ta­tion, the Min­is­ter seems to have left some of the de­tails to con­tri­bu­tions from oth­ers in the de­bate.

We start with the is­sue of sus­tain­able growth. The Min­is­ter did men­tion a process to­wards medi­um term plan­ning but the de­tails are not yet known. While much of our growth po­ten­tial re­lies on an en­er­gy sec­tor uptick there is one as­pect that is worth not­ing.

For al­most a decade many com­men­ta­tors lament­ed the slow pace of move­ment in the En­er­gy sec­tor. In fact, the En­er­gy Cham­ber in its var­i­ous newslet­ters re­peat­ed­ly com­plained that de­ci­sions and im­ple­men­ta­tion were tak­ing too long. In 2016, it re­port­ed frus­tra­tion among com­pa­ny ex­ec­u­tives at the slow pace of de­ci­sion mak­ing. In 2023 it de­scribed ap­proval process­es that were not de­signed for speed, with 33 ma­jor ap­provals spread across eight Min­istries and agen­cies, many be­ing pur­sued se­quen­tial­ly. By De­cem­ber 2025, the Cham­ber said that, on av­er­age, it took 12 years from the de­ci­sion to hold a bid round to first gas.

En­ter the En­er­gy Ac­cel­er­a­tor Hub in­tro­duced un­der the cur­rent ad­mini­tra­tion. The Bud­get says the Hub now brings those 33 ap­provals across eight Min­istries and agen­cies un­der one um­brel­la, with the ob­jec­tive of re­duc­ing the de­lays be­tween project con­cept and pro­duc­tion. This is sig­nif­i­cant be­cause faster ap­provals change project eco­nom­ics. The En­er­gy Cham­ber has es­ti­mat­ed that short­en­ing a typ­i­cal shal­low wa­ter gas de­vel­op­ment by one year can add ap­prox­i­mate­ly US$120 mil­lion in project val­ue.

Is it work­ing? In an Oc­to­ber 6, Fi­nan­cial Times in­ter­view, Exxon­Mo­bil’s head of glob­al ex­plo­ration, John Ardill, said the com­pa­ny ne­go­ti­at­ed its pro­duc­tion shar­ing agree­ment in Trinidad and To­ba­go in sev­en months, about half the time it nor­mal­ly takes “on a good day”. Exxon al­so se­cured the ves­sel re­quired for seis­mic ac­qui­si­tion in six months in­stead of the more typ­i­cal year. “That’s a record time,” Ardill said.

Exxon ex­pects to de­cide where to drill its first well by mid 2027 and, if suc­cess­ful, says it can ap­ply the de­vel­op­ment mod­el it used in Guyana. That rep­re­sents an enor­mous op­por­tu­ni­ty for Trinidad and To­ba­go. The sig­nif­i­cance goes be­yond Exxon. T&T has spent years dis­cussing how to re­store en­er­gy pro­duc­tion. A faster ap­provals process changes the time be­tween op­por­tu­ni­ty and pro­duc­tion, and there­fore the time be­tween op­por­tu­ni­ty and rev­enue, for­eign ex­change and em­ploy­ment.

Trans­fer pric­ing al­so be­longs in the same dis­cus­sion. In the Oc­to­ber 2015 Bud­get, Gov­ern­ment said it was ad­vanc­ing work on trans­fer pric­ing leg­is­la­tion. By 2016 it re­port­ed that trans­fer pric­ing was al­so be­ing con­sid­ered in re­la­tion to arm’s length pric­ing in the LNG val­ue chain. Tech­ni­cal work con­tin­ued. Coun­try-by-coun­try re­port­ing leg­is­la­tion was even­tu­al­ly passed in 2024. Yet in the fi­nal bud­get of the last ad­mini­tra­tion in Sep­tem­ber 2024, com­pre­hen­sive trans­fer pric­ing leg­is­la­tion was still some­thing that would be brought to Par­lia­ment “short­ly”. Al­most nine years had passed.

The 2027 Bud­get says a draft na­tion­al trans­fer pric­ing pol­i­cy has now been com­plet­ed, the OECD has been en­gaged to re­view and strength­en it, and pri­or­i­ty will be giv­en dur­ing this fis­cal year to fi­nal­is­ing the pol­i­cy, prepar­ing the pri­ma­ry leg­is­la­tion and mov­ing to­wards ex­e­cu­tion.

This is im­por­tant to growth be­cause in­creas­ing pro­duc­tion is on­ly one part of the en­er­gy equa­tion. T&T al­so has to cap­ture an ap­pro­pri­ate share of the val­ue cre­at­ed. A func­tion­ing trans­fer pric­ing regime re­duces op­por­tu­ni­ties for prof­its and tax­able in­come to leak through re­lat­ed par­ty trans­ac­tions and strength­ens the State’s abil­i­ty to ap­ply arm’s length pric­ing. In the en­er­gy sec­tor, where trans­ac­tions fre­quent­ly oc­cur across multi­na­tion­al cor­po­rate struc­tures, that has di­rect im­pli­ca­tions for rev­enue and for how much eco­nom­ic val­ue is re­tained lo­cal­ly.

Jobs and In­vest­ment

Now we get to the sec­ond ques­tion which was about pro­duc­tive em­ploy­ment.

The re­sponse in the bud­get is pri­mar­i­ly in­vest­ment led. The steel and vana­di­um project at Point Lisas is ex­pect­ed to cre­ate 1,000 per­ma­nent skilled jobs. Gov­ern­ment says there are 45 projects val­ued at ap­prox­i­mate­ly US$2.17 bil­lion in the in­vest­ment pipeline, with the po­ten­tial to gen­er­ate more than 7,100 jobs. The skills agen­da is al­so be­ing aligned to ar­eas such as man­u­fac­tur­ing, heavy equip­ment, cod­ing, ar­ti­fi­cial in­tel­li­gence and tech­ni­cal and vo­ca­tion­al ed­u­ca­tion.

That is the right di­rec­tion but the re­al test is whether an­nounced projects move to start up and whether em­ploy­ment growth be­gins to show up in the labour mar­ket da­ta. We have had sim­i­lar promis­es of projects in the past. De­liv­ery is the key is­sue.

The third ques­tion was around pri­vate in­vest­ment.

Here the bud­get tack­les the broad­er ease of do­ing busi­ness prob­lem through process re­form as well as in­cen­tives. The En­er­gy Ac­cel­er­a­tor Hub ad­dress­es ap­provals in the en­er­gy sec­tor. TTBi­zLink is to be ex­pand­ed. Cus­toms is be­ing mod­ernised to con­nect Cus­toms with ship­ping agents, port op­er­a­tors and trad­ing part­ners. Gov­ern­ment al­so pro­pos­es changes to the For­eign In­vest­ment Act to sim­pli­fy the ac­qui­si­tion of land and shares and re­duce ad­min­is­tra­tive de­lays.

These ini­tia­tives all deal with time, fric­tion and un­cer­tain­ty, which are costs to busi­ness even when they do not ap­pear on a tax sched­ule. Ease of do­ing busi­ness is ul­ti­mate­ly ex­pe­ri­enced as elapsed time: how long it takes to reg­is­ter, ob­tain ap­provals, clear goods, ac­cess in­for­ma­tion, ac­quire prop­er­ty and move cap­i­tal from an in­vest­ment de­ci­sion in­to an op­er­at­ing busi­ness. Be­yond the pro­cess­ing is the po­ten­tial knock on ef­fect of more eco­nom­ic ac­tiv­i­ty.

The cap­i­tal mar­ket pro­pos­als will be dis­cussed in more de­tail sub­se­quent­ly. Gov­ern­ment pro­pos­es a Sav­ings Bond Pro­gramme and a re­tail Gov­ern­ment se­cu­ri­ties pro­gramme that would al­low in­di­vid­u­als to par­tic­i­pate in Gov­ern­ment se­cu­ri­ties at much small­er de­nom­i­na­tions. It al­so plans to de­ma­te­ri­alise Gov­ern­ment se­cu­ri­ties through the Trinidad and To­ba­go Cen­tral De­pos­i­to­ry, list them on the Stock Ex­change and con­duct a di­ag­nos­tic of the lo­cal cur­ren­cy Gov­ern­ment bond mar­ket to im­prove the yield curve and mar­ket func­tion­ing.

A deep­er cap­i­tal mar­ket mat­ters to in­vest­ment be­cause busi­ness­es re­quire func­tion­ing pools of do­mes­tic sav­ings, trans­par­ent pric­ing of cap­i­tal and liq­uid in­vest­ment in­stru­ments. These pro­pos­als im­prove the fi­nan­cial ar­chi­tec­ture with­in which in­vest­ment takes place and broad­en the re­la­tion­ship be­tween house­hold sav­ings and the do­mes­tic cap­i­tal mar­ket, start­ing with ac­cess to Gov­ern­ment bonds.

For­eign ex­change

The fourth ques­tion con­cerned ex­ports and for­eign ex­change.

The bud­get shows an un­der­stand­ing of the cen­tral prob­lem. More than 70 per cent of the coun­try’s for­eign ex­change earn­ings still come from en­er­gy com­modi­ties. The im­me­di­ate re­sponse is there­fore to re­store en­er­gy pro­duc­tion more quick­ly and ex­tract more val­ue from what is pro­duced. The wider re­sponse is to de­vel­op ad­di­tion­al for­eign ex­change earn­ers through steel, man­u­fac­tur­ing, tourism, agri­cul­ture and oth­er in­vest­ments. We have, how­ev­er, been here be­fore.

Ex­im­Bank fo­cus is on firms that earn for­eign ex­change through ex­ports or re­duce im­ports. It is good that we have moved be­yond the ini­tial rethor­ic of treat­ing al­lo­ca­tion alone as the so­lu­tion. Of coursse the long-term so­lu­tion is ad­di­tion­al sup­ply and that is the piece of the puz­zle that re­mains out­stand­ing.

The fifth ques­tion was fis­cal sus­tain­abil­i­ty.

The re­vised FY2026 deficit is ap­prox­i­mate­ly $7 bil­lion. For FY2027 Gov­ern­ment projects rev­enue of $59.729 bil­lion, ex­pen­di­ture of $63.368 bil­lion and a deficit of $3.639 bil­lion, equiv­a­lent to 2.1 per cent of GDP. 

If achieved, that is a mean­ing­ful im­prove­ment in a sin­gle fis­cal year but it re­mains a “big if” be­cause it is heav­i­ly con­tin­gent on en­er­gy prices. Bet­ter tax ad­min­is­tra­tion is again the promise along with sev­er­al new rev­enue mea­sures. Yet at the end of the day it comes down to re­al­iz­ing oil at US$77 per bar­rel and nat­ur­al gas at US$5 per MMB­tu. This has al­ways been our re­al­i­ty.

There is a com­mon thread run­ning through all five ques­tions.

For years Trinidad and To­ba­go has had projects, plans, stud­ies and op­por­tu­ni­ties. The weak­ness has of­ten been the time tak­en to turn them in­to de­ci­sions and the time tak­en to turn de­ci­sions in­to ex­e­cu­tion. The 2027 Bud­get ap­pears to recog­nise that prob­lem.

Its suc­cess will be de­ter­mined by whether the new pace be­ing ex­pe­ri­enced in parts of the en­er­gy sec­tor be­comes the nor­mal pace of Gov­ern­ment; whether trans­fer pric­ing fi­nal­ly moves from pol­i­cy work in­to leg­is­la­tion and en­force­ment; whether ease of do­ing busi­ness re­forms re­duce ac­tu­al fric­tion; whether in­vest­ment be­comes pro­duc­tion; whether pro­duc­tion be­comes jobs and ex­ports; and whether those flows ul­ti­mate­ly im­prove the fis­cal ac­counts.

The frame­work has been pre­sent­ed, but ex­e­cu­tion is now the name of the game.

Ian Nar­ine is a fi­nan­cial con­sul­tant who wrote this col­umn against time, fric­tion and un­cer­tain­ty. Please send your com­ments to ian@ian­nar­ine.com