The T&T econ­o­my is fac­ing sig­nif­i­cant down­side risk fu­elled by a like­ly slow­down in glob­al growth, con­tin­ued low en­er­gy pro­duc­tion, an in­abil­i­ty to ful­ly re­open the econ­o­my and the con­tin­u­ing pan­dem­ic.

This year the Min­is­ter of Fi­nance has to show re­al skill and the gov­ern­ment must get its act to­geth­er. It is not easy and if we are to judge by the last sev­en years it is un­like­ly Min­is­ter Colm Im­bert and his team are up to it.

It was on Tues­day the World Bank warned that fol­low­ing a strong re­bound in 2021, the glob­al econ­o­my is en­ter­ing a pro­nounced slow­down amid fresh threats from COVID-19 vari­ants and a rise in in­fla­tion, debt, and in­come in­equal­i­ty that could en­dan­ger the re­cov­ery in emerg­ing and de­vel­op­ing economies.

It pre­dict­ed that glob­al growth could de­cel­er­ate marked­ly from 5.5 per cent in 2021 to 4.1 per cent in 2022 and 3.2 per cent in 2023 as pent-up de­mand dis­si­pates and as fis­cal and mon­e­tary sup­port is un­wound across the world.

Ac­cord­ing to the World Bank, the rapid spread of the Omi­cron vari­ant in­di­cates that the pan­dem­ic will like­ly con­tin­ue to dis­rupt eco­nom­ic ac­tiv­i­ty in the near term. In ad­di­tion, a no­table de­cel­er­a­tion in ma­jor economies—in­clud­ing the Unit­ed States and Chi­na—will weigh on ex­ter­nal de­mand in emerg­ing and de­vel­op­ing economies.

At a time when gov­ern­ments in many de­vel­op­ing economies lack the pol­i­cy space to sup­port ac­tiv­i­ty if need­ed, new COVID-19 out­breaks, per­sis­tent sup­ply-chain bot­tle­necks and in­fla­tion­ary pres­sures, and el­e­vat­ed fi­nan­cial vul­ner­a­bil­i­ties in large swaths of the world could in­crease the risk of a hard land­ing.

“The world econ­o­my is si­mul­ta­ne­ous­ly fac­ing COVID-19, in­fla­tion, and pol­i­cy un­cer­tain­ty, with gov­ern­ment spend­ing and mon­e­tary poli­cies in un­chart­ed ter­ri­to­ry. Ris­ing in­equal­i­ty and se­cu­ri­ty chal­lenges are par­tic­u­lar­ly harm­ful for de­vel­op­ing coun­tries,” said World Bank Group Pres­i­dent David Mal­pass.

“Putting more coun­tries on a favourable growth path re­quires con­cert­ed in­ter­na­tion­al ac­tion and a com­pre­hen­sive set of na­tion­al pol­i­cy re­spons­es.”

This is wor­ry­ing news for the T&T econ­o­my which has suf­fered from sev­en years of con­sec­u­tive neg­a­tive growth and has seen re­al GDP fall by a quar­ter.

There is an ex­pec­ta­tion that T&T’s econ­o­my could grow by as much as 5 per cent this year on the strength of ris­ing en­er­gy prices and pro­duc­tion and as the gov­ern­ment eas­es lock­down mea­sures.

So far the Gov­ern­ment has kept to its promise not to close the econ­o­my, even as we face record deaths and in­fec­tions. It is a de­ci­sion I sup­port be­cause I do not feel the coun­try should be held to ran­som by those who choose not to be vac­ci­nat­ed.

It is why I al­so sup­port the Gov­ern­ment’s at­tempt to im­pose safe zones in the pub­lic sec­tor to both en­cour­age peo­ple to be­come vac­ci­nat­ed and al­so to re­duce the risks of con­stant waves of in­fec­tions in the pub­lic sec­tor.

To be clear, I am not say­ing that there are not peo­ple who for med­ical and even re­li­gious rea­sons may not be in a po­si­tion to be vac­ci­nat­ed and there­fore get a waiv­er, but for the vast ma­jor­i­ty of those who re­main un­vac­ci­nat­ed, it is a choice they have made—one that they have the right to do and one which their em­ploy­ers in both the pub­lic and pri­vate sec­tors must al­so have a right to say in those cir­cum­stances you can­not func­tion on the job. If there is a pos­si­bil­i­ty for them to work from home, that can al­so be ex­plored but if you must be in the of­fice, hold­ing oth­ers to ran­som is un­ac­cept­able.

T&T re­quires the world’s econ­o­my to con­tin­ue to grow. That will help com­mod­i­ty prices and will help us as this coun­try has to earn for­eign ex­change if it is go­ing to have any chance of sur­vival.

As of yes­ter­day, crude prices con­tin­ued to av­er­age over US$80 a bar­rel and nat­ur­al gas prices at the US Hen­ry Hub was well over US$4 per MMb­tu. These are wind­fall prices.

Am­mo­nia prices are over US$,1000 a met­ric tonne and methanol and urea prices re­main strong. If this con­tin­ues for the rest of the fis­cal year not on­ly would the Gov­ern­ment be col­lect­ing high­er rents from the en­er­gy sec­tor but it will al­so get high­er div­i­dends from both Her­itage and the Na­tion­al Gas Com­pa­ny.

In fact, the re­cent crow­ing on the part of the Min­is­ter of En­er­gy that the NGC had done well and that it had made over $1 bil­lion was an­oth­er at­tempt to pull the prover­bial wool over the coun­try’s eyes and to play down its wastage of over a quar­ter bil­lion dol­lars on a hare-brained scheme to bet against the very petro­chem­i­cal sec­tor that is now al­low­ing the gov­ern­ment, coun­try and the very NGC to ben­e­fit from high­er prices.

What the Gov­ern­ment needs to do is to be laser fo­cused on in­creas­ing the nat­ur­al gas pro­duc­tion so that all sec­tors, in­clud­ing LNG, could get their Dai­ly Con­tract­ed Quan­ti­ties (DCQ) and ben­e­fit from what is a wind­fall and what by its very na­ture can­not be ex­pect­ed to last for long.

As a small open econ­o­my, T&T re­lies on for­eign ex­change to buy from our food to cars, parts and ma­chin­ery.

In fact one of the ma­jor struc­tur­al chal­lenges of this econ­o­my is that too few busi­ness­es are earn­ers of hard cur­ren­cy and make a lot of TT dol­lars by be­ing es­sen­tial­ly traders.

Of course all busi­ness­es can­not be ex­porters but the over-re­liance on the en­er­gy sec­tor and to some ex­tent, the man­u­fac­tur­ing sec­tor for our sus­te­nance is nev­er a for­mu­la that can lead to suc­cess.

It is why the re­ports that KLM has ex­tend­ed its flights be­tween Am­s­ter­dam and Port-of-Spain is en­cour­ag­ing as it is to see British Air­ways re­turn to To­ba­go.

There is al­so word that Vir­gin At­lantic and oth­er air­lines are plan­ning to re­turn to ei­ther To­ba­go or Port-of-Spain.

These all point to an im­por­tant part of our econ­o­my that is of­ten over­looked, but which the pan­dem­ic has shown us to be very im­por­tant.

That is the tourism sec­tor. For ease of ref­er­ence I am in­clud­ing in this sec­tor every­thing from ho­tels, to restau­rants, to en­ter­tain­ment and recre­ation and even bars.

This “tourism sec­tor” em­ploys thou­sands and has been dec­i­mat­ed by the im­pact of the pan­dem­ic. Thou­sands have lost their jobs, many have left the in­dus­try al­to­geth­er, busi­ness­es closed and peo­ple fur­loughed.

This is one sec­tor that not on­ly has the ca­pa­bil­i­ty of em­ploy­ing thou­sands but of earn­ing for­eign ex­change.

As a coun­try we have to be in­no­v­a­tive and find ways to grow this sec­tor and this is why it is dis­ap­point­ing that to date the Gov­ern­ment can pro­vide no guid­ance on safe zone Car­ni­val events so that pro­mot­ers and oth­ers who earn a liv­ing from the Car­ni­val can at least get some­thing from it.

The non-en­er­gy sec­tor part of the econ­o­my was hit hard last year from Car­ni­val’s can­cel­la­tion and looks like­ly to suf­fer a sim­i­lar faith this year.

We have to be smart in the way we do things and we must al­so be able to weigh risk and make de­ci­sions based on these cal­cu­la­tions.

Ac­cord­ing to the World Bank ris­ing in­fla­tion—which hits low-in­come work­ers par­tic­u­lar­ly hard—is con­strain­ing mon­e­tary pol­i­cy.

Glob­al­ly and in ad­vanced economies, in­fla­tion is run­ning at the high­est rates since 2008. In emerg­ing mar­ket and de­vel­op­ing economies, it has reached its high­est rate since 2011.

Many emerg­ing and de­vel­op­ing economies are with­draw­ing pol­i­cy sup­port to con­tain in­fla­tion­ary pres­sures—well be­fore the re­cov­ery is com­plete.

Al­ready T&T is fac­ing the in­fla­tion­ary pres­sure and this threat­ens not just in­dus­tri­al peace but the abil­i­ty of the most vul­ner­a­ble to sur­vive in the econ­o­my.

This year the Fi­nance Min­is­ter and gov­ern­ment must per­form and make smart moves be­cause if they don’t it could be an­oth­er year of a fail­ing econ­o­my.